REBATES AND RELEIFS

At present, rebate of Rs.2,000 is allowed as per income tax act under section 87A. The rebate is
deducted from tax dues. This rebate is available to resident individuals whose total income does
not exceed 5,00,000. The rebate is allowed subject to the tax dues or Rs. 2000 , whichever
is lower. Relief is allowed for any taxes paid outside India. For an Indian resident, then any
income earned outside India will also be taxed in India.

There is only one rebate and one relief available to the tax payers. The major rebate
under section 88 has already been replaced with deduction under section 80C.
1. Rebate in respect of securities transaction tax (Section 88E):-This rebate is
applicable to an assessee who has income chargeable under the head “Profits and gains from
business or profession”, on account of taxable securities transactions. Amount of securities
transaction tax paid by the assessee in respect of the taxable securities transactions entered
during the course of his business is allowed as rebate.
2. Rebate when salary, etc. is paid in arrears or in advance (Section 89):-
An employee, when he receives salary in arrears, can avail of relief on arrears of salary u/s 89(1)
of the Income Tax Act. Even those who received family pension in arrears (though not an
employee) are entitled to this relief.

Tax Relief is any program or incentive that helps to reduce the tax in some way or another. This
tax relief can be in the form of a tax deduction or a tax credit. A tax deduction is basically a
deduction of tax. It allows one to deduct an amount from the total income of the person.
Comparison between Income Tax Deduction, Rebate and Relief:
Basis Tax Deduction Tax Rebate Tax Relief
The return of excess amounts Any program or incentive
A deduction from gross
of income tax that a taxpayer that reduces the amount of
income that arises due to
Description has paid to the state or federal tax owed by an individual
various types of expenses
government throughout the or business entity.
incurred by a taxpayer.
past year.
Type Reduction of income Refund of tax paid Any relief of tax
Directly or indirectly
How it works Indirectly reduce tax bills Refunds excessively paid tax
reduce taxes
Anything that reduces the
Reduces the income on Refunds tax that has been paid
Reduction tax that has to be paid. Can
which the tax is calculated beforehand
be a deduction or a credit.
Can be on the basis of
taxes already paid or to
Expenses, particularly encourage investment. It
Calculated on
those incurred to produce Taxes already paid can also be on the basis of
the basis of
additional income expenses, particularly those
incurred to produce
additional income.

REFUND OF TAX
An Income Tax Refund is a refund which is issued to the taxpayer by Income Tax authorities
when his tax liability is less than the actual taxes he paid.
There are several situations where a person becomes eligible for tax refund:
• If the taxpayer has paid more tax as self-assessment but he is liable to pay less tax through
regular assessment.
• If TDS deducted by bank or employer of taxpayer is more than latter’s tax liability through
regular assessment.
• If the same income of a taxpayer has been taxed in a foreign country (with which the
government of India has an agreement to avoid double-taxation) and in India as well.
• If the taxpayer had not declared some investments which provided tax benefits to him.
Tax refund can be claimed by filing your return of income. Usually the return filing due date
each year is 31st of July each year unless extended.
Tax refund is paid either through direct credit to your bank account or by cheque.
PENALTIES AND APPEALS
Penalty refers to monetary punishment for violation of law. Under Income-tax Act, penalties are
imposed either by the departmental authorities or by the court.
The power to impose a penalty is given to Assessing Officer and the Commissioner. The right to
impose penalty by I.T.O. does not come to an end when an appeal is filed against the assessment
made by him although in certain cases he has to obtain the prior approval of the Deputy
Commissioner. The above-mentioned income-tax authorities are empowered to impose penalties
for default in the course of proceedings going on before them.
TYPES OF PENALTIES

1. For failure to pay tax:- If the assessee, on whom notice of demand has been served, fails to
pay the specified amount of tax, he shall be liable to a penalty which the Assessing Officer, may,
from time to time, direct, however the total amount of penalty shall not exceed the amount of tax
due.

2. For failure to pay tax on self-assessment:- If the assessee fails to pay the amount of tax on the
basis of self-assessment he will be liable to a penalty to be imposed @ 1% of the tax due on self-
assessment of each month of default.
3. For concealment of income:- Where any person has concealed the particulars of his
income or has furnished inaccurate particulars of such income, he will be liable to a penalty. The
minimum penalty leviable for concealment has been fixed at not less than 100% but not exceeding
300% of the amount of tax sought to be evaded by reason of concealment of income. Such penalty
shall be in addition to tax if any payable.
4. For failure to keep, maintain or retain books of account, documents, etc.:- If any person
fails to keep and maintain books or documents as required by Section 44 AA, he will be liable to
a penalty which may be equal to a sum which shall not be less than Rs. 25,000.
5. Failure to maintain information or documents about international transaction:- Where any
person fails to keep and maintain any document or information regarding international transaction
as covered u/s 92E, the Assessing Officer or Commissioner may ask such person to pay a penalty
of 2% of the value of each international transaction.
6. Failure to get accounts audited:- If any person fails to get his accounts audited in respect of
any previous year or years or furnish the said report along with the return of his income (i), the
Assessing Officer may direct that such person shall pay a penalty equal to one-half (1/2) per cent
of the total sales, turnover of gross receipts in business or of the gross receipts in profession or a
sum of Rs. 1,00,000, whichever is less.
7. Penalty for failure to deduct tax at source:- If any person fails to deduct the whole or any
part of the tax as required by or under the provisions of the Act, or fails to pay whole or any part
of tax deducted at source ; he shall be liable to pay a penalty which shall be a sum equal to the
amount of the tax which he failed to deduct or pay as required.

