It’s the season of taxes and most individuals are running from pillar to post to figure out how to do things right! Well, if you are planning to file your tax returns for the very first time, and are looking for information on the same your search ends here as we have a comprehensive guide that will tell you all you need to know about filing income tax returns.
Who needs to file income tax returns?
Normally there is a lot of confusion about who needs to file returns, here’s a list of people who need to file retuens:
- If you are an individual whose gross income is ₹ 2.5 lakhs per annum and above you need to file returns. If your income exceeds ₹ 5 lakhs e-filing is mandatory.
- If you are senior citizen aged between 60-80, you need to file returns if your gross income is ₹ 3 lakhs and above
- If you are a super senior citizen above the age of 80 you need to file returns only if your gross income exceeds ₹ 5 lakhs.
What’s the last date to submit returns?
The last date to file returns for the financial year 2015-16 is July 31st 2016.To avoid a last minute rush job, it is highly recommended that you finish the process earlier. If you have taxable income in 2015-16, this year is referred to as the financial year and the year in which you file income tax returns for the same is referred to as the assessment year.
Documents you will need
- Form 16 – If you are a salaried individual, you will need this form. It is issued by your employer to certify that you have drawn a salary for the financial year and tax has been deducted at source (TDS) for the same.
- Form 16 A – Form 16 A bears witness to any other income you have may have earned during the financial year. So you need to collect this form from your bank because it deducts TDS from your interest income. Also if you are a homeowner, do not forget to collect this form from your tenant, if he is deducting TDS on rent.
- Other income – All income that cannot be classified under the heads of salary, capital gains, property or business and profession must be categorised as ‘Other Income’ from other sources. These are:
- Apart from interest income, dividend income, loans and deposits, winning from lotteries, income incurred from furniture or machinery put in rent, gambling and even any sum of ₹ 50,000 or above that has not been received as an inheritance or on the occasion of one’s marriage is also classified as other income. You therefore need to keep the document proofs of one of more of the incomes incurred from the above mentioned sources.
- If you have incurred income on any immoveable property or capital assets based offshore, you need to report and show income proof from the same.
- If your income is above ₹ 50 lakhs you are also required to provide details of your other assets such as jewellery, cash and land or property, so ensure that you have details of the same handy.
- Finally, if you have a home loan or a student loan, keep your loan documents and bank statements handy as deductions will apply to your case.
- Form 26AS – This is the statement of your tax credit that shows that all your tax has been received on time by the Income Tax Department.Details of your tax deductions as well as high value transactions are recorded in this form. You must check this form for errors before you begin filing income tax returns for the year. In case of any error, corrective action must be taken immediately.
As per section 139(1) of the Income Tax Act, 1961 in the country, individuals whose total income during the previous year exceeds the maximum amount not chargeable to tax, should file their income tax returns (ITR).
|INCOME TAX RETURNS|
The process of electronically filing income tax returns is known as e-filing. You can either seek professional help or file your returns yourself from the comfort of your home by registering on the income tax department website or other websites. The due date for filing tax returns (physical or online), is July 31st.
Who should e-file income tax returns?
Online filing of tax returns is easy and can be done by most assessees.
- Assessee with a total income of Rs. 5 Lakhs and above.
- Individual/HUF resident with assets located outside India.
- An assessee required to furnish a report of audit specified under sections 10(23C) (IV), 10(23C) (v), 10(23C) (VI), 10(23C) (via), 10A, 12A (1) (b), 44AB, 80IA, 80IB, 80IC, 80ID, 80JJAA, 80LA, 92E or 115JB of the Act.
- Assessee required to give a notice under Section 11(2) (a) to the assessing officer.
- A firm (which does not come under the provisions of section 44AB), AOP, BOI, Artificial Juridical Person, Cooperative Society and Local Authority (ITR 5).
- An assessee required to furnish returns U/S 139 (4B) (ITR 7).
- A resident who has signing authority in any account located outside India.
- A person who claims relief under sections 90 or 90A or deductions under section 91.
- All companies.
Types of e-Filing:
- Use Digital Signature Certificate (DSC) to e-file. It is mandatory to file IT forms using Digital Signature Certificate (DSC) by a chartered accountant.
