Introduction and Overview
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Introduction
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Under the Income-tax Act,
1961 and the Wealth-tax Act, 1957, the charge is on annual basis.
Assessment is the determination of the total income/net wealth and the tax
liability thereon. The proceedings for assessment of income/wealth
commence with the filing of the return of income/wealth. Every year an
assessee is required to file his return of income and/or wealth as the
case may be, in accordance with the law and procedure applicable for that
year and within the prescribed time. At present there are two ‘due dates’
for filing of return, viz., 31st July and 31st October. The tax liability
is determined with reference to the assessment year in accordance with the
law applicable for that year.
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Generally, assessment is
understood to be the determination of income/wealth and the tax liability,
by the Assessing Officer. There is another part of the assessment called
the self-assessment. In self-assessment, the assessee himself has to
determine the income/wealth and the tax liability. This is done in the
return of income.
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The tax liability has to
be determined in accordance with the law as applicable for the relevant
assessment year. An assessee is obliged to pay the tax exactly in
accordance with law and nothing more. Short payment of tax can lead to
liability to interest or penal consequences. Excess payment of tax may
result in some loss to that assessee though he would be entitled to
interest under the provisions. This necessitates that the assessees and
their tax consultants are upto date with the law and in particular are
required to know the correct position in law with reference to the
relevant assessment year at the time of filing of return.
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The provisions of tax
laws are amended very often and different amendments are made operative
from different dates and different assessment years. Every year the
Finance Act carries a number of amendments and in addition there are
amendments made in the course of the year. Generally, the amendments are
prospective in nature and are made applicable for the subsequent previous
year after the Finance Bill. Some of the amendments are also made
applicable for the ongoing year; i.e., the assessment year that is to
follow. As for example, take the case of A.Y. 2005-06. Generally, the
amendments made by the Finance Bill, 2004 are made operative for the A.Y.
2005-06 the corresponding previous year being from 1-4-2004 to 31-3-2005.
However, some of the amendments by the Finance Bill, 2005 will also be
applicable for the A.Y. 2005-06. Some of the amendments of the earlier
Finance Bills also may be made applicable from the A.Y. 2005-06.
Therefore, to find out the new provisions applicable for an assessment
year primarily one may have to look into the two Finance Acts and also the
other amending Acts.
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Overview
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The Object of the Special
Story is to briefly review the law and procedure concerning filing of the
return, with special reference to the various amendments which made
operative for and from the A. Y. 2005-06. The next five articles are
concerning income tax and the last article is on wealth tax.
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The next article, i.e.
the first article on income tax by Shri Chandravijay Shah, on “Obligation
to File Return”, covers the provisions concerning the obligation to file
return and also the consequences of failure in terms of interest and
penalty. The article covers the obligation to file return u/ss. 139(1),
139(3) and 139(4C); the forms of returns and section 139(9) concerning
defective return.
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In the second article, on
“Salary and House Property Income” Shri Hiten Shah has covered the
provisions concerning salary and house property income with special
reference to sections 10(10C) and 89(1) in respect of voluntary
retirement.
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In the third article, on
“Business Income”, Shri Haresh Kataria has dealt with recent amendments
with reference to business income and in particular the provisions of
sections 40(a), 32, 71, 80-IA, 80-IB and Chapter XII-G.
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In the fourth article, on
“Capital Gains and Other Sources”, Shri M. K. Mehendale has covered the
important provisions including section 50C concerning capital gain on
transfer of immovable properties. The recent provision u/s.56(2)(v)
deeming a monitory gift to be income has also been considered.
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In the fifth article, on
“Exemptions, Deductions and Rebates” Ms Toral Mathuria has exhaustively
dealt with the relevant provisions of section 10, and sections 80DD,
80-IA, 80-IB, 80U, 88D and 88E.
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In the next article, on
“Annual Information Return”, Shri Anil Sathe has exhaustively dealt with
the provisions of the new section 285BA concerning the Annual Information
Return with the relevant rules and the provisions for penalty.
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In the last article, on
“Wealth Tax”, Shri Chandrashekhar Vaze has briefly touched upon all the
important provisions concerning the scope, liability, important
definitions and other important provisions on wealth tax.
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I hope that the readers
will find the Special Story convenient and useful to enable themselves and
their office properly equipped to prepare and file the returns of their
clients for the A. Y. 2005-06.
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