Compliance - Income Tax Retrun

Everyone who earns income above a certain amount is subject to income tax. Your income could be from salary, interest income from savings, income from mutual funds, sale of property or business or professional income. Income tax rates are pre-decided at the start of the year in the Union Budget (in the Parliament of India). The tax paid or deducted on these incomes is called the income tax.

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Depends on your nature of income, you have to file Income Tax Return by selecting appropriate form

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Assessment Year Vs. Financial Year

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Financial Year is the period between 1st April and 31st March. Assessment Year is the next year in which the income is liable to tax.

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For example, if your financial year is from 1 April, 2019 to 31 March 2020, then it is known as FY 2019-20. The assessment year for income earned during this period would begin after the financial year ends–that is on 1 April 2020 until 31 March 2021.(AY 2020-21)

 

Form 16

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Form 16 is a TDS certificate that an employer issues to you when TDS is deducted by the employer. An employer is required to deduct tax at source (therefore the name TDS - Tax Deducted at Source) when the employer pays salary to the employee (you). The employer deducts this tax on behalf of the Government and after deducting deposits the tax to the Government. The employer is then required to give a certificate to the employee giving the details of tax deducted. This certificate is called the Form 16.

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In case no TDS has been deducted by the employer they may not issue you a Form 16.

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You will require your Form 16 from your employer to file your tax return. You can directly upload your Form 16 and file your income tax return quickly.

 

Form 16A

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Form 16A is also a TDS Certificate. While Form 16 is for only salary income, Form 16A is applicable for TDS on Income Other than Salary. For example, a Form 16A shall be issued to you – when a bank deducts TDS on your interest income from fixed deposits, for TDS deducted on insurance commission, for TDS deducted on your rent receipts.

In fact, when TDS is deducted on any other income you receive that is liable for such deduction. This certificate also has details of the name and address of deductor/deductee, PAN/TAN details, challan details of TDS deposited. It also has details of income you have earned and the TDS deducted and deposited on such income.

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All details that are there in Form 16A are available on Form 26AS. This can be used to file your return. However, the same is not in the case of Form 16. Details of Form 16 that are available in Form 26AS is only TDS deducted by the employer.

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Both the forms are important and are required to help you file your return smoothly. You can also verify the income details and how much TDS has been deducted and at what rates.

 

Fails to file Income Tax Return

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In case you do not file, the Income tax Department will send you a notice asking you to file your return and may ask you to pay a penalty for not filing your income tax return. You will not be given your refund. If you are found to owe the government taxes, the interest on the base tax keeps adding up till you pay.

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If you are found to owe the government taxes money, then the interest keeps adding up till you pay. A penalty may also be levied.

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A new section 234F has been inserted in Income Tax Act, 1961 with effect from Assessment Year 2018-19 (Financial Year 2017-18). Under this section, fee (penalty) is levied if the Income-tax return is not filed within due date. Earlier penalty for delay in filing of return was levied at the discretion of Assessing Officer. But now, the same is payable before filing of Income-tax return.