Tax returns: The July 31 countdown begins

What happens if you miss the July 31, 2007, deadline for filing your tax returns? Will you be penalised? If yes, how much? Is there a way out?

What if your annual income is not taxable, and you are filing zero returns every year? Can you stop filing returns since your income is not taxable?

Can you still use the old Form 2D to file your tax returns?

In a chat with readers on June 14, Get Ahead tax expert Mahesh Padmanabhan answered these and many more queries related to the deadline for filing tax returns for 2006-07 and the new income tax forms.

tajunnisa asked, Hi, what documents do I need to produce while filing the returns?

Mahesh Padmanabhan answers,  The current ITR formats are to be completed and submitted without any annexures as most of the required information is captured in the ITR format. The TDS details thereafter would be cross referenced by the IT department using OLTAS (Online Tax Accounting System).

ngranga asked, Hi, shall I use the 2D form for this year? Kindly explain the filing sequence for ITR-2. Thank you.

Mahesh Padmanabhan answers, No, you cannot use the form 2D henceforth; you have to use the ITR formats. The form is self-explanatory, but you could use the assistance of a qualified tax practitioner.

temputsav asked, Sir, which is the correct ITR form to be filed for a salaried person? I don't have any other source of income. Is it version one or two?

Mahesh Padmanabhan answers, ITR 1, version 2.

vipul asked, Sir, my query is if a self employed professional misses the deadline of 31st July from filing his IT Returns, is there any penalty levied on him or can he file the Returns by 31st March 2008 as long as he doesn't have to pay any extra income tax?

Mahesh Padmanabhan answers, In case you miss the deadline of July 31, you can file your tax returns before March 31, 2008. If you have still not filed the return before the March 31, 2008 deadline, then you would be levied a penalty of Rs 5,000.

CARahul asked, Sir, in your previous session few days earlier you were saying that Form 2D can be used and I had a different view. In your opinion sir, what's the position now?

Mahesh Padmanabhan answers, You were right with regard to the usage of ITR from the current year. We incorporated an errata in the chat transcripts on getting a confirmation from the IT- PRO. Thanks for the correction. 

srinivasa rao asked, Sir is it possible to file form 2D as the person had signed the form 2D and presently gone to UK?

Mahesh Padmanabhan answers, No, the IT department has stopped accepting returns in Form 2D and will accept the same only in the new format

Sharanam asked, A person's annual income is not taxable as it's lower, and the person is filing zero returns every year. Can that person stop filing returns as the income is not taxable?

Mahesh Padmanabhan answers, Technically, such person would anyway not be required to file a return. However, most people file returns to build up a networth over a period of time that has been declared to the income tax department. 

champak asked, I am earning money online by outsourcing, getting payment online by paypal in US$ and then paypal sends me a cheque in Indian rupees. How can I show these transactions in my income tax return? I am earning in small transactoins like US$ 25 and paypal sends cheques of minimum amount of US$ 150.

Mahesh Padmanabhan answers, Yes, this is an income that needs to be declared in Indian taxes. It would be included under the head income from business and profession.

Vikas Vyas asked, Sir, whether new ITR forms are valid for filing returns of 2005-06 (prevoious years) or should old Saral form needs to be filed.

Mahesh Padmanabhan answers, Yes, for the previous year. For example, for 2005-06, you could file the returns in Saral / Form 2D.