The document discusses key aspects of income tax administration in India, including the requirement for taxpayers to file an annual return of income by November 30 each year. It notes certain income sources that do not require filing, and penalties for failing to file. It also outlines important details like opening a tax file, information to disclose in the return, payment of quarterly tax installments, penalties for late payment, and the assessment process.

1. Income Tax Administration
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Furnishing of Return of Income.
Furnishing of return of income is an important obligation
of a tax payer. “Return of income” is a set of forms sent
by the department of Inland Revenue to every tax payer
to file the same with the department.
Filling of Return of Income
A person liable for income tax is required to send the
return of income to the assessor. The due date for filing
the return of income is on or before 30th
November after
the end of a year assessment.

2. Filling of Return…………….Contd.
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However, an individual whose income for any year of
assessment include solely of one or a combination of the
following sources, is not required to file a return.
a) Dividend on which tax at 10% has been deducted.
a) Interest paid on deposits, Government securities and
corporate bonds on which tax has been deducted by
the payer.
a) Income from employment which on PAYE tax has
been deducted by the employer under normal PAYE
scheme.
The reason for the above exclusion is that the relevant
WHT/PAYE deducted are considered as final tax.

3. Opening of an Income Tax File.
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If an individual is liable to tax, he must first make an
application to the CGIR. The CGIR will assign a file
number and serve with the return of income for every
year of assessment.
Closing of Income Tax File
A person who has already registered for income tax
purpose can close his file if he establishes that he will not
have any profits or income liable to income tax.

4. Information to be Disclosed in the Return of Income
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A return of income of an individual is mainly
compromised of the following information;
 Particulars of sources of income
 Computation of total statutory income, assessable income,
taxable income and income tax liability.
 Value of the assets and liabilities as at the last date of any
year of assessment.
 Any exempt profits and income.

5. Filling Complete Return of Income
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Mere filing the return of income does not mean that an
obligation of a tax payer is fulfilled. He also must make
sure the return of income is complete and accurate.
For a return to be complete relevant documents to
support the declaration of income and assets should be
sent together with a return.

6. Penalty for Failure to Furnish a Return.
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If a tax payer fails to submit a return he is liable to pay a
penalty. The commissioner General may impose a
penalty not exceeding Rs. 50,000 in case of failure to
submit a return.
He may reduce or waive the entire penalty under the
following circumstances.
 Such failure was due to the circumstances beyond his control
 A return has been subsequently furnished with in the period
specified by him.

7. Payment of Tax
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Payment of income tax is another important obligation of a
tax payer. It is required to compute and pay income tax
liability on self assessment basis, the tax payer must
estimate his Quarterly income tax payable in a year of
assessment.
The Quarterly installment payable is one Quarter of the tax
payable by him for that year of assessment.

8. Payment of Tax……….Contd.
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The income tax law requires to pay such Quarterly
installments on or before due dates. The due dates of
Quarterly installments are as follows;
 1st
Quarter - On or before 15th
of August of that year.
 2nd
Quarter – On or before 15th
of November of that year.
 3rd
Quarter – On or before 15th
of February of the next year.
 4th
Quarter – On or before 15th
of May of the next year.

9. Tax in Default
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Where the Quarterly installments are not paid under self
assessment basis on or before due dates, such amount is
said to be in default.
Where the installment is not paid on or before the due
dates, the tax payer is liable to pay penalty. The penalty
is computed as follows.
 If the tax is not paid on or before due date, the penalty is
10% of the tax.
 Further penalty of 2% will accrue for every additional
month which will not exceed 50% of the tax.
• CGIR has powers to reduce or waive such penalty, if he
is satisfied that the reduction is just & equitable.

10. Discount of 10% for Early Settlement of Tax
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A discount of 10% is allowed to an individual who has
paid Quarterly installment not less than 30 days in
advance.
Verification of the return of income.
Calling for information
Once the return of income is filed by a tax payer , the
assessor may verify the information given in the return of
income. The assessor may require additional information
from time to time from the tax payer for the purpose of
his verification.

11. Assessments
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An assessment could be made on the following
circumstances.
 Where the assessor is of the opinion that the tax payer has
not paid due taxes in a year of assessment.
 Where the assessor is of the opinion that the tax paid by the
tax payer is less than the proper amount that should have
been payable.
• An assessor shall issue notice of assessment to the tax
payer notifying the income tax assessed. Notice of
assessment may indicate income assessed with the
tax charged and penalty.

12. Assessments…… Contd.
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• In issuing an assessment, an assessor must comply with
the following requirements.
 Communication of reason for not accepting a return in
writing Generally, it is made in the form of a letter sent in
registered post to the tax payer.
 Issuing of an assessment within statutory time limit.