Frequently Asked Questions on income tax Return
Frequently Asked Questions on income tax Return
Q.: What ways/methods does the government use to collect income taxes?
The government collects taxes in three ways:
- Taxes are paid voluntarily into various authorized banks by taxpayers. Taxpayers, for example, pay Advanced Tax and Self-Assessment Tax.
- Taxes deducted at source [TDS] from the receiver’s income.
- Taxes collected at the point of collection [TCS].
To avoid legal action, every earning individual has a constitutional obligation to compute his income and pay all taxes correctly and on time.
Q.: Where and for how long should a business does a book of account be kept?
All accounting books and related papers should be stored at the principal place of business, which is typically where the business or profession is conducted. All applicable papers must be kept for a minimum of six years after the end of the relevant Assessment year, or a total of seven financial years after the end of the relevant year. When an assessment is reopened, all books of account and other documents that were kept and maintained at the time of the reopening should be kept and maintained in the same manner until the reopened assessment is finished.
Q.: Every person’s earnings are subject to income tax. What is considered income under the Income Tax Act?
Ans. The term “income” has a very broad and encompassing meaning under the Income Tax Law. In the case of a salaried employee, all compensation received from an employer, whether in cash, kind, or as a benefit, is considered income. A businessman’s net profit will be his source of revenue. Interest, dividends, commissions, and other types of income can all come from assets. Furthermore, money may be produced by the sale of capital assets such as buildings, gold, and so on. Income shall be computed in accordance with the applicable provisions of the Income-tax Act of 1961, which establishes detailed conditions for calculating taxable income under various kinds of income.
Q.: What is a regular assessment tax, and how do you pay it?
Every individual is responsible for appropriately computing and paying his or her taxes under the Income Tax Act. When the Department discovers that income has been understated and that tax is owed as a result, it takes steps to calculate the exact tax amount that should have been paid. Tax on regular assessment is the name given to the demand placed on the person. The regular assessment-400 tax must be paid within 30 days of receiving the demand notification.
Q.: What is the Income Tax Administrative Framework?
The Ministry of Finance is in charge of the Indian government’s revenue functions. The Central Board of Direct Taxes has been tasked by the Finance Ministry with the job of administering direct taxes such as income tax, wealth tax, and so on (CBDT). The CBDT is part of the Ministry of Finance’s Department of Revenue. The CBDT provides critical inputs for direct tax policy formulation and planning, as well as administering direct tax laws through the Income-tax Department. As a result, the Income-tax Department administers the Income-tax Law under the administration and supervision of the CBDT.
Q.: What does “assessment completion” imply?
Assessment completion signifies that the assessee’s assessment proceedings have been completed and closed.
Q.: What are the various Forms that can be used to file an income tax return?
There are numerous types. ITR 1/2/3/4/5, for example.
Q.: Where can I get these forms?
On the Income Tax website, forms are readily available.
Q.: Is it possible to file a tax return by hand?
Yes, you can file ITR1 and ITR 4 by hand. It is designed specifically for senior persons.
Q.: What are the benefits of submitting a tax return?
There are several advantages to submitting an income tax return, including the possibility of receiving a refund.
Q.: What are the ramifications of failing to file tax returns?
If a taxpayer does not file income tax, the INCOME TAX DEPT. may send them a notice.
Q.: What was the penalty prior to the enactment of Section 234F?
Prior to the adoption of section 234F, the penalty for failing to file a tax return was imposed under section 271F.
If the income tax return is not filed by the end of the relevant assessment year, the Assessing Officer may levy a penalty of Rs. 5,000/- in his discretion. However, with the enactment of Section 234F, this section has been implemented for the assessment years 2018-19 and onwards.
Q.: How can I avoid paying the Income Tax Department costs under Section 234F?
To avoid paying a late fee under section 234F, one must file the income tax return on time for each assessment year 🙂 Visit RJA for simple ITR filing.
Q.: Can late fees under Section 234F be waived in genuine cases?
No, fees under Section 234F are required. As a result, it cannot be waived by the income tax authority.
Q.: Can excess TDS deducted be deducted from the fees levied under section 234F?
