Filing your tax return for the first time? Here are the things you should know before filing your income tax return.
1. Eligibility and Deadline to File Tax Return
Taxable income of an individual exceeds Rs.2.5 lakhs in a particular financial year is required to file the tax return. Taxable income of a salaried individual exceeds Rs, 5 lakhs, it is mandatory to e-file your tax return.
Every year July 31 is the date by which taxpayer suppose to file income tax return. Due date of filing income tax return for financial 2017-18 is 31 July 2018.
The tax return can be filed till 31 March next year. The delayed return for FY 2017-18 can be filled till 31 March 2019.
Disadvantage of Delayed Return
- Tax notice probability
- Unable to correct errors
- Delayed refunds, if any
- Interest on tax liability
2. Difference Between Assessment Year (AY) and Financial Year (FY)
The year in which you have earned income is called Financial Year (FY). The year in which the income is assessed or evaluated i.e. the year immediately following the financial year is called Assessment Year (AY).
The Financial year (FY & AY) starts from 1st April and ends on 31st March.
3. Selecting Correct Income Tax Form (ITR Form)
Before filing your ITR, you should know the ITR form applicable to you. Here is the list of all the ITR Forms and to what kind of incomes they are applicable:
- Any exempt income
- Income from one house
- Other sources (excluding racehorses & lottery)
- Agricultural income more than Rs. 5,000
- Everything from ITR-1
- Income from lottery and racehorses
- Income/loss from more than one house
- Everything from ITR-2A
- Foreign assets/income
- Loss on sale of investments or property/capital gains
- Everything from ITR-2
- Profit share from a partnership firm
- Everything from ITR-3
- Income generated from proprietary professions
- Everything from ITR-1
- Income from presumptive business
4. Check TDS Details
Form 26AS is your tax credit statement which shows all taxes received by the income tax department. You can access your Form 26AS from the tax department’s website.
It is extremely important to go through the Form 26AS to ensure that all due credits for TDS deducted from salary, FD interest, etc.are duly accountant for. Any shortfall of TDS reflected in the Form than what is actually claimable in the income tax will return to automatic generation of demand by Income Tax Department subsequent to filling of income tax return.
5 . To Know About ITR-V
ITR-V stands for ‘Income Tax Return – Verification’. It is a one-page document and summary of your tax return and received when you file your ITR electronically without using a digital signature.
Once e-filing is done your ITR-V needs to be sent to Centralized Processing Centre (CPC) Income Tax Department in Bangalore by post within 120 days of filling the ITR. or
E-verify your tax return using the bank account or Adhaar OTP within 120 days of filling the ITR.
6. Enter Correct and Complete Information
Income tax department communicates with you by email or phone only. You should always make sure that this two information is absolutely correct. Receipt of return form, refund processing alert, notice alert or all send through email or phone.
Ensure that you provide correct bank details. your bank account information is used by Income Tax Department to refund.
The government had recently made compulsory to link Adhaar number with your PAfN for filing income tax return.
List all your bank account details on the income tax return.
7. Document Required Before e-Filing
Make sure that you have all the required document before start filing income tax return. The documents required to file tax return are
Form 16 is provided by your employer to you used you can use it as a reference as well as proof while filing income tax return. The form has various details such as salary income components, TDS, tax paid by the employer to the income tax department.
Form 16A is also a TDS certificate. While Form 16 is for only salary income, Form 16A is applicable for TDS on income other than salary.
If you have bought any property or put up existing property on rent, then the details for rent received and receipts of municipal taxes paid during the year will be needed. If you have bought property by taking the loan, then you need to submit loan certificates for the interest and principal.
Capital Gain statements
It contains details about gains arising from the sale of shares, mutual funds or real estate and other capital assets during the financial year.
Through the tax challans, you will need to submit the details of tax payments made by you, if you have paid advance tax or self-assessment payments.
Bank statements of all your operating accounts are needed for arriving at interest income earned during the financial year.
Details of income from outside India
You also need to report details any income which is derived or earned from outside India and details of all the immovable property or capital assets held at any time during the financial year.
8. Declare all Interest Income
All interest income needs to be declared on your income tax return.