As you near the deadline for filing your returns for FY-17 (AY 2017-18), make sure you pay attention to changes in filing requirements this year and avoid the common mistakes that tax filers often make. You may end up delaying your refund or even pay penalty for such mistakes. Here are some points worth keeping a tab of before filing your returns
E-filing or physical filing?
If your salary income is greater than Rs 5 lakh then you will have to mandatorily go for e-filing.
People whose salary income is less than Rs 5 lakh but have other sources of income that takes the total income to over Rs 5 lakh will also have to do e-filing. In other words, if your total income for the year exceeds Rs 5 lakh (excluding savings bank interest if it is less than Rs 10,000) you will have to file online.
But you may still opt to file online. Remember, refund claims etc, may be processed faster when returns are filed online. You don’t need a digital signature to file online.
If you have a Aadhaar number you ought to be providing it for all returns filed after June 30, 2017. Instead of waiting to match it at the last minute, make sure that you link it right away. That way you will have time to rectify any mismatch that may arise. Your returns will be invalid in the absence of a linked Aadhaar number.
If you are an individual with salaried income then either ITR-1 or ITR-2 will apply to you. ITR-1 is applicable if you have an income up to Rs 50 lakh, one house property and other interest income. It will not apply if you have capital gains from property, gold, mutual funds or stocks or EPF/PPF withdrawals. In those cases, ITR-2 will apply. ITR-3 will apply for those individuals and HUF having income from a proprietary business or profession.
Whether you are filing offline or online, you will likely have TDS deducted by various sources- your employer or bank or a company. You can verify these with the Form 26AS credit statement generated by the tax department. In case you have never heard of this, go and register with the tax dept. or simply login to your internet banking account and you will likely see it in the menu. Click it and it will link you automatically to the Income Tax website.
This statement will show the summary of all tax deducted, including advance tax paid or any refund to be made etc. by various entities. Ensure that the individual TDS certificates or the amount mentioned in Form 16 tallies with this.
‘Verify’ your tax return
If you are e-filing your returns, it is not enough that you have filled out all the details and submitted them. You need to ‘verify’ the returns and send the documents to the IT department. You can either -e-verify your returns (through your bank account) or get a printed copy of your filing (ITR-V) and sign and send it to CPC-Bengaluru. Only then is the process complete.
There are some mandatory disclosures that the (respective) forms warrant for FY-17. Some of the noteworthy ones are:
• Cash deposits exceeding Rs 2 lakh made between November 9 and December 30 of 2016 have to be disclosed. Make sure you have checked all your bank statements to get this number right
• A separate section 10 (38) has been inserted to mention exempt Long-term Capital Gains Tax.
• Section 10 (34) needs to be used for exempt dividend disclosure from Indian companies.
• Section 19 C has been introduced to mention the PAN of the buyer of the immovable property exceeding Rs 50 lakh.
Until last financial year, you had 2 years (from the end of the financial year for which the original return was filed) to correct your returns and file a revised return. From A.Y 2017-18, you will get only 1 year to revise your return.
Report correct income
Last though not the least, make sure you report all your income and report the correct income. Here are a few examples of where you may also unknowingly get it wrong:
– Not filing interest on bank deposits, corporate deposits or other interest income just because no TDS was deducted on the same or they are below the TD limit. All interest income is taxable and must be disclosed
– Disclosing an imputed rental income on property if you have more than 1 property and are not really letting out the property
– Disclosing capital gains, whether exempt or not, on shares, mutual funds, property or gold