Filing income-tax return is a yearly ritual followed by all taxpayers. While filing the return, necessary precautions are to be taken to avoid confusion and litigation at a later date. Here are some key points to be taken into consideration for a hassle-free filing of tax return.
Selection of form
There are eight return forms prescribed for filing the income-tax return. Every taxpayer must choose the correct return form appropriate to the source of income in his total income chargeable to tax. For example, a partner with no other business income must adopt form ITR-3 so that the purpose is served in addition to convenience in filing of return.
Availability of details
The taxpayer must keep all the details required for filing the return with him before resorting to actual filing work. Though the tax returns are annexure-less, keeping all the details in hand and filling-in the tax return form meticulously could make return filing a simple single stroke work.
By registering with www.incometaxindiaefiling.gov.in, taxpayers may also know the amount of tax deducted at source or collected at source standing to their credit and accordingly adjust the tax liability or make a claim for refund.
A tax credit omitted to be claimed in the original return cannot be claimed subsequently as the law does not permit revised return for enhanced refund claim. However, offering additional incomes and filing of revised return thereto is permissible.
Quantum and eligibility for deduction under Sections 80C, 80D, 80DD, 80DDB, 80E, 80G, 80GGC and 80U in the light of any recent changes may also be kept in mind for utilising the correct deduction. A wrong claim might result in slapping of penalty and a non-claim could be set right only by filing revised return later.
Filing the return on or before the 'due date' would mean no interest under Section 234A of the Act. Even if the assessment is made subsequently with upward revision of income, the levy of interest under Section 234A would not be possible if the return is filed on or before the due date.
E-based return
Recent experiences in return filing has shown that e-filing of tax returns has been efficient, effective and trouble-free for taxpayers.
Though intimation in respect of those returns have been trickling in only over the last few weeks, the experience shows that e-filing is worth the waiting time for getting response in the form of intimation under Section 143(1) of the Act. A first hand experience of obtaining refund for e-returns might also motivate many more taxpayers to opt for e-filing of returns.
AIR data
For filing the tax return, relevant and accurate data is to be keyed in. The taxpayers must also remember that high value transactions are liable for disclosure by various authorities under 'Annual Information Report' (AIR).
It is necessary to fill in the relevant columns of the tax return correctly. In the event of mismatch between the return filed and AIR, the case might be selected for scrutiny under computer aided scrutiny system adopted by the tax department.
Scope for revision
July 31 is the 'due date' for filing returns by all taxpayers except those whose accounts are liable for audit under the income-tax law or any other law. Filing return before the 'due date' entitles the taxpayer to file a revised return in the event of any error or omission therein. Whereas a return filed beyond the 'due date' is not eligible for such revision.
Carry forward of losses
A return filed on or before the due date, also enables the taxpayer to carry forward losses viz. business loss, loss under the head 'capital gains', speculation business loss and loss under the head 'other sources' which could be set off against income of the subsequent year. This disqualification of carry forward however will not apply to unabsorbed depreciation.
Tax incentive
In the recent times, whenever a tax incentive is given by way of exemption or deduction, it is mandated that the tax return is filed before the 'due date'.
At present, such provisions are applicable for undertakings in free trade zone (eligible for deduction under Section 10A) and 100 per cent EOUs (eligible under Section 10B).
