Are you set to file your income tax return for the financial year (‘FY’) 2012-13?

The objective of this article is to attract attention of those individuals / HUF / partnership firms who are required to file their return on or before July 31, 2013. The following points are noteworthy in this case:

1. Is it mandatory for every person to file his return?

Every individual / HUF whose gross total income (‘GTI’) (i.e. income before availing any deductions like LIC, PPF, etc) exceeds minimum tax exemption limit of Rs. 200,000 is required to file return. For example – your GTI for the FY 2012-13 is Rs. 250,000 and you have availed of the PPF deduction of Rs. 70,000 thereby resulting in net total income of Rs. 180,000. Although you are not liable to pay any income tax on Rs. 180,000, you are still required to file your return since your GTI exceeds Rs. 200,000.

Note: There is no minimum tax exemption limit for partnership firms and therefore, it is mandatory to file its return even if its total income is Rs 1. In case of loss from any source of income, it is mandatory to file the return in order to carry forward the said loss to the subsequent year and set it off against the subsequent year’s profit.

2. Which documents substantiate the basis of your return?

The following documents are a must for preparing the return:

Bank statement
TDS certificates
Tax Savings certificates – LIC receipts, PPF passbook, Mediclaim receipts, etc.
Income statement enumerating income earned during the FY from all sources

3. What is the pre-requisite for filing your return?

No person can file return without a Permanent Account Number (‘PAN’). PAN is 10 digit alpha-numeric number issued by NSDL authorities in confirmation with Income Tax Department and is considered to be one’s identity proof in India. In case of PAN - AAAPS8216Q, fourth alphabet (P) denotes the status of the person. P stands for Personal, H for HUF, F for Partnership Firm and C for Company. The fifth alphabet (S) denotes the surname of the individual, or surname of the Karta of the HUF, or the first alphabet of the firm or Company name, as the case may be.

4. Is it mandatory to file your return electronically (‘e-filing’)?

An individual has the option to file his / her return manually or electronically. However, an individual whose GTI exceeds Rs. 500,000 is mandatorily required to file his / her return electronically. The same principle as explained in point no 1 with regards to GTI applies in this case also. An individual can download the Excel utility of the applicable Income-tax return form (‘ITR Excel utility’) from the website – www.incometaxindiaefiling.gov.in and file the return electronically. For example, if your GTI is Rs. 450,000, you can either file your return manually or electronically. However, if your GTI is Rs. 500,000 or more you would have to file your return electronically.

5. Which ITR Excel utility should you download?

The tax department has notified different forms for different persons as under:

ITR 1 – Individuals having only salary income and interest income (salaried employees)
ITR 2 – Individuals & HUFs having income from any source other than Income from Business
ITR 3 – Individuals & HUFs being partners in firms and not carrying any business or profession
ITR 4 – Individuals having income from Business or Profession
ITR 4S – Individuals having income from Business or Profession and opting for special taxation scheme
ITR 5 – Partnership firms
ITR 6 – Companies

Depending on the sources of your income, you need to download the applicable ITR Excel utility. In case you wish to file your return manually, the aforesaid forms can be purchased locally and can be filed with the local tax officer along with copy of previous year’s return acknowledgment.

6. What are the pre-checks before uploading your return?

In order to have a hassle-free processing of your return, the following aspects should be checked:

Name – it should match with the name printed on your PAN card
Date of birth – it should match with the name printed on your PAN card
Status – Whether you are an individual / HUF / Firm and whether you are a resident / non resident
Address – it should match with the address as per your PAN card
Email address and mobile no – It is the basis of communication from CPC (avoid mentioning Chartered Accountant’s email ID or the one which is not frequently used by you)
Date of filing the return – Mention the date on which you upload your return
TDS – Verify the total TDS credit in your name by downloading your Form 26AS from the website and claim credit equivalent to the credit available as per Form 26AS
Bank details – Mention your existing bank account no, correct MICR code, IFSC code and bank branch details since refund, if any due, shall be credited only to this account
No cut / paste – Avoid using cut and paste formula while filing the ITR Excel utility else it shall corrupt your Excel file.

Needless to mention that only correct and accurate figures and dates should be filled in to avoid any discrepancy while processing your return.

7. How to file return electronically?

The first step in e-filing is to create an account by registering your self on the website at the link - https://incometaxindiaefiling.gov.in/e-Filing/Registration/RegistrationHome.html. After downloading the ITR excel utility, it is to be filled in with the relevant details. The file is to be then validated to check up for any errors using the ‘validate’ option. Subsequently, an xml file is to be generated using the ‘create xml file’ option provided on the first page of your ITR excel utility. This ‘xml file’ is then required to be uploaded on the website. Uploading the return is a very quick process (less than a minute) unless there is a system breakdown which seldom happens. (Detailed step by step procedure is available on the aforesaid website).

8. Does uploading your return mean that your return for the year has been filed?

Mere uploading of the return does not mean your return for the FY has been duly filed. Every person after uploading their return is required to take a print out of their return’s acknowledgment (ITR V), sign the same at the designated place (in blue ink only) and then send the duly signed acknowledgement via ordinary or speed post (not courier) to CPC, Bangalore (complete address is provided in the acknowledgment) within 90 days from the date of uploading of the return. Once your duly signed acknowledgement is accepted at the CPC, Bangalore, you shall be intimated about the same via message and email and only then will your return be said to have been duly filed.

9. What if you miss the July 31 deadline?

You can still file your return for the FY 2012-13 as a ‘belated’ income tax return till March 31, 2015 with interest on the tax amount (in case you are not liable to pay any tax, no interest will be levied). However, it is to be noted that in case there is any loss which is to be carried forward to the subsequent years, it is mandatory to file the return in time ie July 31 or else the benefit of set off of loss against profits in the subsequent years shall not be available.

The aforesaid article shall not be 100% sufficient for any individual to upload his / her return all by himself but shall definitely help in acquiring knowledge and assist in planning as to how should you generally proceed to file your return to avoid unnecessary rush at the last minute. So, all those who are liable to file their returns please do the needful before the July 31, 2013 due date.

Hope this helps!

Thanks

Prince Doshi

(Chartered Accountant)

Prince Doshi is a qualified Chartered Accountant and a B.Com graduate from Narsee Monjee College of Commerce and Economics. He has post qualification experience working as an Associate for BMR & Associates, a leading tax consultancy firm. Presently, he has his own Chartered Accountancy practice specializing in the field of income tax consultancy, sales tax, service tax and audit compliance.

All articles by CA Prince Doshi

Tax Planning services by Prince Doshi