1. What is Income Tax Return (ITR)?

Income Tax Return is a form in which the assessee (tax payer) reports the details of his/her income and the corresponding tax to the Income tax department.

ITR forms are available in various formats such as ITR 1, ITR 2, etc. Each form applies to different persons with defined nature of income. 

2. Which period should I consider for determining my income and taxes?

In Income tax, Financial Year (FY) is a period of 12 months, which starts on 1st April and ends on 31st March. FY is the year when income is earned and is also the period considered for determining income and taxes.

In few cases, the financial year can also be less than 12 months. Example: In the first year of incorporation of a company, FY starts from the date of incorporation.

3. What is “Assessment year”?

Assessment year (AY) is a period of 12 months (starting April to March) immediately following the Financial Year (FY). 

Example:

• For FY 2021-22 – AY is 2022-23
• For FY 2020-21 – AY is 2021-22
• For FY 2019-20 – AY is 2020-21

Assessment year is when the Income tax return is filed for the corresponding financial year.

4. What is PAN (Permanent Account Number)?

PAN is a unique ID issued by the Income tax department to all tax payers. It is a 10-digit alpha-numeric ID. 

It is the primary key against which the person’s income and tax-related information is associated with. PAN is issued for individuals, firms, companies, trusts, HUF and society.

5. Who should file Income tax return?

• Individuals
• Hindu Undivided Family
• Partnership firms/LLP
• Companies
• Trusts
• Association of Persons
• Body of Individuals

All of the above categories should file ITR if their income exceeds the basic exemption limit.

6. I run an NGO. Should I need to file ITR for the NGO trust?

As mentioned in Qn. 5, all persons including trusts are required to file ITR if their income exceeds the basic exemption limit.

7. What is Form 16?

Form 16 is a TDS certificate issued by employer to employee. It is issued to employees whose salary income is liable to income tax.

It contains details of salary, deductions/allowances and details of other income as submitted by employee to employer, the corresponding tax calculation and the tax deducted by the employer.

8. What is Form 16 A?

Form 16A is a TDS certificate issued for income other than salary. Example: Form 16A is issued by banks for TDS done on bank interest.

If the sum paid by the payer to payee is liable to TDS and TDS is done, Form 16A is issued. Payments covered are Dividend, Interest, Rent, consultancy fees, professional fees, etc.

It has details similar to Form 16, such as details of the deductor/deductee, tax, etc. It is issued every quarter by the payer to the payee.

9. Where can I find the details of TDS/TCS deducted from me?

The details of TDS/TCS can be verified in Form 26AS. It is a statement that contains the following details:

• TDS from all tax deductors
• TCS by all collectors
• Advance tax, self-assessment tax paid, regular assessment tax paid
• Details of Refund received
• GST sales/turnover
• High value transactions such as cash deposits in bank, purchase/sale of shares, MF’s, land purchase

The statement is downloaded from TRACES website. It forms an important document to verify and validate the income and tax details of the tax payers.

10. What is Annual Information Statement?

Similar to Form 26AS, Annual Information Statement contains details of taxpayer such as their income, TDS, TCS, significant financial transaction taken by the individual (such as purchase and sale of shares, MF, huge cash deposits, etc.), GST turnover, etc.

This statement is more detailed compared to Form 26AS. For eg. Savings bank interest is available in AIS, but not in Form 26AS.

This statement gives an option to submit feedback on the details mentioned therein.