Income Tax Returns
Filing income tax is every citizen’s responsibility. The IT department verifies these declarations of income and if any amount has been paid in excess, the department refunds the amount to the assesses bank account. All entities are required to file the taxes on time to avoid penalty.
The form that contains information of income and tax paid of an assessee is called Income Tax Return. The Income Tax Department of India has various forms for it such as ITR 1, ITR 2, ITR 3, ITR 4S, ITR 5, ITR 6 and ITR 7.
The advantages of filing for IT returns are:
Loans: Bank loans like education loans, vehicle loans, personal loans, can be availed easily as they require last three year’s IT returns.
Visa: As Immigration centres scrutinize many documents and IT returns proofs is a mandatory document for visa applicants.
Avoid penalties: Hefty amounts would be charged for non-filing of income tax returns and hence it is always better to file it to avoid legal repercussions.
Who should file income tax return?
Every company, be it Private limited, LLP or partnership irrespective of the income or loss must file IT returns.
Individuals enjoying income from mutual funds, bonds, stocks, fixed deposits, income from interest, house property,etc.
Individuals receiving income from property under charitable trusts, religious trusts or income from voluntary contributions.
Salaried persons whose gross income before deductions under section 80C to 80U exceeding the exemption limit.
All individuals with foreign income, foreign assets, NRI’s and tech professionals on onsite deputation.
Online TDS return is a statement given to the IT department every quarter. It is essential for every deductor to deposit Income Tax and file for TDS return on time.
Dechcept assists and guides you on online TDS return in 3 easy steps:
Information Collection: Our team will set up a seamless process for data collection
Return Preparation: Your return will be prepared as required
Benefits of TDS Return Filing
As per the IT Act of 1961 filing TDS return is mandatory as well as it fetches some benefits to person or company. A few advantages of submitting a return and knowing the refund status are:
1.A steady inflow of income to the government.
2.Facilitates a smooth collection of taxes used for welfare.
3.No burden of paying tax lump sum as the payment is done every three months for the whole year
We prepare the account and file TDS refund on your behalf. From the very first stage of preparing the returns till the last phase of the refund, we act as your consultants.
Dechcept not only does all the paperwork for you, but also makes sure that every government interaction is smooth. Our process is truly transparent and always meets your expectations. We take care of:
Computing your TDS payments
e-filing the TDS return
Adherence to compliance with regulations
Income Tax Audit
What is Tax audit?
There are various kinds of audit being conducted under different laws such as company audit/statutory audit conducted under company law provisions, cost audit, stock audit etc.
Similarly, income tax law also mandates an audit called ‘Tax Audit’. As the name itself suggests, tax audit is an examination or review of accounts of any business or profession carried out by taxpayers from an income tax viewpoint. It makes the process of income computation for filing of return of income easier.
Objectives of tax audit
Tax audit is conducted to achieve the following objectives:
Ensure proper maintenance and correctness of books of accounts and certification of the same by a tax auditor
Reporting observations/discrepancies noted by tax auditor after a methodical examination of the books of account
To report prescribed information such as tax depreciation, compliance of various provisions of income tax law etc.
Who is mandatorily subject to tax audit?
A taxpayer is required to have a tax audit carried out if the sales, turnover or gross receipts of business exceed Rs 1 crore in the financial year. However, a taxpayer may be required to get their accounts audited in certain other circumstances. We have categorised the various circumstances in the tables mentioned below:
NOTE: The threshold limit of Rs 1 crore for a tax audit is proposed to be increased to Rs 5 crore with effect from AY 2021-22 (FY 2020-21) if the taxpayer’s cash receipts are limited to 5% of the gross receipts or turnover, and if the taxpayer’s cash payments are limited to 5% of the aggregate payments.
What constitutes Audit report?
Tax auditor shall furnish his report in a prescribed form which could be either Form 3CA or Form 3CB where:
Form No. 3CA is furnished when a person carrying on business or profession is already mandated to get his accounts audited under any other law.
Form No. 3CB is furnished when a person carrying on business or profession is not required to get his accounts audited under any other law.
In case of either of the aforementioned audit reports, tax auditor must furnish the prescribed particulars in Form No. 3CD, which forms part of audit report.
How and when tax audit report shall be furnished?
The tax auditor shall furnish tax audit report online by using his login details in the capacity of ‘Chartered Accountant’. Taxpayer shall also add CA details in their login portal. Once the tax auditor uploads the audit report, same should either be accepted/rejected by taxpayer in their login portal. If rejected for any reason, all the procedures need to be followed again till the audit report is accepted by the taxpayer.
Penalty of non filing or delay in filing tax audit report
If any taxpayer who is required to get the tax audit done but fails to do so, the least of the following may be levied as a penalty:
0.5% of the total sales, turnover or gross receipts or;
Income Tax Notice
What to do when you receive an Income Tax notice?
First and foremost – Keep calm and read the communication you received end to end. Work around the legalese and understand what exactly are they trying to tell you.
Check the basics
Is it really your name on the notice?
Is your PAN number mentioned correctly?
Which assessment year is it meant for?
Who is the issuing officer? What is their designation?
Is there a document identification number? What is it?
Figure out the discrepancy
The new intimation format has 2 columns. Here’s what it looks like:
If a particular row shows different amounts in these two columns, that is the source of your discrepancy.
When can you expect to hear from the IT department?
1. TDS Amount Error
2. Discrepancy in Return Filed by you
4. Tax Returns Not Filed
5. Investments in the name of spouse
6. High Value Transactions
7. Non-disclosure of assets for wealth tax
8. Random Scrutiny
If you still have queries regarding an IT notice you received or are unsure about the next steps to be taken, feel free to consult the experts at Dechcept.