5 tips to remember when filing your income tax returns before 31st July 2018

Apr 02, 2018 | 6 months ago | Read Time: 3 minutes | By iKnowledge Team

From keeping your finance documents in place to mentioning your Aadhaar details, here’s a list of things to keep in mind for filing returns.

The recent financial reforms have made its intentions clear and served as a warning for taxpayers to comply with taxation rules. The Government is coming down hard on defaulters, and non-compliance will result in penalties. What’s more? Accurately filing your returns will also help when you want to avail loan facilities, visa processing, carry forward losses or adjust capital gains made in subsequent years, get a high life cover and more.

The IT department has provided 31st July 2018 as the deadline in case you wish to revise the returns already filed for FY 2016-17 and FY 2017-18. To avoid any glitches and make the filing process smooth and seamless, here are some of the important points you need to keep in mind, before you file your returns:

Choose the correct ITR form for filing

Filing returns using the wrong form is a common mistake made by taxpayers. The existence of multiple forms and determining the right one applicable to you can get confusing. So, to choose the right form, remember, your income sources will determine which form is applicable for you. Here’s a quick guide for you to determine the eligibility for the type of ITR form:

ITR-1

ITR-2

ITR-3

ITR-4

ITR-5

ITR-6

ITR-7

For income below Rs. 50 lacs

For income above Rs. 50 lacs

For income above Rs. 50 lacs

For income earned under section 44AD, section 44ADA,

Section 44AE

Applicable for LLPs (Limited Liability Partnership), AOPs (Association of persons) and BOI (Body of Individuals)

Applicable for companies who do not claim exemption under section 11

Applicable for individuals or companies who claim returns under Section 139(4A)

Section 139 (4B)

Section 139 (4C)

Section 139 4(D)

Salaried/Pensioners

Filing capital gains

Individuals who are partners in a firm

     

Owns one house

Works as a partner in a firm

Has a business not under proprietorship

Small business men and traders who have a business under proprietorship

     

Earns income from other sources

Has foreign income

       

 

Earns from agricultural income of up to Rs. 5000

       

Includes 2 pages

Includes 7 pages

Includes 7 pages

Includes 21 pages

Includes 1 page

Includes 11 pages

Includes 17 pages

Mention your Aadhaar ID while filing returns

Aadhar is effective to detect and catch defaulters. It is important you mention your Aadhar details while filing returns. In case you have applied for an Aadhar, but haven’t received it yet, the acknowledgment number suffices. The Finance Ministry has made it mandatory to link your PAN to your Aadhaar, so make sure you have done the needful.

Keep all your financial and tax related documents in order

You don’t need to submit any financial documents to the IT-department. These are only required for your own or the reference of your Chartered accountant or tax professional (if you’re enlisting their services) for accurate computation of your total taxable income. These documents include form 16 and form 16A, account statements, property details, contract notes, tax challans (details of tax paid in advance) and any such documents with tax implications. Having these documents, ready and in order, will also be useful when you want to claim any eligible tax refunds, etc. and in case you’re asked to furnish them by the tax department at a later stage.

Mention cash deposits made after demonetization of Rs. 500 and Rs. 1000 notes

If you have deposited any amount in cash exceeding Rs. 2 lakhs in any of your bank accounts, you need to report it, including the details in your returns. This is because, undisclosed amounts of cash could bring you under the scrutiny of the IT department. If you fail to mention it, you will also be attracting a very hefty penalty.

Remember if these deposits are a part of your ‘unaccounted income’, negligence in filing your returns, will make you liable for tax @60% on such undeclared income, plus a penal and interest charge.

Ensure your income is accurately computed from all different sources

Are you a salaried employee or a self-employed professional or earning income from investments? Determine your sources of income. This is the first step towards computing your total income and claiming dedications as applicable.

The different heads of ‘sources of income’ are as follows-

  1. Salary,
  2. House property,
  3. Profits and gains from business and profession
  4. Capital gains on sale of assets and shares
  5. Income from other sources like bank interests.

Calculate your total income generated under each of these heads before you proceed to file your returns.

Bottom line

Filing your tax returns before the deadline and in an accurate manner will help you avoid any penalties or problems in the future with the IT-department. It’s a fairly simple process but you must be careful, wise and exercise immense caution while filing them.


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