Here are answers to twenty questions that crop up frequently in the taxpayer's mind:
1. Heard of New Year. What are financial year, previous year and assessment year?
A financial year (FY) is a period of 12 months commencing on 1 April of a year and ending on 31 March the next year. An assessment year is the year immediately following an FY.
For the purpose of calculating income tax, FY is the period during which the income has been earned. The income earned in a FY is assessed in the following year, that is, the assessment year.
For example, income earned in FY 2007-08 (1 April 2007 to 31 March 2008) will be assessed for tax in the year 2008-09. The year preceding the assessment year is the previous year.
2. What if I have not received my Form 16?
Employers are supposed to hand over Form 16 within 30 days of the end of a financial year, that is, by 30 April. Ask your employer to issue Form 16 immediately so that you don't miss the 31 July deadline for filing return for salaried employees.
If you think that your employer might not issue the form in time, you can write a registered letter to him on the issue and send a copy of this to your assessing officer. The employer can be penalised for not issuing the form in time.
If no tax was deducted at source, you can ask your employer for a salary certificate on his letterhead stating your salary during the financial year. This certificate can be used to file a return.
3. Can I use my investment in ELSS this year to reduce last year’s tax liability?
No. But if you had not claimed any deductions in your previous year’s return, you may file a revised return to claim a refund, if eligible. However, fresh investments would not be eligible for deductions from last year's income.
Why do I need to file income tax returns? Read on....
Image: Taxpayers fill their income tax returns. The deadline for filing taxes is July 31. | Photograph: Manpreet Romana/AFP/Getty Images
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