I bought shares worth Rs1.25 lakh last year. Do I have to disclose that and other transactions?
Certain disclosures are mandatory while filing an income-tax return. Among these are investments above a specified amount in bank deposits, mutual funds, shares and property in the financial year for which the return is being filed, 2007-08 in this case. The cut-off amount of investment from where disclosure should be made is: Rs1 lakh or more for shares, Rs2 lakh for credit card payments, up to Rs10 lakh for deposits in one bank during the year, Rs2 lakh for mutual funds, Rs5 lakh or more for bonds or debentures issued by a company, Rs5 lakh or more for RBI bonds and Rs30 lakh or more for the purchase, or from the sale, of immovable property.
I was in two jobs. How should I file the return?
The aggregated income from both your employers will be considered while calculating your tax. Ideally, both companies should give you Form 16 for salary earned during the relevant period. Try to get a salary certificate from your previous employer if you cannot get Form 16. Submit this estimate and a declaration in Form 12B to your current employer, who will then incorporate these details in the Form 16 that he issues.
Can I use my investment in ELSS (equity-linked savings scheme) this year to reduce last year’s tax liability?
No. But if you had not claimed any deductions in the previous year’s return, you may file a revised return to claim a refund. Fresh investments will not be eligible for deductions from last year’s income.
Taxes get deducted from my salary every month. Do I need to file an income-tax return?
Yes. Filing is compulsory for every person whose gross total income, that is, the income under the five heads before allowing for any deduction such as insurance premium, exceeds the basic exemption limit. For financial year 2007-08 (assessment year 2008-09), this exemption limit was Rs1.45 lakh for women below the age of 65, Rs1.95 lakh for persons above 65, and Rs1.10 lakh for any other individual. Everyone falling in the tax bracket should file a return, even if his tax liabilities have been taken care of by the employer through tax deducted at source (TDS). Persons whose salaries have been subjected to TDS are also required to file a return because they may have earned from sources other than salary.
I incurred losses last year while trading in shares. Can gains from other sources set these off?
Short-term capital losses can be set off against long-term (LTCG) or short-term capital gains (STCG), but long-term capital losses can only be set off against LTCG. Loss from trading in shares cannot, however, be set off against gains from “other incomes”. A loss that is not wholly set off in the financial year in which it is incurred can be carried forward to eight succeeding assessment years.
What if I miss the 31 July deadline?