The new tax return form

The Government has introduced a new tax return form, called Saral 2F. You can download this form here. This is a long, boring form that is quite messy to fill up. Unfortunately you have to, if you are a salaried employee with

• NO income from business or profession
• NO Short Term capital gains
• NO more than one property
• NO agricultural income

You have to provide ALL the details in your Form 16 form within your return, and further, provide complete details of

• Bank accounts, including opening and closing balances
• Household expenses (total)
• Investments (total)
• Details of Tax Already Deducted
• Detailed Interest income from all sources
• Detailed Tax Deductions from all sources

This is extremely difficult to digest for pure salary holders. What you can do of course, is to not come under the above brackets, and therefore file form SARAL 2D, which requires lesser details. What you can do is:

• Provide a service to a friend. Become her driver for a day, or set up his computer, or whatever. Then bill your friend Rs. 500 for the service. You now have "Income from business or profession" and only Rs. 500 there. (Your friend can now do the same thing, and bill you in turn for Rs. 500 and you can do this among any number of friends)
• If you have a share trading account, buy and sell a scrip within one year. You then have Short Term Capital Gains, and don't have to file this long winded form.

Of course, you can also take the services of an accountant to file your income tax return, but this can be substantially more expensive. Remember, this form need not be used if you file this year before July 31st. So file early!

Related posts:

1. Capital Gains Tax: A primer If you make a profit buying and selling Capital Assets...

This entry was posted on Tuesday, June 6th, 2006 at 12:39 PM and is filed under Commentary, IncomeTax. You can subscribe to any comments to this entry via RSS 2.0. You can leave a response, or trackback from your own site.