July 7th, 2013 by bemoneyaware
“Everything about filling income tax return is taxing “, replied my colleague, “I just don’t know what information is required and why. I just hand over to my tax consultant, sign where he says and done with and at 200 Rs it is cheap also “. This was in response to the mail of our company arranging the tax consultant who will file income tax returns with just Form 16 and PAN card copy. When others also nodded and agreed with him. I was thinking “WHY is that a person with post graduate engineering background, who can solve complex algorithms with ease was finding filling of income tax return difficult?” I had faced the questions few years ago when I was forced to deal
with income tax returns and the answer I realized was because
We do not allow people to drive without a license test but allow them to enter complex financial world without much financial education.
So this post is dedicated to all such people. Picture below shows example of two different incomes and their calculation (Ref EconomicTimes 1 Mar 2013)
Find out types of income earned
As the name income tax suggests it is tax on income.
Time period for earning the income is between 1 Apr to 31 Mar of next year. For example for the Income earned between 1 Apr 2012 to 31 Mar 2013 will be considered for filing returns this year called as Financial Year(FY) 2012-13 or Assessment Year (AY) 2013-14.