Rakesh, an IT professional met his friend Sumedh over a casual Sunday lunch.  Sumedh is very stressed these days and told Rakesh that, “I missed the deadline of July 31^st2010, and March 2011 is round the corner, yet could not manage to get my Income Tax Return filed.” Rakesh could not believe that Sumedh is worried about such an unnecessary thing. “Why? Doesn’t your employer cut TDS while making your payments?” To which Sumedh immediately replied that “yes, He does but let me tell you one thing my dear, Every person with taxable income should file an income tax return, even if the tax liabilities have been taken care of by the employer through tax deducted at source.” Now this was Rakesh’s turn to get wrinkles on his forehead “WHAT!! Tax gets deducted from my salary every month; I still need to file Income Tax Return?”….. Many professional and other salaried individuals in India still have these kinds of misconceptions regarding requirement of Income Tax Return, just like Rakesh. Deduction of tax does not mean that you do not have to file income tax return. There are misconceptions that people have formed in their minds about Income Tax Return, some of them are summarized as below: A. Filing tax returns is a complex and cumbersome process. Not really! The government has notified specified simple forms which can be used by an individual to file tax returns. An individual can file income tax return online also. B. I don’t want to give my data to the Income Tax Authorities. Your data is already available with the income tax authorities. Providing your PAN card details for availing various financial services and investments is mandatory. You cannot trade in stocks, buy Mutual funds, and deposit/withdraw large sums of money in/from banks without providing your PAN Number. All these details are collated by the Income Tax Authority in form of Annual Information Returns filed by your Depository Participant, Asset Management Company, Credit Card Issuer or Banks, etc. Even your employer provides your income and tax deduction particulars to the Income Tax authorities. C.     Disclosing my complete income through ITR will bring further queries from Department and I don’t want to get involved in that process. Taxpayers should not panic; you will be given full opportunity to put forth views and evidences to support your claims, in case the department seeks any further details from you. D.    I don’t want to pay tax, better I don’t file any ITR or disclose my income. All citizens of a country are morally and legally bound to pay their fair share of tax. A large percentage of people who pay tax think as if Government is trying to steal their hard earn money. Well, that’s not true. Money collected from taxes help a country become stronger and helps Government in utilizing the fund for numerous social programs. Besides willful or intentional evasion of tax attracts penalty and prosecution too. E.     I am a salaried person and have no other source of income. Why would I be required to file ITR? – Filing of tax is compulsory for every person whose gross total income before allowing for any deductions and exemptions exceeds the basic income tax exemption limit. F. Besides following points should be kept in mind, if you don’t file an ITR or choose to file one after due date:

• In case of additional tax liability, you will have to pay interest @1% per month;
• In case of loss, you will not be allowed to claim and forward the same the  next year;
• You will not be allowed to revise your return in case of mistake in original return, if the return of income is not filed within due date of 31^st July; and
• And if you don’t file return before 31st March the subsequent year, penalty will be levied for Rs.5,000

Dear friends, relax, you just need not to worry about your return of income. Taxmantra.com is here to free you from all your tax worries. At www.Taxmantra.com, we just need your salary certificate and your income details to file your return of income. We at www.taxmantra.com also provide full year tax support and efficient tax planning at most reasonable cost. Please send your salary certificate at the earliest for financial year 2009-10 (March 2010) to file your return of income. Or visit us at www.taxmantra.com for existing offers like “Start Now for March 2011”. Alok Patnia Founder and Director at www.Taxmantra.com