Have you filed your tax returns?

Are you scared of the penalties that will be levied if you fail to file your IT returns before the July 31 deadline?

Can you file your returns after July 31? If yes, then what are the penalties?

Haven't you received a copy of Form 16 from your previous employer yet? Is there a way in which you can file your returns without Form 16?

In a chat with readers on July 25, Get Ahead tax expert Mahesh Padmanabhan answered these and many more queries related to filing your tax returns for the year 2006-07?.

For those of you who missed the chat, here is the transcript.

Part II -- Not yet filed your tax returns? 

sajid asked, Why shall we pay Rs 200-300 to the IT return agent who files our taxes? Are there any facilities to fill it online?

Mahesh Padmanabhan answers,  There are certainly facilities available for filing returns online. You could visit the www.incometaxindiaefiling.gov.in website and file returns online after you create a login for yourself. As regards usage of the services of a tax consultant, definitely they charge for the services of collection of documents, analysing the records, checking if you missed out on availing certaining dedcutions etc.

sindhu asked, Hi Mahesh, I am filing the returns for the first time. I have not yet received Form 16 from my employer. Is July 31st the last date to file? If I fail to file the returns, what will be the penalty?

Mahesh Padmanabhan answers, If the entire tax has been paid (either through TDS or advance tax) then even in case you file your returns after July 31, 2007 but before March 31, 2008 there would be no impact. However, if you file your returns after March 31, 2008 ,then you would be liable to pay a penal interest of Rs 5,000.

mnr asked, What are the penalties if I fail to meet this deadline? I know have to pay Rs 20k tax while filing the return.

Mahesh Padmanabhan answers, The penal consequences for not filing returns on time and not paying taxes on time are as follows:

1. Non payment of tax on time is covered under section 234 b & c of the Income Tax Act and the interest rate is @ 1 per cent per month till such time you file your returns.

2. Non filing of returns is covered under section 234a of the Income Tax act and the interest rate chargeable is @ 1 per cent per month. You would need to check with your consultant for the exact amount of calculation. Also, these are payable in case there is any tax pending to be paid.

mp asked, What all proof is required for showing pro-rated loan interest deduction? This is over and above the Rs 1 lakh limit in Section 80C right?

Mahesh Padmanabhan answers, The current ITR forms do not theoretically require any annexure / documents to be filed along with the returns. However, most of the income tax offices are asking for the documents to be attached. Hence, you could attach the interest certificate received from the financial institution from whom you have borrowed the housing loan. The interest deduction is outside the limits of section 80C ie Rs 1 Lakh but this definitely covers the principal repayment portion of your loan.

bachi asked, Hi Mahesh, I paid the whole tax amount I needed to pay for the year 2006-07 and I shifted the company on March 1, 2007. Still I didn't get the previous Form 16 and I am waiting for that. In case if I fail to get the previous Form 16 by July31, could I have any other option for filing the returns and please suggest me how I need to proceed in my case?

Mahesh Padmanabhan answers, If you have declared the income details of your previous employer to your current employer and in case the current employer has considered the same in the tax working then you could be sure of there being no further tax being payable. You could just fill up the ITR and file your returns without the Form 16.

Alternatively, you could register your PAN on www.tan-nsdl.com and check if you have got the tax credit from your previous employer.

rajan asked, Hi Mahesh, can you let me know as to when is the last day to file returns? Can I file returns after that? If so what is the fine that I need to pay?

Mahesh Padmanabhan answers, The last day for filing the IT returns for individuals, firms, HUF etc without tax audit is July 31, 2007. In case you do not file your returns on or before this date then you could file your returns atleast before March 31, 2008. In case you have any tax payable situation then you would be needed to pay interest @ 1 per month for the period of delay.

rajanvn76 asked, How do I show the pre-EMI interest on home loans for tax deductions?

Mahesh Padmanabhan answers, In case the construction of the property is complete then you could avail the benefit of the total pre-EMI interest in 5 equal installments from the year of completion.

pranay asked, Hi, in the year 2006-07, I have lived in India till Nov '06 and have been in UK since then earning UK salary. Do I need to declare and pay tax on income earned in UK? What is the process for ITR filing for people living outside India?

Mahesh Padmanabhan answers, Yes in case you have had income in excess of Rs 1 lakh (for male individual) before the deduction under section 80C then you would need to file your returns. You could register yourself on www.incometaxindiaefiling.com and file your returns online. In case you have a digital signature then that could be used for filing and that's the end of the process. If no digital signature is used then you would need to use and need to print the ITR V form sign it and send the same for physical filing.

sudhakar asked, Dear sir, if I have Form 16 from Pune for my previous company from period March '06 to January '07 and currently Form 16 from Hyderabad for period Feb '07 to March '07, can I file IT return in Pune?

Mahesh Padmanabhan answers, You could file your returns at the place where your PAN address is registered. Hence you have taken your PAN from Pune then you could file your return at Pune. Alternatively, in case you choose to use your office address as the preferred address then you could file your returns at the location of office.

Part II -- Not yet filed your tax returns?

Mahesh Padmanabhan is principal advisor -- direct taxes group, RelaxWithTax Consultants Pvt Ltd, a Mumbai-based personal taxation and finance solutions provider.