E-filing is not as hard as getting to work every morning. Find out how to get to your highway to returns.
Filing tax returns may seem like a gargantuan task, but it isn’t in reality! With July 31st fast approaching, here is a quick sum up of the e-tax filling process, including the documents you must keep ready and things to keep in mind, so that you don’t feel like you are in a tax jam.
E-filing or Electronic Filing of your Income Tax returns is way easier compared to the traditional method. You wouldn’t want to take a day off from work, head to the Income Tax Department’s office and file your returns physically, would you?
The e-filing process is simple, convenient and doesn’t require physical copies of your documents (Go green!). And the best part is you can do it for FREE! Hurrah!
Who Is Not Required To Adhere To The 31st July Deadline?
The 31st July deadline for filing annual returns is applicable to all assessees other than the ones below:
- Corporate assessees
- Non-corporate assessees, whose books of accounts are required to be audited
- Working partner of a firm whose accounts are required to be audited
- An assessee who is required to furnish a report under section 92E
Who Has To Compulsorily E-file?
One can file income tax both offline and online. However, e-filing is compulsory in some cases, as seen below:
- If you are a self-employed or salaried individual earning more than Rs. 5 lakhs taxable income during the financial year
- All individuals availing any tax deduction under sections 90, 90A or 91 in the ITR, except those filing their return with ITR form 7
Additional Reading: FAQs About E-Filing Your Income Tax Return
Even if you do not find yourself in these categories, you can still go ahead and e-file your income tax return. The e-filing process on the Income Tax India official government website makes it easy to cut through the maze of difficult tax jargon. It helps speed up the process, especially if it involves refunds.
If you’re still confused about e-filing your tax returns, here is a step-by-step guide to help you.
Five Things You Shouldn’t Miss While Filing Tax Returns
Use ITR-1 or Sahaj if you are a resident Indian earning salary income, pension income or income from property (one house) or income from other sources (with the exception of lottery) and having a total income of up to Rs. 50 lakhs.
Fill the ITR-2 form if you earn income from property (more than one house), from capital gains, or from foreign assets.
Peruse the ITR-3 form if you are a business person, a partner in a firm or a professional and earn income from any of the sources mentioned under ITR-2.
ITR-4 is for those earning a presumptive business income. If you opt for a taxation scheme under section 44AD, 44ADA OR 44AE, you will also have to use ITR-4 to file your returns. Earlier, the only particulars that one would need to fill in ITR-4 were total debtors, total creditors, cash balance and totalx stock-in-trade.
One of the most notable changes in the ITR forms is that they have scrapped the ‘gender’ section. You no longer need to mention your gender in order to file income tax returns.
Additional Reading: Things To Know Before Filing Your Income Tax Return (ITR)
Requirement of Aadhaar
With the newly added Section 139AA of the IT Act, all individuals who have an Aadhaar card or have applied for one will have to mention their Aadhaar number or acknowledgment number in their tax return.
If you have Aadhaar and do not mention it in your tax return form, then the IT department can issue a notice to you for withholding important information (even if they have accepted your tax return). Also, you’ll need to link your Aadhaar with your PAN before you file your taxes this year.
Those who do not have an Aadhaar card need to provide their enrollment number.
Disclose These Details
Please disclose information about all the assets that you hold without fail. For example, if you’ve been abroad for a few years recently, you must disclose information about your foreign assets. Not doing so is inviting trouble from the tax authority.
If you fall into the rich class, it isn’t going to be very easy either. If your income exceeds Rs. 50 lakhs, you have to disclose all your assets – movable assets, financial assets and your liabilities – while filing your taxes. You’ll have to ensure that you mention the accurate cost value of your assets too. Else, the authorities might question you if there is a mismatch between the cost value of your assets and value mentioned in your return form.
For your information, movable assets include hard cash (those hidden under your mattress as well as lying in your Savings Account), vehicles you own (even the fancy yacht or aircraft), bullion, jewellery and any other valuable metals in your possession. Financial assets include your insurance policies, Fixed Deposits, Mutual Funds, shares or bonds. Your liabilities are the outstanding loans you have.
Verify Form 26AS
Before you file your taxes, you have to first verify whether the tax that has been deducted on your behalf is credited to your PAN or not. The tax deducted by your employer can be checked in your Form 16. Other deducted taxes such as TDS on interest, advance tax, etc. will reflect on your Form 26AS.
The Form 26AS is the only proof of the taxes that you’ve paid and the tax authority verifies your tax return form details with the amount that reflects in your Form 26AS. So, if there are any discrepancies in your Form 26AS, you should get it rectified at the earliest.
The one rule that you shouldn’t ignore when it comes to filing your tax return is filing it before the deadline (or at least by the deadline) and then getting it verified. Until last year, there weren’t any penalties if you didn’t file within the deadline as long as you paid your taxes. However, with the new rules, there is a Rs. 5,000 penalty if you do not file your taxes before 31st December of the relevant assessment year. This penalty will be Rs. 10,000 if you don’t file it before the end of the assessment year.
Also, if you had deposited cash in excess of Rs. 2 lakhs post demonetisation and not mentioned it in your previous return, you can file a belated or revised return. Do not ignore this as the Tax Department authorities already have the details of individuals who have made such deposits. Penalties for not mentioning these deposits can range from 50% to 200% of the not-reported income. Also, you will have to pay penalties under section 234A for late filing of returns at the rate of 1% per month.
Keep calm and file your tax return honestly and without fail.
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