Get it over and done with

The income tax department categorises incomes under five heads income from salary,business,capital gains,house property and other sources. Therefore,while declaring income earned for a particular year,you have to declare all sources of income,like interest earned from savings bank account,loss or gain made from sale of equity,house,etc. Although income from agricultural activity,dividend from equity stocks,and long-term capital gains made on stock transactions are not taxed,you have to state them and then seek exemption.

Who must file?

If your income exceeds the exemption limit set by the government,you have to file tax. However,you are excused if your salary is below the basic exemption limit.

Categories like homemakers or minors,who have some source of income,are also taxed depending on what their source of income is. If you are the source of income for them,then their income will be clubbed with yours and taxed. However,if minors or homemakers have themselves earned the money,then their earnings will be taxed in their hands.

Revised tax slabs

For financial year 2010,the government has further raised the basic exemption limits see table for details. In case of male tax payers,the basic exemption limit has been raised to Rs 1,60,000; for female tax payers it is now Rs 1,90,000; and for senior citizens it has gone up to Rs 2,40,000 for this financial year.

Ways to file tax

Tax returns can be filed in two ways: off-line the traditional way and online.

Off-line: This is the traditional simple method. You get the form as per your income-type,fill it and deposit at the income tax office. Salaried people usually require ITR 1 to file the tax returns. All you need is Form 16 from your employer. Key in the details from Form 16 in ITR1. However,in case there are other sources of income as well,for instance,income from capital gains,from sale of house property and other sources,then you have to fill all these details in ITR2.

In case you run your own business,you have to file your return in ITR 4.

In case you have more than one source of income,it is better to rope in a tax expert or a chartered accountant to help you fill the form. This minimises the chances of error and saves you a lot of time and energy.

Although the present tax forms do not require support documents,it is advisable to carry either the photocopies or the originals with you to the income tax office while submitting the ITR forms. These come in handy in case the officers ask for some proof to validate what you have filed.

You can either download the tax return forms from http://www.incometaxindia.gov.in/download_all.asp or get them at the office of the income tax department.

Online: If you are wary of long queues and are pressed for time,e-filing is the solution for you. While this process is compulsory for companies,it is optional for salaried individuals. With the latest circular,the income tax department has made this process even more convenient.

Various websites allow you to file returns online for a small charge. Some of the popular private ones are: taxspanner.com and taxsmile.com. These websites charge you a nominal fee for their services. Various packages are available in these websites,whose cost ranges from Rs 40 to Rs 500. The basic ones just allow you to key in the information,while the higher end ones also assist you in filling the application.

Salaried people just have to key in the information from Form 16 to the form available on the website. This will automatically generate an electronic return usually in XML format and a PDF file of the ITR form. Now,you can download this ITR form and submit it at the ITO. Or else,these companies upload the XML file on http://www.incometaxindiaefiling.gov.in and send you an acknowledgement ITR-V through mail.

All you have to do now is mail this form to the IT office in Bangalore. Since the acknowledgement letter contains a bar code,you are advised not to fold this and post it in A4 size envelope to Income Tax Department,CPC,Post Bag No-1,Electronic City Post Office,Bangalore-560100,Karnataka. This should be done within thirty days after the date of transmitting the data electronically.

Points to remember

One,the PAN number is a compulsory entry in the tax return form. An incorrect PAN attracts a penalty of Rs 10,000.

Two,in case you have switched jobs in a fiscal year,you should get Form 16 from both your previous and current employer and declare the total salary earned.

Three,in case of refunds,do mention the MICR code and bank account number.

Four,disclose all sources of income,for instance,interest earned from your savings bank account,equities,house,etc.

While the above is a birds eye view of the whole process,do take the help of your financial advisor or a chartered accountant in filing returns to minimise the chances of error. The last date is July 31,so hurry. amp;149;

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