Yes, the excess TDS deducted (which you would have received as a refund) will be adjusted in the payment of late costs under section 234F by the income tax department. Taxpayers who do not file their income taxes may receive a notice from the Income Tax Department.
Q.: Will the intimation under section 143(1) be affected by the amendment made under section 234F?
In accordance with the establishment of section 234F, a consequential adjustment to section 143(1) was made. The charge payable under section 234F will now be included in the computation of the amount payable or refund due on account of return processing, as applicable.
Q.: Is 234F a penalty or a fee?
The sum due under section 234F of the Income Tax Act is referred to as late fees in the Income Tax Act. However, it has been observed that many of us refer to the sum under section 234F as a penalty rather than fees, which is incorrect.
The reason for this is that this fee is more hefty in nature, and the assessing officer has no say in determining its applicability. It is applied automatically after the due date.
Q.: What does Section 234F of the Income Tax Act of 1961 mean?
- As per section 234F of the Income Tax Act, if a person is required to furnish a mandatory return of income under section 139 and fails to do so by the due date, a late fee of
- Rs 5,000/- is levied under this section if the return is furnished sometime before the 31st day of December of the assessment year.
- In any other case, Rs 10,000/-
- In any scenario where the taxpayer’s total income does not exceed Rs 5,00,000/-, the late charge due should not exceed Rs 1,000/-
- Section 234F became effective on April 1, 2018, for income tax returns filed on or after that date.
Q.: What are the consequences if I don’t file my income tax return after paying all of my owed taxes?
If you do not file your IT returns even after paying your taxes, the IT department may issue a notice of non-compliance after the end of the relevant assessment year, and late filing fines will be charged u/s 234F.
Q.: My income is $450,000; if I file my return after the due date (August 31st), what is the amount of fees u/s 234F that must be paid at that time?
Section 234F specifies that the fee shall be Rs.1000 if the income is less than Rs. 50,000.
As a result, if you file between the 1st of August and the 31st of March, the fee/penalty in your case will be Rs. 1000. It continues to run from the 1st of September to the 31st of March in financial year 2020-21.
Q.: My income is Rs. 6,50,000, and if I file my return for FY 2020-21 after the due date, say on September 10th, 2021, what is the amount of Fees u/s 234F that must be paid at that time?
Individuals with income over Rs. 5,00,000 who file their return before December 31st of the assessment year are subject to a fee of Rs.5,000, according to section 234F. As a result, the maximum fee that can be charged in your case is Rs. 5,000.
Q.: My income is Rs. 9,80,000, and if I file my F.Y. 2020-21 return after the due date, say on January 2, 2022, what will be the amount of Fees u/s 234F due at that time?
Individuals with income in excess of Rs. 5,00,000 who file their income tax return after December 31st but before March 31st of the assessment year would be charged a fine of Rs.10,000, according to section 234F.
Q.: Is it possible to file the return for financial year 2017-18 after the 31st of March 2019 by paying the late fee of Rs.10,000 u/s 234F?
No, it is not possible to file the income tax return for fiscal year 2017-18 after March 31, 2019. Under the time limit of section 139(4) of the Finance Act 2017, you cannot file your return after the end of the relevant assessment year.
Q.: If I filed the Return but did not e-verify it, will I still face a penalty under Section 234F?
No, according to section 234F, the penalty is imposed on late filing of the return but not on late e-verification of the return. As a result, if you e-verify after the due date of filing the return but within 120 day of filing the return, the fee under section 234F will not be levied.
Q.: My only source of income is pay, and my company handles the TDS. Will I still have to pay late fees if I’m in violation of 234F?
Yes, even if your employer has deducted TDS, you will be charged a fee under section 234F. The reason for this is that the 234F fee is assessed in connection to the timing of return filing rather than the payment of taxes.
Q.: I am a retired guy whose only source of income is a bank fixed deposit. The bank has already deducted the TDS. Is there a fee under section 234F that I still have to pay?
Yes, even if your bank has deducted TDS and your total income exceeds the basic exemption limit, you would be charged a fee under section 234F.
Section 234F fees are levied in relation to the timing of return filing rather than the payment of TDS.
Q.: My income is Rs. 350,000, and I am entitled to a Rs. 1,50,000 deduction under Section 80C. So, if my income after deductions is Rs. 2,00,000, is Section 234 F of the Income Tax Act of 1961 still applicable in my case?
