How In-depth Study of Income Tax Policy Helps in Swift Filing of IT Returns
A taxpayer, who keeps track of all policy updates, will know the visible changes in this year's ITR forms
It’s that time of the year when people get busy filing their taxes. Along with it comes the stress and burden of filing income tax returns. Taxpayers are required to file their returns once a year, and it would benefit them tremendously if they are aware of all the Income Tax Department's latest policy updates. Knowledge of these essential pointers will eliminate the possibilities of errors and claim rejections.
Today there are companies that provide interfaces to file your returns, which is not only user-friendly but makes it as easy as browsing the web. A little more thoroughness and caution can be of immense assistance while filing tax returns. In-depth study of the details is crucial for a swift and easy tax filing of income returns.
E-file Your Returns for Easier Solutions
The tax experts at All India ITR strongly recommend online return filing, as this mode decreases the odds of mistakes, which call for in re-filing. In the e-filing process, there are various mandatory checks to identify mistakes. The system electronically highlights the errors that you can immediately correct before the returns are submitted.
Tax returns can be filed two ways — offline filing and online filing (All India ITR). The offline filing is applicable only for individuals and HUF with an income of INR 5 lakh or less, annually.
Selecting the Applicable ITR Form
A taxpayer, who keeps track of all the updates related to the Income Tax policy, will agree that there have been many visible changes in ITR forms this year. If you are a taxpayer who filed Form ITR4 last year, the change in policy requires you to file Form ITR3 for returns this year. This is the reason why you should choose the specified form applicable, to avoid any mistake.
Linking Aadhaar with PAN has become Mandatory
One of the foremost initiatives introduced by the Government of India this year is the linking of your Aadhaar card with Personal Account Number (PAN) for filing returns. This is mandatory as you cannot file returns without activating this link.
The Aadhaar number must be mentioned while filling the ITR Form. Without the Aadhaar number, the return cannot proceed further. If you don’t possess an Aadhaar card, it is advisable to apply for it and mention the enrolment ID in the ITR Form.
Abiding by Law and Submitting All Bank Accounts
It is against the law to conceal any earning from the Income Tax Department. As a citizen of India, it is your duty to report any extra income gained from other sources, apart from the salary. The latest initiatives taken up by the Department of Income Tax make it compulsory for taxpayers to submit bank account details of all the accounts they have in various banks (except for the bank accounts which you haven’t operated for more than three years). This practice will eliminate tax evasion — the consequences of which subsequently lead to higher tax imposition upon the honest taxpayers.
The Income Tax department has also furnished a new column wherein, all ITR Forms must produce a report on the cash deposited into bank accounts during the demonetization period (November 9th, 2016 to December 30th, 2016) if the cash deposited were more than Rupees 2 Lakhs.
Inculcate a Good Habit of Reporting Exempted Income
In the previous ITR form, there was just a single column for filling the exempted income, but the new version of the ITR form has separate columns to specifically mention the dividend income under Section 10(34) and long-term capital gains exempted under Section 10(38).
This means that even if your taxable income is below the INR 2.5-lakh mark, you must e-file for tax returns if your long-term capital is more than INR 2.5 lakh.
Cataloguing of Income Earned from Interest
All the interest you earn from savings account under fixed deposits at banks, post office etc. must be furnished during Income Tax Returns filing. This disclosure is mandatory for documentation and if TDS has been already paid from your income, it can be claimed from the total amount of your payable tax.
Either E-verify or Send the ITR V Acknowledgment Before Due Date
You have two options — either to send the ITR V acknowledgment to CPC, Bangalore within 120 days from the day of filing of the returns or follow the simpler option of e-filing the returns with the assistance of All India ITR. There is no requirement for the acknowledgment if the verification has been processed online, which means e-verification via Net Banking, Bank Account Number, Aadhaar number and Demat Account.
By Vikas Dahiya is the founder and CEO of All India ITR, a government authorized E-filing intermediary based in Gurgaon.