- If you e-file without DSC, ITR V form is generated, which should then be printed, signed and submitted to CPC, Bangalore by ordinary post or speed post within 120 days from the date of e-filing.
- You can file e-file IT returns through an E-return Intermediary (ERI) with or without DSC.
Checklist for e-Filing IT Returns
There are a few prerequisites to filing your tax returns smoothly and effectively. Major points have been highlighted below.
- How to choose the right form to file your taxes electronically
It can be confusing deciding which form to submit when filing your tax returns online. The different categories of Income Tax Return (ITR) forms and who they are meant for are tabulated below.
|ITR 1 (SAHAJ)||Individuals with income from salary and interest|
|ITR 2||Individuals and Hindu Undivided Families (HUF) not having income from business or profession|
|ITR 3||Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship|
|ITR 4||Individuals and HUFs having income from a proprietary business or profession|
|ITR 4S (SUGAM)||Individuals/HUF having income from presumptive business|
|ITR 5||Firms, AOPs,BOIs and LLP|
|ITR 6||Companies other than companies claiming exemption under section 11|
|ITR 7||Persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D)|
- Check your tax credit – Form 26AS vs. Form 16
cYou should check Form 26AS before filing your returns. It shows the amount of tax deducted from your salary and deposited with the IT department by your employer. You should ensure that the tax deducted from your income as per your Form 16 matches with the figures in Form 26AS. If you file your returns without clarity on errors, you will get a notice from the IT department.
- Claim 80G, savings certificates and other deductions
You can claim extra deductions if you forgot to claim them. Similarly, you can also claim deductions under section 80G on donations made to charitable institutions.
- Interest statement – Interest on savings accounts and fixed deposits
A deduction for up to Rs.10,000 is allowed on interest earned on savings accounts. However, interest earned on bank deposits, if any, forms a part of your taxable income and is taxable at applicable slab rates.
In addition to the above, have the following at hand.
- Last year’s tax returns
- Bank statements
- TDS (Tax Deducted at Source) certificates
- Profit and Loss (P&L) Account Statement, Balance Sheet and Audit Reports, if applicable
Ensure your system is equipped with the below.
- Java Runtime Environment Version 7 Update 6 or above
List of Required Documents for e-filing of tax returns
It is always good to stay a step ahead, especially when it comes to tax filing. The checklist provided below will help you to get started with the e-filing of tax returns.
- Bank account details
- PAN Number
Reporting salary income:
- Rent receipts for claiming HRA
- Form 16
- Pay slips
Reporting House Property income:
- Address of the house property
- Details of the co-owners including their share in the mentioned property and PAN details
- Certificate for home loan interest
- Date when the construction was completed, in case under construction property was purchased
- Name of the tenant and the rental income, in case the property is rented
Reporting capital gains:
- Stock trading statement is required along with purchase details if there are capital gains from selling the shares
- In case a house or property is sold, you must sought sale price, purchase price, details of registration and capital gain details
- Details of mutual fund statement, sale and purchase of equity funds, debt funds, ELSS and SIPs
Reporting other income:
- The income from interest is reported. In case of interest accumulated in savings account, bank account statements are required
- Interest income from tax saving bonds and corporate bonds must be reported
- The income details earned from post office deposit must be reported
- Form 16 in India
- Income Tax Slabs and Rates for Assessment Year 2016-17
How do I file e-Returns?
- Fill income tax returns offline and upload XML on the official website: IncomeTaxIndiaeFiling.gov.in
- Prepare and submit ITR 1 online.
Steps to follow to file Income Tax Returns:
Filing your income tax returns online doesn’t have to be a complicated process. Simply follow the below steps.
First, log on to IncomeTaxIndiaeFiling.gov.in And register on the website.
- Your Permanent Account Number (PAN) is your user ID.
- View your tax credit statement or Form 26AS. The TDS as per your Form 16 must tally with the figures in Form 26AS.
- Click on the income tax return forms and choose the financial year.
- Download the ITR form applicable to you. If you’re exempt income exceeds Rs.5,000, the appropriate form will be ITR-2 (If the applicable form is ITR-1 or ITR 4S, you can complete the process on the portal itself, by using the ‘Quick e-file ITR’ link – this has been explained below).
