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  • Category: Tax Planning

    Help regarding tax filing for the first time

    Are you planning to file tax returns for the first time? Wondering how to proceed with all the documentation and whether it is legal to file tax returns for five years together? On this Ask Expert page, get financial advice for resolving your doubts.

    My wife wanted to file income tax first time and she is 35 years old. She has FD amount of 23 lakhs in her account. We consulted one auditor and she said that you can file ITR-1 for 2 years online and since the system is allowing for 3 more years we can file tax offline for it.

    Is it legal to file income tax for total 5 years that too beyond 2 years, will there be some trouble later for all this ? TDS has been collected and it amounts to around 45k.
  • Answers

    6 Answers found.
  • Now a days the income tax filing has been made so simple and straight forward that one should not fear for anything.

    Only thing is one should disclose his income honestly so that later on no complication arises.

    For example income from agriculture is non taxable but you have to mention it in your return just for record sale. Interest income from bank FD and post office deposits are taxable. Interest on saving bank account is also taxable if it is more than Rs 10000. Dividend from shares and mutual funds is non taxable but you have to show it in your records. There are many other incomes which are treated by Income tax department as taxable or not taxable.

    So once you show everything then while filling income tax return the TDS amount will be deducted from income tax amount and net payable will be asked from you which you can deposit either online or by a bank chalan.

    Once you pay this amount you will get an acknowledgement and within 2-3 months you will get the assessment information from Income tax department by email.

    You can file income tax return for previous years also and there is absolutely no problem in that. Only thing is if some tax is due you have to pay it along with penalty.

    Initially you can take help of an agent and once understood properly you can do it yourself.

    Thoughts exchanged is knowledge gained.

  • It is a matter of 1 or 2 hours to file IT return online. But you should keep all the required information on hand when you sit for doing this. All form 16s should also with you. You have to login into the site of the income tax department. Another option is you can file your return through your bank online site by logging into your internet banking account. The site will guide you. It is very easy to understand also.
    As suggested by your advised you can do it offline also. But doing online submission is easy and fast. These days we find many agents who are doing this income tax filing online for you. You can sit with that agent and see that how he is doing. The amount these agents charge also very less basing Rs.300/- to Rs.800/- based on the work he has done. By going to him he will advise you the chances of reducing the tax by showing some exemptions etc. I don't suggest offline submission. Even last year returns you can submit now.

    always confident

  • As per your details it is advised that your wife should definitely file I Tax return. The income from bank FDs of 23 lac will be approximately 1.6 lacs which is below the threshold. But your wife may have some other income also which are to be added all to gether and are to be reflected in the return.

    In the beginning you may have to take help of a tax return professional. Otherwise it is simple and straight forward and very interactive and user friendly.

    So you can fill for last years also as well and once you fill them for few years you will feel very comfortable and free from embarrassing questions from tax authorities.

    Please remember that while filing tax return one has to include everything which is defined as income like gain from investments in shares and bonds etc. Another interesting thing is there are some income which are non taxable also so by showing them in your return you show your assets but do not pay taxes. What better we can expect from tax system.

    Knowledge is power.

  • Has the auditor advised you after seeing the full facts of your financial data? If so you may follow his advise as he is a professional and had seen your financial details.

    However if it was just a general suggestion without seeing your financial data in full, then either you may consult him on the matter or you may do the needful yourselves.

    Is the 45k TDS total of more than one year or only this year? Roughly calculate he income for last few years including the FD interest. Yearwise calculate the tax required, TDS paid and refund if applicable. Start filing at least the latest return first.

    First of all register and log in to the govt tax e filing site. Then you will be able to see various details on you related to the PAN numberVerify the 26 AS details. Relate it with your income in the relevant year. You can also see the status about your requirements and discrepancies listed for each year,if needed and relevant. You may come to know what happened to the TDS of previous years also. You may have to do the rectification accordingly, to file return by climimg refund or to remit further tax after assessment.

  • Yes the total interest earned through interest is 1.6L which falls under 2.5L category. My advisor suggested that I should file online for 2 years and offline for 3 years.

    That is total 5 years so that i can get refund of 3 years also. Is it legal and will i face any problems in future ?

  • You can file return for last 2 years without any issues, but even the year before last year will attract penalty of Rs.5000 because of late filing.
    For remaining 3 years, how the CA advised filing that I am doubtful as it is not legally allowed. If you want to claim refund of TDS or tax deducted on interest then it it possible only for previous 2 years but for 3 years previous to 2 years is not possible.

    Only exception is that, you meet the assessing officer in person and if he is satisfied with your response then he may allow filing of returns for 3 more years in addition to 2 years.

    Try you best to convince the assessing officer as they are hard but to crack and I have personally failed to do so for one of my colleagues with same issue as you are facing.

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