How to file Income tax returns Online

The Website of the income tax department allows to file the returns online. Its a very simple technique. Income Tax Department has introduced a convenient way to file these returns online using the Internet.

Every new user has to register at this website in order to avail the e-Filing facility. After completing the registration process and logging in, the user may download the software tools (this is and excel file) from the download section. Based on all the relevant information the required ITR Form should be filled using the software provided. The software would generate the XML format of the return which should be uploaded on this website. On successful transmission of the return a receipt will be generated in the form of a provisional acknowledgment.

If you have digital signature you can complete the submission but if not you can print the acknowledgment and send it to the tax authorities.

The web site is for individual tax returns is "ITR filing"

Video on how to fill ITR1 form part 2

It seems like the last video i posted on how to fill ITR1 form for filing income tax returns, was incomplete and i found a second video as well for the same on you tube as well. And of course i would like to thank the original publisher here too i.e. www.raagvamdatt.com

Video on how to fill ITR1 form

I found this video on youtube which describes the filling of ITR 1 form for filing personal income tax returns. It claims on you tube "Step by step instructions that guide you about filling the Income Tax Return Form 1 - ITR1 before filing it. It's really simple".

Thanks to the original publisher www.raagvamdatt.com of course.

Budget Highlights - 2009 -10

I really wanted to give some budget highlights on my blog for direct taxes since they impact us the most...

§ Exemption limit in personal income tax raised by Rs. 15,000 from Rs. 2.25 lakh to Rs. 2.40 lakh for senior citizens; by Rs. 10,000 from Rs. 1.80 lakh to Rs. 1.90 lakh for women tax payers; and by Rs. 10,000 from Rs. 1.50 lakh to Rs. 1.60 lakh for all other categories of individual taxpayers.

§ Deduction under section 80-DD in respect of maintenace, including medical treatment, of a dependent who is a person with severe disability being raised from the present limit of Rs. 75,000 to Rs. 100,000.

§ Surcharge on various direct taxes to be phased out; in the first instance, by eliminating the surcharge of 10 percent on personal income tax.The effective maximum marginal rate is 30.99%.

§ Sun-set clauses for deduction in respect of export profits under sections 10A and 10B of the Income Tax Act being extended by one more year i.e for the FY 2010-11.

§ Fringe Benefit Tax on the value of certain fringe benefits provided by employers to their employees to be abolished wef AY 2010-11.

§ Scope of provisions relating to weighted deduction of 150% on expenditure incurred on in house R & D to all manufacturing businesses being extended except for a small negative list.

§ Businesses to be incentivised by providing investment linked tax exemptions rather than profit linked exemptions.Investment linked tax incentives to be provided, to begin with, to the businesses of setting up and operating ‘cold chain’, warehousing facilities for storing agricultural produce and the business of laying and operating cross country natural gas or cude or petroleum oil pipeline network for distribution on common carrier principle.Under this method, all capital expenditure, other than expenditure on land, goodwill and financial instruments to be fully allowable as deduction.

§ Minimum Alternate Tax (MAT) to be increased to 15% of book profits from 10%.The period allowed to carry forward the tax credit under MAT to be extended from 7 to 10 years.

§ Commodity Transaction Tax (CTT) to be abolished wef 1.04.2009.

§ Donations to electoral trusts to be allowed as a 100% deduction in the computation of the income of the donor.

§ Deduction u/s 80E of the Income Tax Act allowed in respect of interest on loans taken for pursuing higher education in specified fields of study to be extended to cover all fields of study, including vocational studies, pursued after completion of schooling.

§ To mitigate the practical difficulties faced by chartitable organisations, anonymous donations received by charitable organisations to the extent of 5% of their total income or a sum of Rs. 1 Lakh, whichever is higher, not to be taxed.

§ Scope of presumptive taxation to be extended to all small businesses with a turnover upto Rs. 40 lakh.All such taxpayers to have option to declare their income from business at the rate of 8% of their turnover and simultaneously enjoy exemption from the compliance burden of maintaining books of accounts. As a procedural simplication, they are also to be exempted from advance tax and allowed to pay their entire tax liability from business at the time of filing their return.This new scheme to come into effect from the financial year 2010-11.

§ Tax holiday u/s 80-IB (9) of the Income Tax Act, which was hitherto available in respect of profits arising from the commercial production or refining of mineral oil, to be extended to natural gas.This tax benefit to be available to undertakings in respect of profits derived from the commercial production of mineral oil and natural gas from oil and gas blocks which are awarded under the NELP-VIII round of bidding.The section to be retrospectively amended to provide that “Undertaking” for the purposes of section 80-IB(9) will mean all blocks awarded in any single contract.

