Filing of Income Tax Return for AY 2015-16 and Advantages & Disadvanteges of ITR AY 2015-16

Income Tax Return is not mandatory whose income below Rs. 250000/-.  Apart from this if you have pan card must file income Tax Return before due date, even if your Taxable Income is less than Rs. 250000/-.  

Heads of Income:

Salaries & Perquisites: Salary and allowance (House Rental Allowance, Hardship allowance) and benefits (such as Rent free accommodation, car, stock options etc.) provided by employer either free or at a concessional rate.

Income from House Property: Rental income from House Property.

Profits & Gains of business or profession: Business Income

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Capital Gains: Profit/loss on sale of shares, mutual funds, Property etc.

Income from other sources: Interest on fixed deposit, dividend, Gifts etc. 

Allowable Deductions:

• Professional Tax levied State govt. from salary is deducted,
• Transport allowance is deducted from salary up-to Rs. 800/- per month,
• Children education allowance is deducted from salary up-to Rs.100/- per month per child,
• Insurance Premium u/s 80C up to 1 lac,
• Payment of medical insurance premium. Deduction is available up-to Rs.15,000/ for self/ family and also up to Rs. 15,000/- for insurance in respect of parent/ parents of the assessee,
• Donation to certain funds, charitable institutions u/s 80G,
• Deduction of up to Rs.10,000/- for interest on savings bank account or post office savings account,
• Rebate of Rs. 2000/- is available if Total income is less than Rs. 5 lacs

Deductions for Housing Loan:

For Principal Repayment:

• Deduction of Rs. 1 lac u/s 80C is allowed on Payment Basis if construction of house property is completed.

For Interest on loan:

• If Property is constructed/bought within 3 years then For self occupied Property : up-to Rs. 2 lacs, For Let out Property: No limit,
• If Property not constructed/bought within 3 years then Deduction up-to Rs. 30,000/- only.
• Pre-construction interest is allowed after completion in 5 equal installments without any limit.

Clubbing of Income

Concept of joint filing of tax return does not exist. There exists clubbing provisions for income of minor children and spouse in certain circumstances.

Salary earned by spouse:  Spouse salary from a concern where individual has a substantial interest ( > 20% stake)- Salary due to technical/professional expertise excluded).

Transfer of asset to spouse: Transfer of asset to spouse for inadequate consideration or otherwise than in connection with an agreement to live apart.

All Income of minor child: Exclusion available for manual work and Activities involving application of skills

Modes of tax payment

Withholding Tax

• Tax to be withheld from the remuneration paid by the employer even after departure if income exceeds maximum threshold limit not chargeable to tax .
• Annual certificate to be issued by the employer for salary and benefits.
• Withholding at prescribed rates on personal income.

Advance Tax

• Advance tax payable on
• other income, where it is liable to tax in India. (Tax Limit INR 10,000)
• Advance tax payable on personal income in three installments
• 30 per cent by 15 September
• 60 per cent by 15 December
• 100 per cent by 15 March

Income Tax slab for individuals

Advantages and Disadvantages of filing Return.

• Return filing is mandatory for getting any loan,
• Return filing is mandatory for getting VISA,
• For getting Credit Card,
• Standard proof of income,
• For quick registration of immovable properties,

Disadvantages of filing Return. If Return is not filed

• Penalty of Rs. 5000/- will be levied & also interest u/s 234A is required to be paid,
• Losses can not be carried forward to next year,
• No Revise Return can be filed,
• Interest up-to 1% per month will be levied.