- Open excel utility (the downloaded return preparation software) and fill out the form by entering all details using your Form 16.
- Check the tax payable amount by clicking the ‘calculate tax’ tab.
- Pay tax (if applicable) and fill in the challan details.
- Confirm all the data provided in the worksheet by clicking the ‘validate’ tab.
- Generate an XML file and save it on your desktop.
- Go to ‘upload return’ on the portal’s panel and upload the saved XML file.
- A pop-up will be displayed asking you to digitally sign the file. In case you have obtained a digital signature, select ‘Yes’. If you have not got digital signature, choose ‘No’.
- The acknowledgment form, ITR Verification (ITR-V) will be generated which can be downloaded by you.
- Take a printout of the form ITR-V and sign it in blue ink
- Send the form by ordinary or speed post to the Income-Tax Department-CPC , Post Bag No. 1 , Electronic City Post Office, Bangalore, 560 100, Karnataka within 120 days of filing your returns online.
Steps to file ITR 1 Online:
Prepare and Submit ITR1/ITR 4S Online
You have the option to submit ITR 1/ITR 4S forms by uploading XML or by online submission
- Login to e- Filing application
- Go to ‘e File’ ‘Prepare and Submit ITR Online’
- Select the Income Tax Return Form ITR 1/ITR 4S and the assessment year.
- Fill in the details and then click the submit button
- After submission, acknowledgement detail is displayed.
- Click on the link to view or generate a printout of acknowledgement/ITR V form
Private portals:You could also make use of several websites to file your income tax returns online. The portals typically charge fees (Rs. 250 to 300) depending on the kinds of service they offer.
Things to watch out for while e-filing:
- If the same mobile number or email address is used for more than four taxpayers, you cannot file returns on the website, unless the required change is done. For instance, in some cases, more than five returns may be filed— yours, wife, mother, mother-in-law and the Hindu undivided family (HUF) of which you are the karta, the executor of a will.
- If your name mentioned in your bank documents or official statements is even slightly different from the one given in the PAN card, the portal will consider you a different individual. In certain instances, some individuals give their father’s name as their ‘middle’ name in their PAN card, but do not use it for their bank accounts.
- If a non-resident Indian has to file income tax returns, he will need both an India number and a foreign number.
Frequently Asked Questions: e-filing Income Tax Returns
- Can I file ITR online without an account on the Income Tax e-filing portal?A) No. You have to create an account on the portal to file your ITR online. It is an easy process – you have to register yourself by providing details such as user type (individual, HUF, companies, chartered accountants, agencies or tax deductors), your PAN, first and middle names and surname, date of birth, and fill in the registration form. If you already have an account but have forgotten password, you can generate it through the ‘Forgot Password’ option.
- How many days do I have to verify the Income Tax Return I filed online?A) You have to either send the ITR-V to CPC, Bengaluru, or verify it online through electronic verification code or Aadhaar-linked one-time password, within 120 days of e-filing the return.
- Can I e-verify my ITR instead of sending a hardcopy to CPC, Bengaluru?A) Yes. The Income Tax Department now allows you to e-verify ITR through an electronic verification code (EVC) or through a one-time password by linking your PAN and Aadhaar.
- Can I e-file my return before all my tax payments are done?A) You can only file your Income Tax Return – online or through an agency – after all your tax payments for the year are done. The deadline for filing ITR is July 31 of the year after the end of a given assessment year – that is, you get 4 months to file ITR. This helps you put your accounts in order and make sure all tax-related payments are sorted.
- Is it mandatory for me to do the e-filing or can I depute it to someone?A) You can seek the help of chartered accountants and agencies dedicated to ITR filing. It is wiser not to allow anyone to have your PAN and password in order to prevent any kind of fraud.
While you may feel that a large part of your income is taxable, you must know that there are several deductions you can avail according to the tax bracket that is applicable to you.
Filing one’s income tax returns is not as difficult as it is made out to be. If you carefully collate all the documents and keep them in order, you will be able to e-file your returns in a few minutes!!!
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