If you are a salaried person, you must have got your Form 16 from your employer If the total income is more than Rs 5 lakh one has to mandatory go for e-filing. Also, refund of taxes becomes much faster when you opt for e-filing.
These days one has various options through which he/she can file returns. One can either simply opt for the tax department’s site or take the help of various other online platforms with better interfaces. One such option is Genius Software for return e-filing of several taxes.
Things To Be Kept In Mind While ITR Filing
However, whichever option you choose, here are important things that are to be kept in mind while filing income tax returns online.
Select a New Tax Regime or Old That will be More Advantageous
The Finance Act, 2020 has introduced a new optional tax regime for the assessee with the updated tax slabs and rates, in place of the continued mentioned exemptions and deductions. The assessee would have the choice to opt through the old and amended tax regimes during the furnishing of the tax return. The salaried assessee would indeed amend the regime, the same which he had previously shown to their employer during the time of filing an income tax return.
Need for Multiple Disclosures
Below are the mentioned disclosures of several assets and financial investments that form an integral part of the income tax return:
- Mentioned information on all Indian bank accounts
- Mentioned data of unlisted equity shares
- Information about directorship carried in Indian or foreign companies.
- The schedule assets and liabilities: the information of the particular assets like land, building, movable assets, etc, and financial assets (bank deposits, shares & securities, cash in hand, etc.), as well as the respective liabilities, need to be shown if the total income of the person is more than Rs 50 lakh.
- Schedule Foreign Assets: Ordinarily, Resident individuals are liable for filing the information of their assets maintained outside India (both as an owner and as a beneficiary) according to the mentioned disclosure rules.
Importance of Non-Filing of an Income Tax Return by the Due Date
The assessee might not be able to file the income tax return by the mentioned date because of various causes like non-availability of relevant documents/ information, lack of time, personal exigencies, etc. irrespective of any cause, if the deadline of the income tax return would not be followed then the same might directed to attain various consequences beneath the act like imposing the fine of the late filing, interest payment on balance tax liability, under qualified to carry forward some losses, etc.
Disclosing, it will be good for assessees to assess their taxable income under the provisions of the act and validate all the documents and details during calculating the final tax payable/refundable according to the case. Before doing that must take the knowledge of the mentioned aspects amongst the others to furnish the income tax return without drawing any penal consequences.
TDS Certificate Form 16A and Others
Excluding Form 16, a person should accumulate the other TDS certificates that would be subjected to him or her. If the interest incurred on the FDs is more than Rs 40,000 or Rs 50,000 for the senior citizens then the bank would deduct the tax on the same. For the individuals, Form 16A would be needed to get issued by the bank for the tax deducted. Mutual funds and the companies would provide you Form 16A towards the tax deducted upon the dividends furnished, mentioning that it is more than Rs 5,000.
Identical to that those who obtain a monthly rent of Rs 50,000 or exceed must obtain Form 16C (TDS certificate) from their tenant. According to the present income tax laws, if the tenants furnished a monthly rent of Rs 50,000 or exceed are needed to deduct the tax via the annual rent amount furnished.
People who sold the land, and property must seek their purchaser to file Form 16B for the tax deducted on the amount. TDS would be essential if the property is sold for exceeding Rs 50 lakh.
Report of Annual Information Statement
The income tax department founded the Annual Information Statement (AIS) in Nov 2021. The same statement poses the information of all the financial transactions conducted via a person in the specific fiscal year.
Under the press release provided by the department in Nov 2021, “The new AIS includes additional information relating to interest, dividend, securities transactions, mutual fund transactions, foreign remittance information, etc.” Moreover, the statement poses the information on the taxes deposited with respect to your PAN with the government.
A person should download and verify the fiscal transactions via AIS to confirm that the incomes provided in the statement are reported in the income tax return form as subjected to you.
Income Tax Saving Investment and Proofs of Expenditure
The same is essential to collect the tax savings investment and expenditure proofs to claim deduction during furnishing the income tax return. A person would claim tax-saving investments and expenditures if they choose the old tax regime during ITR filing. Employees show and submit all the tax-saving proofs (if they choose the old income tax regime) to their employers to prevent the higher TDS on their salary. The proofs submitted are written in part B of Form 16. The tax department opts for the details via part B of Form 16 and pre-fills the same in the ITR form.
