- May 2014
- December 2013
Ruby Jacob, 06 Mar 2013
If the Finance Minister has his way, from 1 June 2013, your Income Tax Returns will be considered invalid unless you have cleared all your tax dues for the previous year by paying self assessment tax by due date.
The Finance Bill tabled for 2013-14 proposes to amend I-T laws to consider tax returns 'defective' unless you have made all your income tax payments, including interest on delayed advance tax by due date of filing the Returns.
It has come to the I-T guys' attention that lots of people have been religiously filing returns but have not bothered to cough up self assessment tax.
Amendment to section 139 of Income Tax Act
So far I-T laws only had provision to consider an I-T Return invalid if the Income Tax assessing officer notified an irregularity in an assessee's return in terms of not declaring tax payable based on Return, not attaching proofs where required, etc and the assessee did not correct the defect in 15 days.
But now the Bill seeks to add a provision to count a Return defective if self-assessment tax has not been paid on or before due date of filing Returns.
Although this might not frighten you as an average salaried tax payer since your tax liability might be small compared to HNIs, corporate and other classes of taxpayers, you better be on guard.
Self assessment tax
Self assessment tax is paid on any income tax dues from the previous year as assessed by you. This can be assessed accurately only after the end of the financial year when you accurately know how much your income was. The normal way of paying income tax is through Advance tax. It is paid as you earn in the same year. If you miss paying Advance tax on time you can pay it with interest through Self assessment tax.
Self assessment tax can be paid any time before due date of filing tax returns in the assessment year. It can also be paid during filing income tax returns.
You might have never paid any Advance tax if salary and interest is your only source of income. TDS normally applies on them and this takes care of your tax liability. But if you have other sources such as capital gains from mutual funds, shares, house property or business profit etc you are liable to pay Advance tax every quarter if your tax liability is expected to be over Rs 5000 a year.