Do you know that, this year onwards, you will have to file your returns through a new from called ITR? Do you know what these ITRs are? How and where can you get these new tax forms?
If you are not comfortable with these forms, can you file your returns using the earlier Form 2D?
In a chat with readers on May 30, Get Ahead tax expert Mahesh Padmanabhan answered these and many more queries related to saving tax and ESOPs.
For those of you who missed the chat, here is the transcript.
kiran asked, I am a salaried employee. I have PAN card. This year how to file my returns?
Mahesh Padmanabhan answers, Filing of returns this year seems to have been complicated by the introduction of the new forms. However, essentially you need to note that in the current year you could proceed as usual and file your returns using the good old Saral form or the 2D form.
kiran asked, Is it necessary to file Form 16 with my returns?
Mahesh Padmanabhan answers, Though the new ITR specifies that no annexures need to be attached along with the returns, in our opinion this would only be applicable for online returns being filed with your electronic/ digital signature. It would be advisable to attach the Form 16 along with your returns in the current year till the OLTAS (online tax accounting system) stabilises.
Selvam asked, Can the old Saral be still used, if there is no other source of income?
Mahesh Padmanabhan answers, In the current year you could use the old Saral form, but from the next year you need to use the new ITRs.
Akilesh asked, Hi Mahesh, if I have changed my company in between the financial year say I have worked in the 1st company for 2 months (Apr '06 & May '06) and my 2nd company (Jun '06 to Mar '07). Can I file my returns only for the 2nd company's Form 16?
Mahesh Padmanabhan answers, We would strongly discourage you from doing this. The reason being with the commencement of OLTAS (online tax accounting system) transactions are being tracked and monitored by the tax department efficiently and by not declaring certain income, you run the risk of being called for a scrutiny by the department.
pintu asked, What is the new ITR? How can we fill this for Form16?
Mahesh Padmanabhan answers, In case of individuals who have income only from salary and/ or interest, they have to use ITR 1 that more or less is simple and captures the Form 16 details. Alternately, you could use the form 2D or Saral for the current year.
Akilesh asked, If I have taken a joint housing loan along with my wife could we both claim for the principal as well as the interest? If yes can you please tell me which form I need to fill up?
Mahesh Padmanabhan answers, In case your wife is funding the repayment in some proportion, then definitely you both can claim the deductions in that proportion. As regards the form of returns that you could use, it depends on the heads of income you have.
Apparently, in case you have salary income and no business/ profession income, then you could use ITR 2 or for the current year use Saral/ Form 2D.
Sanjay asked, Sir, two questions on Form ITR-2, (1) Schedule AIR, Code 003 - Is the Rs 2 lakhs limit here for aquiring a single mutual fund's units OR is it that if the consolidated purchase of all mutual funds in a year exceeds Rs 2 lakhs that I have to mention here?
(2) Schedule SI. My employer is an MNC with stocks listed in US. I have received stock awards without paying any money. These were allotted as performance incentive awards. When I sell those stocks after a lock in period of one year or more, what section code in Schedule SI does it fall into & what tax rate is applicable?
Mahesh Padmanabhan answers, The AIR code 003 limit is for all MF units purchased by you during the year in excess of Rs 2 lakhs on a consolidated basis. As this is an asset that is covered by regular short-term asset capital gains rate, it needs to be covered under Schedule CG.
kavyesh asked, When will the new forms be available? Can we file using old Saral form for year 2006-07?
Mahesh Padmanabhan answers, The new forms are already available on the income tax website and, yes, you can use the old Saral/ 2D form in the current year.
manish asked, I recently received my Form 16. But I noticed that the PAN number mentioned on Form 16 is wrong. I have notified the same to the company and they are going to provide me with another Form 16 with the correct PAN number.
What worries me is the TDS that company has deducted in the last financial year & deposited with the IT department. Is it not necessary to mention PAN number while depositing TDS with the government? What I fear is that the TDS amount might have been deposited with the wrong PAN number? What should I do in this case?
Mahesh Padmanabhan answers, You are absolutely right in your thought of the usage of PAN while depositing the TDS. The quarterly TDS returns include the deductee's PAN for completing the OLTAS (Online Tax Accounting System). However, there would be initial hiccups in this system and hence it is better if you file the revised Form 16 along with the tax return to ensure that you get the credit for the tax deducted from your income.
BUNTY asked, Please tell me if I have a PAN card on my wife's name it is mandatory to fill return if her income does not exceed even Rs one lakh per annum?
Mahesh Padmanabhan answers, No, in case the taxable income before chapter VIA deduction (eg Section 80C deduction) is less than Rs 1,35,000 then you need not file her return.
Part II -- Tomorrow
Mahesh Padmanabhan is principal advisor -- direct taxes group, RelaxWithTax Consultants Pvt Ltd, a Mumbai-based personal taxation and finance solutions provider.
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