15 Tips To Make Income Tax Return Filing A Breeze


15 Tips to Make Income Tax Return Filing a Breeze

Filing of the income tax return is a very important activity that requires your attention every year. Complex as it maybe, there are various practices that you should include in your ITR filing. Let’s go through a 15-point checklist to better understand the do’s and don’ts that make for a smooth sailing income tax return filing.


  1. PAN card— PAN has to be quoted in your income tax return. Also, the date of birth and father's name quoted in the income tax return should be same as that mentioned in the PAN card.


  1. Aadhaar card— From 1 July, 2017 quoting of Aadhaar number or Aadhaar enrolment number has become mandatory. If you do not have one, make sure you apply for Aadhaar card before filing your returns.


  1. Form 16 — Form 16is an important document. It contains most of the information required to file income tax return. Usually, an employer provides this form to the employee by 31st May, every year. If you have worked with more than one employer during the financial year you must collect Form 16 from both the employers.

  1. Form 26AS— Form 26AS contains details of all the TDS deducted and is linked to your PAN. The details of TDS deducted on your income from fixed deposit, rent (if TDS deducted), commission income, and salary can be traced here. You can adjust these deductions from your total tax liability, since this tax is already deducted from your income. Do remember to include it in your tax return, details of corresponding income on which TDS is deducted. If you claim TDS and do not include related income, you may receive a tax notice.


  1. Asset details for income more than ₹50 lakh— If your income after all deductions exceeds ₹50 lakhs, you have to provide additional details in your income tax return. Value of immovable asset, movable asset, cash in hand, jewellery and liabilities (if any) have to be declared in the income tax return. These details are required to be declared in Schedule AL which is in the income tax return.


  1. Bank Statement— Bank statements are required for two things. Bank account details are mandatorily required to be mentioned in your income tax return. Any dormant bank accounts are not required to be reported in the income tax return. Also, you need to include all the savings bank interest credited to your account between 1 April to 31 March of that financial year. Savings bank interest up to ₹10,000 is exempt from tax as per section 80TTA.

  1. Investment Proof— If you have not declared investments to your employer or for some reason were not able to provide proofs of your investments to your employer, the deductions will not appear in your Form 16. For any eligible investments made before 31st March of the year, a deduction can be claimed and your total taxable income will be reduced to that extent. So, if you have made the required expenses or made investments, you can include them at the time of filing your tax return. No proofs are required to be submitted to the tax department, but you must keep them safely in your records.


8. Online Return Filing– Online filing reduces chances of error and rework. E-filers put in mandatory checks to make sure you make no mistakes. Your return is checked electronically and apparent mistakes are pointed out to you, so you can correct them before submitting your return. Kindly note that refund return cannot be filed in hard copy. Any income tax return with a refund must be filed online. Any tax return with gross total income in excess of Rs. 5 lakhs must also be filed online. ITR- 3, 4, 5, 6, 7 have to be mandatorily filed online too. 


9. Bank Account Information –The income tax department has made it mandatory for taxpayers to report all their bank accounts in their tax return. You must provide name of the bank, IFSC code, and bank account number and mention whether it is a savings or current account. Remember to mention all your bank accounts. You can omit dormant bank accounts, which have been in-operational for the past 3 financial years. 


10. Income from Interest –Almost all of us have bank accounts, fixed deposits, and some of us also hold post office savings account. All of these earn interest income which must be included in your total income and tax must be paid on it. A lot of taxpayers do not report interest income on which TDS is deducted. TDS is usually deducted @ 10%, but your tax slab may be higher. No TDS is deducted on savings account interest, even though it is fully taxable. Therefore, whether or not these interest incomes are subject to TDS, remember to include them in your return. A maximum deduction of Rs 10,000 is allowed under Section 80TTA on savings account interest. This deduction must be claimed via your tax return. Include interest income in full and then claim deduction in the tax return.

11. Information on foreign income and assets–The income tax department has made reporting of foreign assets and income mandatory. You may not have taxable income, but if you own foreign assets, it is compulsory for you to file a tax return and report them. Foreign assets such as foreign bank accounts or stocks of foreign companies or properties outside India or retirement accounts must be reported. The government has tightened its noose around foreign wealth and you must report if you have any.

12. Section 80C –A maximum of Rs 1.5 lakh can be claimed via section 80C. Section 80C allows a host of investments and expenses. Make sure you fill your cup. If you could not invest in PPF, NSC timely, you can still fill 80C limit with EPF, life insurance premium, school fees, and principal repayment on home loan. These expenses must have been made during the financial year. So, make sure you claim 80C to the maximum.

13. Carrying Forward of Loss –Several taxpayers invest in the stock market and many incur losses which they do not report. However, short term losses on listed equity shares can be set off against capital gains. Any unadjusted losses can be carried forward and set off in future years. To be able to do so, it helps to file your return timely.

14. Tax Relief on Arrears and Filing Form 10E –If you have received arrears of salary, pension or family pension, you are eligible to claim tax relief under section 89(1) of the income tax act. This tax relief makes sure you don’t end up paying extra tax because you received your dues late and tax rates are higher or arrears have bumped up your income. If you are claiming relief under section 89(1), make sure you have filed Form 10E online on the tax department website. Taxpayers who claim this relief but do not submit Form 10E are likely to receive a notice for non-compliance. 

15. Verifying Your Tax Return –The last but perhaps the most critical step to successful return submission is its verification. Returns were earlier verified via sending a signed copy of the ITR-V to CPC, Bangalore. This process took time and was fraught with many problems. But now, tax returns can be verified online via the income tax department website or by generating an OTP via Aadhaar linkage or through net banking.

Remember that diligence and caution can go a long way in successful filing of income tax return. Keeping in mind a few important things, the filing of returns is a breeze.


Keywords: tax,taxes online,taxes in india


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