In: Accounting
YAn 18-year-old man and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Neither is required to file a tax return. Taxes were taken out of their pay, so they filed a joint return only to get a refund of the withheld taxes. What questions would you ask these clients, and what documents may you want to review?
There is a misconception that if there is no tax payable, there is no need to file return. This is not true. Even if you do not have taxable income but if you qualify as a ‘resident’ individual and have any asset or financial interest in an entity located outside of India, then also it is mandatory for you to file.
I would ask the clients if they have any other source of income apart of wages like house property, income from other source or capital gains. Futher do they have any investment declaration, or medical insurance for disability, rent payable to qualify as deduction. I would ask them if they have travelled for any private trip in India in order to be eligible for leave travel allowance. Futher, I would ask if they are provided any meal coupons to be eligible for claiming deduction against income declared. I would ask these clients for form 26AS, Previous return filed if any, Bank statement, Form 16, address proof and id proof.