In general parlance, ‘Appeal’ means ‘making a request’ and in legal parlance, it means ‘apply to
a higher court for a reversal of the decision of a lower court’.
In India, the taxpayer computes the tax payable on his total income and pays to the government.
If the Income Tax department (the government) disagrees with the tax computed by the taxpayer,
they can levy an additional tax. Under Income Tax Act, the liability is determined at the level of
Assessing Officer (it can be Income Tax Officer (ITO) or Assistant/Deputy Commissioner of
Income Tax)
A tax payer aggrieved by various actions of Assessing Officer (say higher tax demand) can
appeal before Commissioner of Income Tax (Appeals). Further appeal can be preferred before
the Income Tax Appellate Tribunal. On substantial question of law, further appeal can be filed
before the High Court and even to the Supreme Court.

Appeal before Commissioner

Aggrieved tax payer can file appeal before the Commissioner having, jurisdiction over the tax
payer. Appeal can be filed when a taxpayer is adversely affected by the Orders passed by Tax
authorities. Every appeal to the Commissioner is to be filed in Form No. 35, signed by the
taxpayer/director or his authorized representative. Appeal is to be filed within 30 days of the
date of service of notice of demand relating to assessment or penalty order or the date of service
of order sought to be appealed against, as the case may be.

Appeal before Income Tax Appellate Tribunal (ITAT)

Appeal against an order of Commissioner lies with the Income Tax Appellate Tribunal (ITAT).
Both tax payer and the Assessing Officer can file appeal before ITAT.
Appeal is to be filed (in Form 36) before the Appellate Tribunal within 60 days of the date on
which order appealed against is communicated to the taxpayer or the Commissioner, as the case
may be.

Appeal before High Court

Appeal to the High Court against Appellate Tribunal’s order can be filed by the tax payer or the
Chief Commissioner/Commissioner within 120 days of receipt of the order and in the form of
memorandum of appeal, precisely stating the substantial question of law involved.

Appeal before Supreme Court

Appeal against High Court’s order in respect of Appellate Tribunal’s order lies with the Supreme
Court in those cases, which are certified to be fit for appeal to the Supreme Court.

RETURN OF INCOME
The taxpayer has to communicate the details of his taxable income/loss to the Income Tax
Department. These details are communicated in the form of return of income.
Filing Of Return and Procedure for Filing
Return is a Document in which the assessee discusses his income and taxes payable by him.
Following details are made in the return:-
1. Name of the assessee.
2. Address.
3. PAN.
4. Residential status.
5. Income under each heads of income.
6. Tax payable.
7. Taxes already paid.
8. Net payable or refundable.

Submission of Return of Income

Following persons shall voluntarily file their return of income for any previous year on or before
the due date in the prescribed form and manner.
1. Every company or partnership firm irrespective of their income or losses shall be
required to file return of income.
2. Any other person like individual, HUF, AOP, BOI, Artificial juridical person shall file
their return of income, if their gross total income exceeds the maximum limit for such
previous year.
3. ROR shall always file return of income, if the person has any assets located outside India.

Due Dates of Filing of Returns

PARTICULARS DUE DATE

Company 30th September
Other than a company
(a) Where the accounts are required to be audited or where the assessee is a 30th September
working partner in a firm and accounts are to be audited.
(b) In case of any other assessee. 31st July.
Any assessee who is engaged in international transactions or specified domestic 30th November.
transactions.

Modes of Filing the Return of Income

Return forms can be filed with the Income Tax Department in any of the following ways:-
1. By furnishing the return in a paper form.
2. By furnishing the return electronically under digital signature.
3. By transmitting the data in the return electronically under electronic verification code.
Mandatory E-Filing of Return
Following tax payers shall file their return of income only through e-filing mode:-
1. From AY 2015-16, any assessee (other than an individual of the age of 80 years or
more) having a refund claim in the return or having total income more than Rs.
5,00,000, is required to furnish the return electronically with or without digital
signature or by using electronic verification code.
2. Every company shall furnish the return electronically under digital signature.
3. A firm or an Individual or a HUF whose books of accounts are required to be audited,
shall furnish the return electronically under digital signature.
4. A resident assessee having assets located outside India or Income from any source
outside India shall furnish the return electronically with or without digital signature or
by using electronic verification code.
5. Taxpayers claiming relief under Sec 90,90A or 91 shall furnish the return
electronically with or without digital signature or by using electronic verification
code.

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