MYTHS & REALITY about TAXES (In INDIA)

Myth: Tax Deducted cannot be recovered?

Reality: This is a myth and the most common. The reality is that if your income is below the taxable limit, then you can claim a Refund by filing a return.

Myth :Tax Filing is very tedious and needs a lot of time, money and expertise?

Reality: Tax filing is a straight forward simple job. It can be done investing a limited amount of time and needs very limited expertise. The IT dept has also appointed tax agents who can do this job

Myth : Having a Pan Card makes it compulsory to file returns?

Reality: This is not true. Having a pan card does not make it compulsory to file returns.  If your income is taxable in a particular year then you have to file returns. However, if your income is below the taxable limit you can still have a Pan card and not file tax returns. PAN card can be used as a Photo Identity proof and when required for filing INCOME TAX RETURNS.

Myth: IF tax is deducted at source no returns are required to be filed.

Reality: This is only true if your entire tax liability is deducted at source and you don’t have any other source of income. If you have any other taxable source of income then it is mandatory to file your returns and pay your taxes.

Myth: There is a deadline to file my Return and the RETURN once file, cannot be revised:

Reality: The last date of filing returns is till 31^st July each year. However, if you miss the deadline you can still file your return. Belated Return- The last date of filing the returns is 31^st July but if you miss the deadline you can file a late return of 31^st March 2012. If there is a tax liability then interest will be charged at 1% per month. The income tax department may impose a penalty of Rs.5000/- for late filing of returns.

Revised Return-If you find any errors or omissions in your return you can always revise your return at a later date. The same also can be filed till March 31 ,2012.  If any errors are noted after the return is filed, it is best to get the same corrected with the income tax department to avoid any future consequences

Myth: I can invest only in LIC to save TAX?

Reality: Section 80C has various options which shall quality as a TAX deduction. However, it is a common myth that an LIC can be only bought to save taxes. Please see below the options available to save taxes.