§ New Pension System (NPS) to continue to be subjected to the Exempt-Exempt-Taxed (EET) method of tax treatment of savings.Income of the NPS Trust to be exempted from income tax and any dividend paid on this Trust from Dividend Distribution Tax.All purchase and sale of equity shares and derivatives by the NPS Trust also to be exempt from Securities Transaction Tax.Self employed persons to be enabled to participate in the NPS and to avail of the tax benefits available thereto.

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Which Income tax form to fill?

Still Confused about the type of form you need to fill up for income tax returns. Well Individuals have three types of forms they can file depending on the source of income.

• ITR-1 For individuals having income from salary, pension and interest earned in the financial year
• ITR-2 In addition to the above income sources, income from capital gains, income/loss from house property and income from any other source
• ITR-4 For all individuals having income from a business or profession

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How to make a family Budget?

Well everyone needs to budget and that's what i am trying to create for my family right now, the budget needs to be based on the income. Will depend on whether your family is a single income or a double income family, you always need a budget to work on. A family budget is usually like a personal budget just in a bigger perspective. Here are some ways to make a budget...

1. First and always first for any budget determine the total income.

2. Second - Determine what needs to be paid like bills, Home Loan payments, Car loan payments, school fees etc.

3. Don't spend needlessly like eating out everyday, try taking lunch from home or only go out to eat once a month. Analyze all your extra expenditures.

4. Make a excel file showing all the expenditures and incomes just like a bank statements.

5. Try to optimize your savings versus expenditures figures in the consecutive month till you have reached a figure where your amount of savings is more than expenditures.

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Why do you need a PAN Card?

Many people have asked me this question? It is actually ignorance on the part of some of the people to the importance of a PAN card. The salaried class is ofcourse most aware that to purely out of a necessity by the employer for Tax deduction at Source but most of the other people are just purely ignorant Let me first define the PAN Card -

PAN - A ten Digit alpha numeric number issued by Income tax department.

Who Must have a PAN?

i. All existing assesses or taxpayers or persons who are required to furnish a return of income, even on behalf of others, must obtain PAN.

ii. Any person, who intends to enter into financial transaction where quoting PAN is mandatory, must also obtain PAN.

iii. The Assessing Officer may allot PAN to any person either on his own or on a specific request from such person.

Now the main Question, Why do you need a PAN?

It is necessary to quote the PAN in documents related to the following transactions:

• Sale or purchase of immovable property valued at Rs 5 lakh or more. If there are co-owners (buyer or seller), the PAN of both the owners will have to be mentioned. If a nominee holds the property, the PAN of the legal owner must be mentioned. The PAN should be disclosed in the document pertaining to purchase or sale of the property.

• Sale or purchase of a motor vehicle requiring registration other than two-wheelers. This does not include vehicles running on fixed rails or special vehicles for use only in factories or in other enclosed premises or vehicles of less than four wheels with engine capacity of not more than 25 cc.

• A time deposit of more than Rs 50,000 with any banking company and deposit of more than Rs 50,000 with post-office savings bank. This requirement is not mandatory when investing in post-office National Savings Certificate or Kisan Vikas Patra, and the PAN will be required only if the time deposit exceeds Rs 50,000.

• Contract of sale or purchase of securities exceeding Rs 1 lakh in value, including shares, bonds, debentures, derivatives, units and government securities.

• Cash payment of Rs 50,000 or more for purchase of bank drafts, pay orders or bankersÕ cheques during any one day.

• Cash payment exceeding Rs 25,000 in connection with travel to any foreign country (fare or purchase of foreign currency).

• Application for installation of telephone, including cellular telephone.

• Payment to hotels and restaurants against bills exceeding Rs 25,000 at any one time.

• Opening a bank account.

• Application for issue of a credit card.

• A cash deposit of Rs 50,000 or more with any bank during any one day.

• Payment of Rs 50,000 or more to a mutual fund for purchase of units or to a company for acquiring its shares or to a company/institution for acquiring its debentures/bonds or to RBI for acquiring bonds.

• Minor intending to open time deposit or bank account should quote the PAN of either father or mother or guardian in whose hands income is likely to be clubbed.

A lot of reasons there huh but remember you really do need a PAN card. Its easy. Its not that difficult to get either, Got this website "http://www.utitsl.co.in".

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