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The countdown has begun for filing your income tax return (ITR). It was easier in the previous financial years, when you just handed your Form 16 over to your chartered accountant to file the income tax return on your behalf. The chartered accountant would take care of your paperwork, Form 16, accuracy of the return and hand over the ITR receipt on the completion of the process. But starting this year, you are required to file tax returns online especially if you are earning an annual salary of . 10 lakh or above. The tax portals are very user friendly and decode most of the technical details for the tax payers. However, the onus lies on you to enter every financial detail appropriately and file an accurate tax return.
Generally, due to the inbuilt mechanisms, returns filed electronically would have all the information mandatorily required to be filled in. These would include residential status, gender, TAN of the employer etc.
The ITR would be considered inaccurate if certain details mentioned in the return are wrong or certain details are missing altogether. The inaccuracies can have financial implications for the tax payer as a particular deduction, tax credit or loss may not be considered by the tax department; and this will enhance the tax liability of the tax payer. At times, there could be penal consequences too.
Common Misses
The most common detail which tax payers forget to mention in their income tax return is the interest income from bank FDs. Sometimes it could be due to lack of awareness or the delay in the TDS certificate to be given by the banks. Generally, banks give the TDS certificate in February or March every year. Tax payers fill the ITR details as mentioned in the Form 16 and leave out such details which are usually not mentioned in it.
Tax payers should refer to tax credit statement in Form 26AS to ensure that their income, TDS and tax payment details are completely reflected in the tax return form.
The second missing element could be claiming deductions/exemptions which the tax payer is entitled to, but are not reflected in the Form 16. Often employees invest in tax saving instruments after submitting their investment declaration to the employer. In such cases the Form 16 will not have complete details of such investments.
Most individuals avail deduction of interest on repayment of home loan. However, not many are aware that any interest paid on home loan for reconstruction, renewal and repair of the house property is allowed as deduction up to a maximum of . 30,000, subject to the overall limit of . 1,50,000. Hence before filing the return you should look at every investment and loan and understand the tax treatment for them.
For Salaried Class
You have to mention details of your rental income, capital gains or income from other sources (such as bank interest, etc.) earned during the corresponding financial year. Moreover, if you qualify as resident and ordinarily resident in India and have overseas assets, the details of the same should be mentioned in appropriate columns in the income tax return.
Self employed individuals
A self employed individual should choose the correct income-tax return form (ITR-4/4S - which is meant for individuals having income from a business or profession). A self employed individual can take full advantage of all business expenses. You can also claim depreciation on work related assets like laptops, computers, furniture, UPS and vehicles. Hence the bills of capital expenditures should also be maintained.
It is observed that those who file their tax return themselves often enter the amount of gross salary instead of the amount of taxable salary in the tax return form. This often results in taxpayers receiving demand notices from the tax department. Apart from salary, the section of the tax return on deduction under Chapter VIA (deductions under Section 80C on various investments, Section 80D on health insurance premium, Section 80G on donations, etc.) should be filled in accurately.
Further, the details of interest on housing loan should be entered correctly. The tax payer should obtain a final certificate from the housing finance company and enter the amount as per the final certificate. The amount reflected in Form 16 is based on the provisional tax certificate issued by the housing finance company which is submitted to the payroll department.
If you file your return online and realise later that there is a mistake in the ITR, you can rectify it by filing a "revised" income-tax return. However, a revised income-tax return can be filed only if the original income-tax return is filed within the due date. The revised income-tax return can be filed within 2 years from the close of the financial year or before the completion of assessment by tax officer, whichever is earlier.
Moreover, if the original return was filed electronically then revised return should be filed electronically as well. And if the original return was filed physically then the revised return too shall be filed physically.
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