INACCURATE RETURN CALCULATION CAN INCREASE TAX LIABILITY

These are the last days of filing income tax return. Earlier you just handed over your Form 16 to your Chartered Accountant or TRP to file your return but now efiling is compulsory for people having annual salary of more than Rs 10 Lakh.,
Generally, returns filed electronically would have all the information mandatory to be filled in. The ITR would be considered inaccurate if certain details mentioned in return are wrong or certain details are missing altogether.

-COMMON MISSES: The most common detail which tax payers forget to mention is the interest income from FDs. The second most important […] Read more

LESSER KNOWN TAX DEDUCTIONS

Many individuals think that tax deductions means investing in public provident fund or life insurance policy only. But there are lots of other deductions that are available and people don’t claim them as they are not aware of them. Here are some of the deductions about which people of unaware:
1. MEDICAL EXPENSES FOR SPECIFIED DISEASES LIKE AIDS, CANCER
The actual expenditure incurred on treatment of specified diseases like AIDS, Cancer, etc. is deductible to the extent of Rs. 40,000 or the actual expenses whichever is lower. And in case of Senior Citizens the maximum limit is Rs. 60,000.
2. DEDUCTION OF MEDICAL EXPENSES INCURRED […] Read more

REASONS FOR DELAYED TAX REFUNDS

1. MISMATCH IN TDS DATA: If any details of TDS given by tax payer do not match with data with Income Tax Department, then tax refund of such tax payer will be delayed and he will be issued a notice regarding providing proof of the details given by him.
2. WRONG ADDRESS: Many people provide their current address while filing income tax return. Income tax department has the address given by them at the time of PAN application, so this mismatch can also pose problems in relieving tax refunds. You must update your address as it changes, with Income Tax Department.
3. MISSING BANK ACCOUNT […] Read more

REFUND OF EXCESS TAX BY IT DEPARTMENT

IT departments has asked its officials to refund excess tax to tax payers even if they are hit by limitation period of 4 years. CBDT ( Central Board of Direct Taxes) has issued circular to assessing officers regarding issuing excess amount after due verification, so adjusted by CPC (Central Processing Centre at Bengaluru) due to inaccurate figures of arrear demand uploaded by assessing officer.
This circular will also help assessing officers in resolving disputes regarding arrear demands shown as outstanding against them in records and refund the excess tax collected.

Under the existing provisions of the Income Tax Act, the assessing […] Read more

TAX PLANNING

Tax planning is arrangement of financial activities in such a way that maximum tax benefits, as provided in income tax act, are availed of. Usually people confuse tax planning with tax avoidance and tax evasion. But these three are different terms.
TAX AVOIDANCE: It is the act of dodging without directly breaking the law. It is done with a purpose to defraud the revenue.
TAX EVASION: Through tax evasion dishonest tax payers try to reduce their taxes by concealing income, inflation of expenses, etc.

The most important step in tax planning is divide and rule i.e. total income of family should be divided […] Read more