What is Form 16?

This form carries all the required details that help the employee in filing their tax returns, the form has various components such as Salary Income components of the employee. Every employer should provide their employees with the Form 16 who fall under the tax brackets set up the Finance Ministry of the Government of India. Form 16 has 2 parts he Part A of the Form 16 contains the TAN of the employer and PAN of the employer and the employee. The addresses of both the employee and employer.

This will contains all details of the pay-outs from the employer and employee during the current financial assessment year.

This part of the Form 16 also contains the TDS filed by the employer, the taxes deducted from your income and paid to the government every quarter. This also contains a monthly statement of the same. The Part B of the Form 16 contains the consolidated details of the salaries paid to the employee during the financial assessment year. The salary must be broken down, with details of deductions made by the employee under section 80C

The deductions that can be made under this section is EPF, NSC, Life insurance premiums, PPF, etc. If in one financial assessment year employee has changed jobs then the employee needs to be provided Form 16 of both companies.

What is Income tax return?

It is simply a form where taxpayers declare their taxable income, deductions, and tax payments. Procedure of filing income form is referred to as income tax Return filing.

Everyone who earns income above a certain amount is subject to income tax. Your income could be from salary, interest income from savings, income from mutual funds, sale of property or business or professional income. Income tax rates are pre-decided at the start of the year in the Union Budget (in the Parliament of India).

The tax paid or deducted on these incomes is called the income tax. Income tax return form ranges from ITR 1 to ITR 7 which is predefined for different types of income. Some income tax return forms are detailed than the others, and may need additional disclosures such balance sheet and profit and loss statement information.

Why should you File?

Filing income tax return doesn’t only make you a responsible citizen but it also ensures smooth governance. Also, it saves you the gargantuan hassles if you are ever required to furnish the return under a show-cause notice from the I-T department.

Avoidance of penalty

Under section 234F of the Income-Tax Act, if a person required to furnish a return of income by July 31 fails to do so, then a fee of Rs 5000 shall be levied if the return is furnished before 31st December. However, the fee shall be Rs 10,000 if it is filed after 31st December. Moreover, if the total income of the person doesn’t exceed Rs 5 lakh, then fee payable shall not exceed Rs 1000.

Advantages in the processing of a loan

Banks and other non-banking financial institutions require your income tax returns to process home, educational and other types of loans. It is also mandatory to have income tax returns for the processing of any visa. Also, some credit card companies demand proof of tax returns before issuing a card.

Registration of immovable property

Some states require your income-tax return of the last three years for registration of immovable property. Also, a legal sanction to income whether taxable or not helps you pad up subsequently to account for the wealth or the property owned.

Filing income tax return doesn’t only make you a responsible citizen but it also ensures smooth governance. Also, it saves you the gargantuan hassles if you are ever required to furnish the return under a show-cause notice from the I-T department.

Carrying forward capital losses

If you have incurred capital losses, the Income Tax Act allows you to carry forward losses for eight consecutive years, and offset it against future gains and income. However, you need to have filed an ITR every year, without any break, to avail of this benefit. Even if your income is not taxable, you may have incurred losses that need to be carried forward. So it’s mandatory for you to file for return in the year you have incurred losses to carry them forward.

For Claiming Tax Refunds

Even if your income is under the taxable limit, you may have paid taxes on it . An individual can file refunds to get this excess tax paid via TDS, or self-assessment, in the relevant financial year. Getting a refund of your taxes feels like getting a paycheck credited. If you don’t file your returns, you essentially let go of a possible refund.

Getting a visa

If you are planning to immigrate to another country or seeking a job opportunity abroad, you must have your ITRs for the recent years ready. Most embassies, especially the US and UK, ask for copies of ITRs to process your visa application.

What if I do not file?

Interest Liability to be paid for delay on tax amount:

When income tax return is not filed within the due date, interest at the prescribed rates per month or part of the month is levied up to the date of filing the ITR. The said interest is payable on tax payable after deducting the TDS (tax deducted at source), TCS (tax collected at source), advance tax and other reliefs/ tax credits available under the law, is collected by receiver/payee/seller.

No carry forward of losses:

If income tax return is not filed within the due date, the taxpayer will not be allowed to carry forward any loss under the head "profits and gains of business or profession" or "capital gains". However, unabsorbed depreciation and loss under the head "income from house property" shall be allowed to be carried forward, experts said.

