BENGALURU: Filing your taxes and returns could seem like a tedious and time-consuming process. With almost 40 days left for filing Income Tax Returns (ITR), CE speaks to S Ramkumar, senior director at Sundaram & Srinivasan Chartered Accountants to provide a quick checklist of all you need to have to file your returns.
The Return Form can be filed with the Income Tax Department manually by filling out the I-T form, electronically under digital signature, electronically under electronic verification code, or by transmitting the data in the return electronically and then submitting the verification of the return in Return Form ITR-V.
Find your category
Depending on the kind of income you have, you have to fill a certain type of ITR form. Salaried employees need to fill out the ITR-1 or Sahaj Form. However, your income should be less than `50 lakh per year. You can have income from house property and other sources excluding winning from lottery and income from race horses. If you are a director in a company or hold unlisted equity shares anytime during a financial year, then you are not eligible to file ITR-1. You cannot file ITR-1 if you have taxable capital gains or have income from business and profession. You are also ineligible to file ITR-1 if you have an agricultural income of more than `5,000. Further, income from more than one house property, carrying forward losses and so on makes one illegible to use ITR-1, in which case one has to file ITR-2.
“Aadhaar card is being made an alternative for PAN cards. So file with or by linking Aadhaar because it is beneficial to the assessee as it does not include documentation or paper submission to CPC. Refunds, if any, get credited to the bank account directly since it is Aadhaar OTP verified,” Ramkumar said.
Common mistakes
He went on to add that one of the common mistakes that people make when it comes to filing their returns is that they do not include exempted income. This year, in ITR-1, tax-exempt incomes have to be reported in the tab, ‘Computation of income and tax’. The most common types of tax-exempt income include life insurance policy maturity proceeds, Statutory Provident Fund (SPF), recognised Employees’ Provident Fund, superannuation fund, exempted dividend income, agriculture income not exceeding `5,000 and more.
“Exempted income needs to be declared to income tax,” he said. “Even if it is a dividend or interest or pension that is exempted, it needs to be declared as it will show the source of income when accumulated or for borrowings and other purposes.”
The current regime has made filing income tax returns a much easier and hassle-free process. However, Ramkumar said that when it comes to capital gains, other sources income, gifts and other tax complications, it was advisable to consult a professional.
Another common error is people feel that they are not earning an income and hence, need not file their ITR. “Filing an ITR stating Nil return is necessary,” Ramkumar said. “Else notices are furnished based on transactions in linked mobile numbers or Aadhaar-based bank transactions. It is also recommended to disclose income within exempted limits or exempted income to show the source of income in the future when it is accumulated to a sizeable sum or for loans like borrowings for housing or with rental income to borrow business loans.”
Checklist
As a quick checklist of documents, he said Aadhaar and its subsequent linking was a must. All assets, both moveable and immovable, should be disclosed in the asset column in the return form. All bank accounts whether linked or not to your PAN or Aadhaar should be revealed as concealing of details is an offence. Form 16 or 26AS is yet another must-have document while filing your returns. Lastly, he said it was imperative to review your bank account on credits before filing of returns.
The due date for filing return with the Income Tax Department is August 31.