But if you fail to show any tax-saving proof, it will be availed during the time of ITR filing.
Aadhaar Number Mandatory U/S 139AA
As per section 139AA of the Income-tax Act, 1961, during furnishing the ITR, a person is needed to fetch his or her Aadhaar number. When you do not have your Aadhaar number but have applied for that then you will be needed to fetch your enrollment ID in the income tax return form.
Details of Bank Account for IT Refund
The same is essential to furnish the information of the bank accounts maintained by you in the fiscal year 2023-24. You need to report your account even if you have already closed your account in the fiscal year. Your bank name, account number, account type, and IFS code should be mentioned by you. Moreover, the bank account should be pre-validated to obtain the credit of the income tax refund.
Form 16 Under TDS
Usually while filing the income tax returns online, one has to manually enter the numbers, although there are sites that allow the user to upload Form 16 and directly pick the figures from it. In both cases, one should double-check the figures and make sure they are correct.
There is often confusion between “net income” and “gross income”
Gross Income – Deductions = Net Income
Although the tax is calculated on the net income, you still need to report the Gross Income in your ITR form. If you are filing ITR-1, you can directly show the gross salary bifurcated into salary under sections 17(1), 17(2), and 17(3) and show the allowances exempt u/s 10 separately. However, if you are filing ITR-2/3, it is mandatory to show bifurcated salary components i.e. basic, DA, HRA, etc from AY 2021-22.
Taxpayers often get confused between exempt and nonexempt allowances and skip deductions part. They should check whether the PF and HRA deductions have been reported correctly. In case of a job switch, they should submit proof of investments to their employer. They should also double-check that their Form 16 has the correct employer name, address, and TAN.
Which ITR Form to Fill
In most online platforms the forms get automatically selected on the basis of information provided by the user. But on some platforms, you may need to know which form is for you. Choosing the wrong form may mean an error in filing returns and require you to file again.
You may have income from salary only but you can’t file ITR 1 if you own more than one house or have capital gains/losses ITR 2 will be filed in this case.
If you have income from a business or profession and opt for presumptive taxation i.e. 44AD, 44ADA/44AE then you can file ITR-4. But along with it, if you have capital gains/losses or income from more than one house property, ITR-3 will be applicable.
TDS and Form 26AS
Your TDS will be likely to get 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 Form 26AS. Form 26AS can be downloaded from the TRACES site. The income tax department’s e-filing site also provides a link. It can be viewed in HTML/Text/PDF format.
Declaring Income from Other Sources and Capital Gains
The major task was figuring out Form 16. After that, it’s just merely copying figures on the ITR Form. But in case you have income from other sources you need to be extra cautious. Lately, the department has become vigilant and you may end up with a notice. Income from other sources is a residuary head of income. All income other than income from salary, house property, business, profession, or capital gains is covered under ‘income from other sources. Typical incomes under this head include interest on the bank or other deposits, taxable dividends, income from securities by way of interest, family pension, income from subletting, etc.
One should not skip reporting income from a second house, even if it is not rented out as you have to pay tax based on Deemed Income. Taxpayers also make mistakes in head Capital gains or losses Capital gains/losses have to be reported in Schedule CG of form ITR 2.
How to ITR E-verify
There is no point in filing the returns timely if you opt for verification through sending a physical copy of the ITR and the ITR-V doesn’t reach the department within the stipulated time ie. within 30 days of filing the returns. You won’t get your refunds and plus your returns won’t be considered valid if the department does not receive a signed copy of the ITR-V in the given time.
Instead of sending the physical copy of the Income-tax Return 5 to the CPC (Central Processing Centre) in Bengaluru, one can e-verify by linking the Aadhaar or through net banking. For Aadhaar-linked verification, one has to be registered on the e-filing site and link his Aadhaar number. One must also possess the Aadhar number while filing the income tax return as the most recent government announcement has cleared out that the taxpayers must link their Aadhar number at the time of filing the income tax returns and also quote it while applying for a new PAN card. Once the validation is done, an OTP will be generated, which will be sent to your Aadhaar registered mobile number, and will be valid for the next 10 minutes. This will be required while e-verifying your ITR-5.
