1. Who is liable to file the income-tax return ?

When the total income from all sources of income of any person exceeds the maximum amount which is not chargeable to income-tax in any previous year ending on 31st March then that person is liable to file the Income Tax Return.

Section 139(1) of the Income-tax Act has been amended w.e.f. AY 97-98 with a view to bring larger number of persons in the tax net. In order to increase the tax-base now any person who satisfies any one of the six conditions viz. is owner of a vehicle, or, occupies specified floor area of an immovable property or incurs expenditure for himself or any other person on foreign-travel or subscribes to a telephone or Credit Card or is a Club member, then he is required to file a return.

In the case of an assesses earning income from Salary primarily, the due date for filing the Income Tax return is 30th June of the assessment year. For example, the due date for A. Y. 2002-2003 would be 30 th June 2002.

The assesses enjoying salary income, and whose total income does not include income under the head 'Profits and Gains of Business or Professional has to file his income-tax Return in Form No. 3. He can also file the Return in Form No. 2A if his net taxable income is Rs.2.0 lakhs or less and if following conditions are satisfied :-

• There is no income from business or profession
• There is no brought forward or carried forward loss/allowance under any head of income except from house property.

The various heads of income are:
a) Salaries;

b) Income from House Property;

c) Profits & Gains of Business or Profession;

d) Capital Gains, and

e) Income from other sources.

While computing income from the above mentioned different heads, the procedure is :-

First, the taxable income from each source is to be computed under each head of income by allowing deductions, and then they are aggregated. For example, in the case of an assesses deriving income from salary, house property, and Interest income from Fixed Deposit in a Bank, firstly, the taxable income under the head 'salaries', then 'Income from House Property, and lastly the taxable income under the head 'Income from other sources' for Bank interest etc. will be computed.

Thereafter, all the three incomes under the three heads would be aggregated. From this amount, certain eligible deductions would then be deducted to arrive at the net taxable income on which tax is chargeable.

6 How to pay the tax under the income tax act ?

The employer or his representative making payment to an assesses earning income from 'salary' is under obligation to deduct, certain amount of 'tax, from such payment(s) made during the financial year. Such deduction from the payment is called 'Tax Deducted at Source' i.e. TDS. The person making this TDS is obliged to pay such tax to Central Government within the prescribed time limits.

This payment of TDS to the Central Government is treated as payment of tax on behalf of the assesses.

Where the assessee has defaulted in timely furnishing of his return of income or where he has to pay advance tax, then penal interest is chargeable for Non/Late filing of return or Non-payment/short payment/deferment in payment of such advance tax.

INTEREST U/8. 234-A FOR LATE OR NON-FURNISHING OF INCOME TAX RETURN : For defaults in furnishing 'Return of income': Simple interest @ 1.25% for every month or part of a month from the due date of filing of the return to the date of furnishing of the return. The interest is calculated on the amount of the tax on the total assessed income as determined under sub­section (1) of section 143 or on regular assessment u/s 143(3) as reduced by the Advance Tax, if any, paid and any tax deducted or collected at source.