Income Tax Return season

Finally ITR season is once again back and most of you must have filled the return by now. Though I never understood why government need this process when they boast of having a PAN card for all your financial transaction with government. But a process is a process and by virtue of being a process, it at times can be slowing barrier. Still, as we all live by law of land, this is a mandatory process for us all to furnish.

One strange thing I observed with online filing of return is that, you still need to waste paper and whats more, pay stamp ticket for dispatching ACK form to bangalore. Whoops.. thats crazy.. Are they really promoting e-filing or discouraging individuals? One possible reason I could think for this nonsense looking process is that they require physical signature to establish a proof later, if needed, that its YOU who filled return.

Donot make mistake of filling wrong ITR form. Its as wrong as writing an examination for class XIII when you were supposed to appear in IX. Few tips on choosing correct ITR for people in s/w community.

Which ITR to FILL?

1. Only Salary/Pension/FamilyPension and Bank interest: ITR1

2. Salary/Pension/FamilyPension, Bank interest, Stock delivery gains(capital gains) and House property (loan rebate also) : ITR 2

3. Salary, Bank interest, stock intraday gains, delivery gains, house loan : ITR 4 (MUST)

ITR1 is not for you if:

You are filing on behalf of a Hindu Undivided Family (HUF)

You have sold shares / mutual funds in the past year (FY 07-08)

You have sold house / land in the past year (FY 07-08)

You have paid EMI for your house to repay your home loan

You have rented out your house

You have income from your business or profession

ITR2 is not for you if:

You have income from your business or profession [stock intraday trading, delivatives (futures options)]

ITR4 is not for you if:

You or your HUF do not have a proprietary business

Donot be surprised, when you buy and sell shares on same day, it is considered speculative gain/loss and not short term capital gain. So, ITR4 is a must for all those who indulge in intraday trades.

What if you have made only losses? You might question, I have only losses, why should i fill itr4. Well, legally it can go against you as IT officials might claim that you tried to hide informations and doing something incorrect.

Donot be afraid of ITR 4, it only looks big. if you have made only losses, you can still show them in ITR and get it rebated if you gain in future years.

By the way, in case you have not finished the ITR and need help in furnishing it, you can contact me at prasant.agarwal@gmail.com and I would be glad to help you. I encourage e-filing free of cost (only stamp and envelope cost for a post to bangalore) at https://incometaxindiaefiling.gov.in/