Avoid Major Common Mistakes While Income Tax Returns
It has been seen that almost all specific taxpayers file their individual ITRs themselves own income tax returns themselves. Because income tax is known as complex law, where an individual taxpayer is inclined to commit particular mistakes while filing the income tax return forms. In this article, the motive of writing is to discuss some minor mistakes made by particular taxpayers meanwhile filing the ITR and which can be ignored.
Capital Gains Schedule CG Filing
The schedule for completing details of capital gains ‘CG’ is the excessively complex part of the entire ITR form. There are several holding periods needed for multiple classes of assets to qualify as a long-term capital benefit. Also, there are various tax rates for multiple categories of long-term and short-term capital gains. And moreover with several exceptions available in respect of multiple long-term capital gains, filling up the CG schedule is an arduous task even for a well-knowledgeable Chartered Accountant.
Therefore an individual taxpayer is required to be extra concerned while filing. You need to be cautious in dividing your taxable capital gains in each of the four quarters for a total advance tax liability as the law expects you to repay the capital gains tax instalment for capital gains in the balance instalment lowering because later the capital gain transaction. A minor mistake may cause you to terms of higher interest. Similarly, you are also needed to complete details of the capital gains taxable at different rates. Any false information mentioned may result in incorrect payment of taxes and an issue of notice by the income tax department.
Mobile Number & Email ID
With the trend of digitalization, the income tax department also jumped into it and started depending on electronic communication. So, rather than transferring you direct messages, the income tax department these days sends all the communications along with several remarks on the email address and mobile number listed with them. So, it is necessary to be aware that all the details mentioned will be updated in the income tax department.
So, you need to ensure that the details like mobile number and email address which are given are identical and receive prefilled in the IT return form as per their documents. But if you have switched your mobile number or email address lately, you need to get updated under your profile. Please do care that you do not manage the email address and mobile number given by your organization and should use the personal email address and mobile number to break the gap in case you have to change your job.
Refund Bank Account Details
As the income tax department in most cases cancels the ITR in the bank account straightway, it is necessary for you to ensure that the bank details chosen for credit of the income tax return are correct. Ultimately, if the details that have been filled you are not correct then the refund will not be credited to your account. To get a certain refund you need to go through the tiresome process of making a request for a reissue of funds. So, check at once that the account number, IFSC code, etc are mentioned correctly. If possible, do not use the bank account for return purposes which you are preparing to finish in the near prospect.
The organizers normally require the fresh employees to begin a bank account with a bank as wanted by the employer for getting a credit salary. If you are planning to close one of your accounts soon or in the coming future after leaving your job then in that case do not use that number as you have complete parts of the corresponding account for your income tax return.
Tax Deducted and Paid Details
As the taxpayers are not authorized to link any documents as evidence of the amount of taxes with ITR, the credit for TDS is provided on the basis of information available with the tax department. Meanwhile, meanwhile filling in the details of TDS, please ensure that the PAN number of the deductor is correctly written as per form 26AS under income tax. Similarly for taxes given by you guarantee that the items of challan number and BSR code for adjustment of advance tax and self-assessment tax are accurately shown in the ITR.
In terms of an unimportant error, you may not receive the credit for the taxes and may also get a demand notice so to get the matter straight you will have to go through the inconvenience of filing amends under section 154 to receive the error fixed.
Residential Individual Foreign Bank Accounts
Those who stayed abroad even for a short span and had opened a bank account will have to submit the details like bank account/s in terms when the same was not closed before you moved to India. This you should if you had to cancel the whole balance by emptying the account. If any bank account is still left in your name which is not closed yet, you cannot use the simplest ITR i.e. file online ITR 1 but will match to utilize ITR 2 and complete the details of certain bank accounts.
So, people who are residing abroad need to close their bank accounts when they visit India to avoid the need to file a more elaborate ITR form.
