Preparation and Filing of Income Tax Returns

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Preparation and Filing of Income Tax Returns

A PROJECT REPORT

Submitted by

Preksha Shetty

in partial fulfillment for the award of the degree

of

Post Graduate Diploma in Management Studies

Under the Guidance of

Prof. N. Krishnamurthy

THAKUR INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH
KANDIVILI
MUMBAI

Table of Contents
Chapter 1 INTRODUCTION:5
Chapter 2 CURRENT SENARIO:10
A.Income from Salary10
B.Income from House Property11
1.Computation of income from Let Out Property11
2.Computation of income from Self Occupied Property12
C.Income from Capital Gains13
D.Income from Business15
E.Income from Other Sources16
Chapter 3 RATES OF INCOME TAX:17
A.Income tax slabs 2011-2012 for General tax payers17
B.Income tax slabs 2011-2012 for Women17
C.Income tax slabs 2011-2012 for Senior citizen (Aged 60 years but less than 80 years)17
D.Income tax slabs 2011-2012 for Very Senior citizen (Above 80 years)18 Chapter 4 PROCEDURE FOR FILING AN ITR19
Chapter 5 TYPES OF INCOME TAX RETURN20
A.For Individual And HUF20
B.For Firms, AOPs and BOIs21
C.For Companies21
D.For Trusts21
E.Acknowledgement22
Chapter 6 BASIC INSTRUCTION FOR FILING OF ITR’S23
A.Part A: Personal Information Schedule23
B.Part B: Total Income24
C.Part C: Tax Liability on Total Income25
D.Schedule Salary:26
E.Schedule House Property:26
F. Schedule Capital Gains:27
G.Schedule Business or Profession28
H.Schedule DPM, DOA, DCG and DEP29
I. Schedules CYLA, BFLA, CFL30
J. Schedule SI (Special Income) & Schedule EI (Exempt Income):31
K.Schedule TDS and TCS31
Chapter 7 COMMON ERROR NOTICED IN E - FILED RECTIFICATION32 Chapter 8 IMPACT OF ERRORS MADE WHILE FILING RETURNS:33
Chapter 9 KEY RULES TO ENSURE TROUBLE FREE PROCESSING:34
Chapter 10 RECOMMENDATION:35
Chapter 11 ANNEXURE:37

EXECUTIVE SUMMARY:

The government of India imposes an income tax on taxable income of individuals, Hindu Undivided Families (HUFs), companies, firms, co-operative societies and trusts (identified as body of individuals and association of persons) and any other artificial person. Levy of tax is separate on each of the persons. The levy is governed by the Indian Income Tax Act, 1961. The Indian Income Tax Department is governed by the Central Board for Direct Taxes (CBDT) and is part of the Department of Revenue under the Ministry of Finance, Govt. of India.

As per Income Tax Act 1961, Every Company and every firm is compulsorily required to file income-tax returns every year. These law of filing return is applicable to all persons, whether they are resident or non-resident.

OBJECTIVE OF THE STUDY:

1. To understand the process and procedure of computation of income tax return

METHODOLOGY:

1. Two months practical experience by means of an internship.

2. Secondary data from Income Tax India website and CA Journals.

Chapter 1 INTRODUCTION:

History of Taxation post 1922

1. Preliminary :
The rapid changes in administration of direct taxes, during the last decades, reflect the history of socio-economic thinking in India. From 1922 to the present day changes in direct tax laws have been so rapid that except in the bare outlines, the traces of the I.T. Act, 1922 can hardly be seen in the 1961 Act as it stands amended to date. It was but natural, in these circumstances that the set up of the department should not only expand but undergo structural changes as well.

2. Changes in administrative set up since the inception of the department: The organisational history of the Income-tax Department starts in the year 1922. The Income-tax Act, 1922, gave, for the first time, a specific nomenclature to various Income-tax authorities. The foundation of a proper system of administration was thus laid. In 1924, Central Board of Revenue Act constituted the Board as a statutory...
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