Reduced time for revising your income tax returns:

Earlier, taxpayers had a 2-year long window to revise and resubmit an erroneous ITR, which has now been decreased to one year from the end of the financial year. "Therefore, the earlier you file, the longer would be the window available with you for revising your returns to rectify errors if any,

Penalty:

A three-tier fee system has been introduced for not filing income tax return within due date. If return is filed beyond due date but before December 31, then fees payable will be Rs. 5,000 whereas in other cases it will be Rs. 10,000. However, in case of taxpayers whose total income does not exceed Rs. 5,00,000, the fees payable shall be restricted to Rs. 1,000.

When Should I File nil return?

A nil income tax return is filed to show the Income Tax Department that you fall below the taxable income and therefore did not pay taxes during the year.it will prove as an essential documents to establish income proof even though it is below taxable limit.

What is GST's impact?

GST, the greatest tax reform since Independence is here. As are the challenges for businesses across the country. Like everything else, all is not smooth sailing for GST and there are some obvious challenges for businesses and end consumers which we will discuss in detail here.

• Change in Business Software
• GST Compliance
• Increase in Operating Costs
• Policy Change during the Middle of the Year
• Higher Tax Burden for Manufacturing SMEs
• No Clarity on Tax Holidays
• Disruption to Business

What are the benefits of GST? What are the challenges that lay ahead?

GST aims to overhaul the indirect taxation of the world’s 7th largest economy regarding GDP. A significant advantage of GST will be that it will help in mitigating the cascading effect of taxation as should be for any indirect tax system. Moreover, it will reduce fraud and improve administrative efficiency of the tax authorities. GST will also help in the creation of a unified national market that will help in ease of doing business as the firm houses do not have to make different tax-related cost proposal for every state. The primary concern about GST will be as India is a very vast and diverse land, so it will not be easy in the implementation of a uniform tax for the entire country. A tax that suits Kerala might not be appropriate for Bihar or for that matter Arunachal Pradesh. The linguistic and cultural differences might come in way of creating a unified national market.

What are the types of GST?

GST will be divided into three components the Central Goods and Services Tax(CGST), State Goods and Services Tax(SGST), Inter State GST. The CGST will subsume the Central indirect taxes like the service tax, excise duty, additional customs duty, additional special excise duty whereas SGST will subsume the State indirect taxes like VAT, entertainment tax, octroi and others. The CGST will be levied by the Central Govt whereas the SGST will be charged by the state government. In the case of an interstate sales transactions, IGST will be collected by the Central Government. GST will allow the Input tax credit for the taxes paid on the purchase of goods and services during a commercial activity and input tax credit of CGST and SGST will be provided by the respective governments.

How do I pay GST online?

After making all adjustment and taking Input Tax Credit (ITC) available to a tax payer, a tax payer is required to pay any balance GST liability online.

Here is a step-by-step procedure that will help you make GST payment with ease.

Step 1 – Login to the GST Portal. Enter your username, password, and captcha code.

Step 2 – Once you log in go to Services > Payments > Create Challan

Step 3- Enter the amounts and select the method of payment i.e. e-payment, over the counter or NEFT/RTGS. Click on Generate Challan once all the details have been filled in. pay gst online so that your transactions will be transacted and you will have a proof of payment.

There are 3 methods of payment here:

• Internet banking and debit/credit cards of authorized banks
• Over the counter payment through authorized banks
• Payment through NEFT/RTGS from any bank.

However, there is a limit of Rs. 10,000/- per challan, for over the counter payment through authorized banks.

Step 4 – A summary page will appear containing all the details of the challan. Here select the method of payment by choosing the bank through which payment will be made. Click on Make Payment. This will take you to the net banking account of the bank specified by you.

What are the types of Returns that can be filed under GST?

A return is a statement which is filed by the taxpayer as per the law with the tax administrative authorities. GST return can be filed both online as well as offline. Under this new tax reform, a registered taxpayer shall file GST return at GST common portal. There is common e-return for Central Goods and Service Tax (CGST), State Goods and Service Tax (SGST), Integrated Goods and service Tax (IGST) and Additional tax. Under this reform, a normal individual is required to furnish three monthly returns and one annual return.

Under GST:

GSTR-1 is filed by the registered taxable person. It includes details of all outward supplies of goods and services during the month which have been submitted. Due date for filing this return is 10th of the subsequent month.

GSTR-2 is filed by the registered taxable recipient which includes the details of all input supplies and details about claiming tax credit by 15th of the subsequent month.

GSTR-3 is filed by a registered taxable person in which the details regarding the monthly return on the basis of finalization of outward and input supplies along with the amount of Tax payable is included.

There is a common mode for filing all these returns. These monthly returns are filed by a portal managed by the Goods and Service Network (GSTN). Monthly returns are filed by Regular Foreign Non-Residents and casual taxpayers, whereas quarterly returns are filed by the composite taxpayers. Annual return is filed by 31st December of every next financial year.