Yes, the penalty under Section 234F would apply in your case. In your case, you are required by law to file an ITR because your income before deductions exceeds the basic exemption limit. As a result, if you file a late return, section 234F will apply. In your case, late fees of Rs. 1000 will apply.
Q.: If my gross total income (income before deductions) is less than the exemption limit, am I still obligated to pay a late filing charge under section 234F of the Income Tax Act of 1961?
No, if your income before deductions is less than the basic exemption limit and you are not required to file an income tax return, but you still file a late return, the sec 234F penalty will not apply.
Q.: Is it true that if my income is less than Rs. 2,50,000 and I file my return willingly after the due date, I will be charged late fees?
No, if your income is below the exemption limit or nil and you are filing a late income tax return, fees under section 234F will not apply to you.
Q.: If I file a late income tax return, will interest under Section 234A be levied in addition to the payment of fees under Section 234F?
Yes, both will be applicable at the same time if your tax is payable. However, if a return is filed late and no tax is due, interest under section 234 A is not levied and only a late fee under section 234F is levied.Just don’t get mixed up in either of these sections. Section 234A provides for the imposition of a 1% interest rate on the tax amount owed, whereas Section 234F provides for the imposition of a definite amount of late fees based on the date of filing of the return.
As a result, if your tax is unpaid, both will apply if you fail to file your return on time under section 139(1).
Q.: What happens if my total income exceeds Rs. 5,00,000 and I file my return after the due date, i.e. on September 3, 2019, along with the applicable fees?
In this case, the income tax department would process the return following e-verification in accordance with the normal provisions of the income tax law.
Q.: Is a senior citizen exempt from the fees imposed by Section 234F?
No, there is no such penalty exemption under Section 234F. The levy conditions and fee amount remain the same for all individuals, including super senior citizens.
Q.: If I receive a refund on my ITR for Financial Year 2020-21, will the Section 234F penalty be applicable?
Yes, even if you are eligible for a refund in ITR for F.Y 2020-21 and later, late fees u/s 234F will apply in your case according to the applicable provisions. Furthermore, the Income Tax Department will deduct the fees fIncome tax Dept. t, followed by the interest (if any) from your refund amount.
Q.: What is the distinction between Sections 234F and 234E of the Income Tax Act?
Section 234E imposes late fees for failing to submit a TDS return by the due date. On the other hand, Section 234F imposes late fees on income tax returns filed after July 31.
Q.: What exactly is Section 139 of the Income Tax Act of 1961?
Section 139 of the Income Tax Act of 1961 defines the various types of income tax returns that can be filed by different assessees. Mandatory/voluntary return under section 139(1), loss return under section 139(3), belated return under section 139(4), revised return under section 139(5), income tax return of a charity or religious institution under section 139(4A), and so on.
Q.: What is Section 271F of the Income Tax Act?
Section 271F imposes a penalty for failing to file an income tax return by the end of the relevant fiscal year, at the discretion of the assessing officer. However, as of April 1, 2017, Section 271F has been repealed and a new late filing fee under Section 234F has been introduced.
Q.: What is Section 234D of the Income Tax Act?
Section 234D imposes interest on the excess amount of refund given to the assessee. When an assessee receives a refund under Section 143(1) and it is later discovered that the refund was either not due or was granted in excess. The excess tax refund must then bear interest at the rate of 0.5 percent per month.
Q.: What is interest under section 234A?
Section 234A imposes a 1% per month penalty for late filing of an income tax return. More information about Sections 234A, 234B, and 234C can be found on our blog.
Q.: What are the income tax return filing fees?
Self-assessment allows the assessee to file an income tax return at no cost.
If a consultation for tax savings and planning is required, consultation fees must be paid.
Q.: What is the distinction between total income and gross total income?
Gross Total Income is the sum of all five types of income: salary, house property income, business income, capital gain income, and income from other sources. Total Income, on the other hand, is the amount of money left over after all deductions under Chapter VIA, such as life insurance premiums, PPF contributions, and NPS contributions, have been deducted from Gross Total Income. To put it another way, it is the amount of income that is subject to taxation, which is why it is also referred to as taxable income.
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