Quick Guide to Filing your Income Tax Returns
As July winds to a close, the question being asked everywhere is: “Have you filed your tax returns?” The last date for filing individual income tax returns is a few days away. Individuals scrambling to file their returns in the last minute may find the official site for online filing gets overloaded at this time. Do look out for some authorized private sites where you can also file.
Once you have found the right website, the rest is straightforward. It’s always wise to have everything in order, not only for your own records, but also because the government is getting increasingly stringent in their policies and have proposed to levy penalties on the income of defaulting tax payers.
After filing taxes every year, have you paused to consider why you need to do it by 31 July? Why is it important to file your taxes on time?
1. To claim refund: If you have a refund due from the Income Tax Department, you will have to file returns, without which you will have to forgo the refund.
2. To carry forward losses: If you do not file returns, you will not be able to carry forward capital losses (short-term or long-term), if any, in a financial year to be adjusted against capital gains made in the subsequent years.
3. Visa processing: If you are traveling overseas, foreign consulates ask you to furnish ITR receipt of the last couple of years at the time of the visa interview.
4. Loan Application: If you plan to apply for a loan in future it is a good idea to maintain a steady record of filing returns.
5. Revised returns: At times, we make mistakes while filing our income tax return. These mistakes need to be corrected, or the return filed by us would be rejected and we may attract a penalty. In case the assesse hasn’t filed the original return, he cannot subsequently file a revised return, even when he really needs to.
Remember, while filing your income tax returns, to:
1. File your return on time so as to avoid and delay penalty.
2. Pick your correct form: There are different Indian Income Tax Return (ITR) forms. Depending on the various income heads, make sure you select the correct form (Form No. ITR-1, ITR-2, ITR-3, ITR-4, ITR-4S ITR-5, ITR-6, or ITR-8) accordingly.
3. Check your Form26AS balance: Form 26AS provides details of all taxes deducted on any income sources for the respective PAN account. It’s therefore very important to compare your Form 26AS and the income tax return for tax deducted and income sources details.
4. Link your Aadhaar to your PAN: From 1 July 2017, the government has made it mandatory to link Aadhaar and PAN before filing.
5. Disclose details correctly: All details (viz., name, address, Aadhaar, bank details, income details, etc) must be appropriately and accurately mentioned. Be careful not to make any mistake, or you may get an automatic notice issued in your name.
6. Disclose foreign income: In case you have any foreign assets and/or liabilities, these details must be properly disclosed. Make sure you maintain good records of all supporting documents for any such income disclosed.
7. Submit e-acknowledgement of returns filed: Filed your returns online? Congratulations. The mandatory next step is to submit the ITR-V form generated to the income tax officials within 30 days of filing the returns; if you don’t your return filed will be treated as equal to non-filing of returns.
Naturally, the next question is: How do you e-verify your return? In one of the following six ways:
• EVC received in Registered Mobile Number and email (the Electronic Verification Code (EVC) is a 10 digit alphanumeric code which can be generated through the e-Filing portal and is valid for 72 hours)
• Aadhaar OTP
• Login to e-Filing through Net Banking
• EVC through Bank Account Number
• EVC through Demat Account Number
• EVC through Bank ATM
Choose whichever method is appropriate for you. Follow the user-friendly instructions to complete the entire process. And once you’re done, breathe a sigh of relief. You have done your work as a responsible citizen of this country!
For easy filing of your taxes, head to our partner’s website.