Income tax: Defective returns must be rectified, fast
March, 19th 2013
As per the recent change in the Budget, if a person files a return of income without payment of self-assessment tax, it shall be treated as defective return. What would be its implication?
When the tax authority considers the return of income tax furnished by the taxpayer is defective, he may intimate the defect to the taxpayer and give him an opportunity to rectify the defect within 15 days. If the taxpayer rectifies the same (i.e. pays tax and interest) within the specified period, then the return is treated as a valid return. Otherwise, return is treated as an invalid return and the provisions of the Income Tax Act shall apply as if the taxpayer had failed to furnish the return.
I currently earn around Rs 14 lakh annually and have other minor income. Am I eligible to avail of deduction of Rs 25,000 by investing in RGESS?
One of the conditions for being eligible to invest in RGESS is that a new retail investor's gross total income should not exceed Rs 10 lakh. The Budget proposes to raise this limit to Rs 12 lakh from FY 2013-14. The term 'gross total income' means the total income computed in accordance with the provisions of this Act, before making any deduction under Chapter VI-A. Thus, if aggregate of net income computed under five heads of income, after giving effect to the provisions for clubbing of income and set off and carry forward of losses but before claiming deduction under Chapter VI-A (Sec 80C, 80D etc), is Rs 12 lakh or less, then you will be eligible to invest in RGESS, subject to fulfillment of other conditions.