There are plenty of things that should be kept in mind while filing your tax returns. These include sources of income, necessary documents, choosing the right form, filling in the correct details, tax liability, switching jobs report, TDS deduction, filing before the deadline and much more.
As the year passes, the due date for return filling i.e. July’31 is approaching speedily; it is the time of year again where the country’s taxpayers scramble for filling the I-T returns. Everyone rushes to chartered accountants for filing returns. After all, the filing of tax return is compulsory for everyone whose gross total income exceeds the basic exemption limit.
Here are few steps to be adhered for successful completion and submission of the Income tax return.
Firstly, you need to identify your sources of income under different heads. Under the I-T Act, all the incomes earned by persons are classified into five different heads, such as income from -
Thus, you should identify all your income from different sources, just to ensure that you haven’t missed out something while filling your return.
Some basic documents that should be referred to while filling the return include-
This shows the income from salary and tax deducted by the employer on the same.
Summary of all bank accounts during the year: This summary gives an idea about the income earned during the year, investments made and other expenses. This will ensure that neither any income nor any eligible deductions are left out in return.
Details of tax paid during the year: This is required in case the individual has paid any advance tax during the year.
Income of a minor child: This is to be included (except in few cases) even it is a small amount, e.g. bank interest.
Once the details in respect of income and expenses are collated, you should check which tax return form is applicable to you. With the introduction of new forms, based on the nature of income earned during the year, you should select the right income-tax form.
For example, there are two I-T return forms -- ITR-1 and ITR-2 - available for salaried individuals at the moment, and your sources of income will decide which form to use. Use the first form if your income is from salary, pension or interest earned in the financial year, and use the second one in case of any capital gain, income or loss from house property and income from any other source.
There is another form - ITR-4 - which is meant for individuals having income from a business or profession. The Tax Department will refuse to accept your form in case you have chosen the wrong one.
Ensure that you fill correct personal details in the form meant for you, especially your name, address, bank account details and PAN number. Bank account details include the bank account number, type of account and the bank's MICR code. "This is crucial, especially if you are claiming a refund. Likewise, your PAN is very important because the tax laws levy a fine for not quoting or misquoting your PAN number.
Having identified your sources of income and after referring to the basic documents, you need to compute your tax liability for the year. If you are familiar with the process and are comfortable with doing it, you can do it all by yourself. If not, you should take the help of a tax expert or a CA or some other qualified professional. This is important as a wrong computation of your tax liability can land you in trouble later on.
You also need to ensure that "if any tax is payable, the same has been paid as 'self-assessment tax' before filing the tax return. Further, if any interest is payable for late payment of tax, then the same has also been deposited.
If you have changed your job during the previous financial year, then don't be under the impression that you can file the tax return on the basis of form 16, as received by your current employer. When you change jobs, you need to combine both the salaries and generally, taxpayers are under the impression that since both companies have deducted TDS then there is no need to combine both form 16 or no need to pay additional tax. Please be careful and include form 16 from both employers
Whether you are filing offline or online, you will likely have TDS deducted by various sources- your employer or bank or a company. If they all issued Form 16 (employer) or TDS certificates, you will do well to ensure that they tally with the Form 26AS credit statement.
In case you have never heard of this, go and register with the tax department or simply login to your internet banking account and you will likely see it on the left or top menu. Click it and it will link you automatically to the Income Tax website. This statement will show the summary of all tax deducted, including advance tax paid or any refund to be made etc. by various entities. Ensure that the individual TDS certificates or the amount mentioned in Form 16 tallies with this.
Sometimes, there could be delays in updating (it should be updated by now) of Form 26AS but you will do well to check with your employer or the deducting entity (bank or corporate), if there is any difference.
After the tax return is filled in, the next step is to file it appropriately, by the due date. For individuals having salary and interest income only, the due date of filing the tax return for the financial year 2015-16 is July 31, 2016. The return may be filed either electronically or in printed form. In few cases, even the electronically-filed return has to be filed in printed form within a given time period.
"One must also ensure that the return is filed with the right tax officer (tax jurisdiction). This is determined based on the address of the individual. In case of salaried employees, the jurisdiction is determined by particulars of the employer".
The proof of filing the return is the acknowledgement, which is stamped and signed by the tax officer and a copy is returned to the individual.
One important thing to remember is whether it is electronic filing or paper filing, now individuals do not have to attach any document or attachment with the return of income
The documents based on which the return is prepared may be requested at a later stage by the Income Tax Officer to check the correctness of the claims made. Failure to submit details may lead to disallowance of the deduction claimed, resulting in an increase in the tax liability or a decrease in the refund. Hence, it is advisable that all the documents required to substantiate the return are maintained by the taxpayer for future reference.
If you are filing the return online, ensure that the ITR V acknowledgement sheet is signed (in blue) and sent by ordinary or speed post (the tax dept. does not take too well to courier) within 120 days of filing your return. This is all the more important if you have paid self-assessment tax or are expecting a refund. Ensure that you receive an e-mail acknowledging your receipt. And do ensure you provide your personal e-mail id for the taxman to communicate. You do not want the id (office id) becoming inaccessible if you switch jobs.
The golden rule is to be organized in your paperwork and be timely in paying tax and filing the tax return
Happy return filing of income!!
Did we miss any important point here? Do comment and share your ideas.