A step-by-step guide to file tax return. This post explains in detail how to file your tax returns onlinewhile seated comfortably at home/office. Here are some simple steps to get your tax figures right...
Step 1:
Few warm-up questions before start!
Q. I have a permanent account number (PAN). Do I still need to file I-T return?
A. Just having a PAN number does not mean that you need to compulsory file your tax return.
As per Income Tax Act, you are required to file a “Return of Income”,
if your taxable income exceeds Rs 2 lakh in a particular financial year.
However, you need to have a PAN in order to file tax returns. It’s like
having a driving licence does not mean that you have to compulsory
drive but if you want to drive then you must have a driving licence.
Q. Who needs to file Income Tax return?
A. As seen above, everybody earning more than basic exemption limit need
to file his or her return and till last year, two assessment years
salaried taxpayers earning less than Rs5 lakh p.a. and having income
from interest less than Rs10,000 p.a. were exempted from filing Income
Tax return. This said exemption is not extended to this assessment year
as seen in my previous article.
Q. What are the benefits of filing income tax returns (ITR)?
A. Filing returns or not has never been a choice as it’s a legal
obligation and must be fulfilled by everyone who falls under the
prescribed category. Though apart from a legal obligation, filing tax
return is always helpful in the following situations:
- For availing loan facility like home, or personal.
- For visa and immigration processing
- You can use it as an income proof/ Net worth certificate
- For claiming excess tax paid via refund
- Applying for a higher insurance cover
- And last and most important is your peace of mind
Q. My tax is already deducted at source by my employer and paid to the government, then why do I need to file tax return?
A. Although tax has been deducted and there is no further liability to
pay tax, you have to compulsorily file your income tax return if your
income exceeds the basic exemption limit. It will work as a declaration
to the government that you have derived only income from salary or any
other source, for e.g. getting NOC from library on leaving college even
though you had not stepped inside library once.
Q. I have not been able to submit my Investment details
for e.g. life insurance premium etc. to my employer and excess tax has
been deducted. So can I still declare & claim the benefit?
A. Yes, you can claim these benefits while filing Income Tax returns and can submit your refund claim.
Step 2:
Know your situation!
First determine sources of your total income. Does your income comprise
only salary and interest on savings bank account or you also earn rental
income, capital gains or income from any other source? Let’s see
different heads and “Sources of Income” as per the Income Tax Act:
- Salary
- Rental income from house property
- Profit & gains from business or profession
- Capital gains on sale of shares or mutual funds or capital assets
- Other sources like bank interests etc.
So you need to add income under each “Head” and then compute your taxes.
Don’t forget to include income received by your minor kid. A minor is
not required to file a separate return of income but income arising on
account of let’s say interest on FDs in the name of your minor kid needs
to be clubbed in parents income.
Step 3:
What are the documents you need to arrange before you start filing?
Form No.16: Issued by your employer summarizing your income from salary and tax deducted at source.
Form No 16A: Issued by all the payers who have deducted tax while making payment to you during the year. For e.g. banks where you have FDs.
A/C statements: All your operating accounts during the year for arriving at interest income earned during the year.
Property details: If you have bought any property or put up
existing property on rent then details for the rent received and
receipts of municipal taxes paid during the year would be required. If
the same is purchased through a loan then copy of loan certificates for
interest & principal.
Contract notes: For sale and purchase of shares during the year for calculating capital gains.
Tax challan: Details of tax payments made during the year in case you have made advance tax orself assessment payments.
Others: Any other documents for a financial transaction involving tax implications for computing your taxes.
Important Point: You don’t need to submit any of these copies to the I-T
department at the time of filing and even originals are also not
required to be given to your CA, if you are taking professional help.
These documents are required to help you prepare your tax computation
and you do need to keep these copies ready in your file/records in case
if IT department asks you to furnish the same at a later stage.
Step 4:
How to file Income Tax return?
If your income is more than Rs 5 lakh then you need to compulsory file
your returns online and persons earning less than Rs 5 lakh have an
option to file their return online or via physical mode. Manual filing
can be done through the special desks set up by the I-T department.
Let’s see how can you file your returns online by sitting at your home.
Step by step guide to file Income Tax returns online
1. You need to go to the I-T department’s official website
2. You can see an image at the centre “e-file your tax return” and a click button option: e-file>>, click on the same
3. If you are filing it for the first time i.e. you have never e-filed
your returns you will need to register first, with the site and create
a user name and password.
4. You will need your PAN card number for the same. Your address details
are extracted from the PAN. You must enter personal details carefully.
By uploading XML File
5. Now select the appropriate ITR form
6. Download the Return Preparation Software (Excel Form) based on your sources of income.
7. Then fill up all the mandatory fields in the form, particularly ensure that you have written your PAN number correctly.
8. Then pressing the ‘Calculate Tax’ button/tab on the form tells you
how much tax you need to pay or how much refund you will get.
9. If there is any tax to be paid then make an online payment and generate the challan counterfoil.
10. Then pressing the ‘Validate’ button on top of each form tells you whether you have filled up the forms correctly.
11. Once validated, press the ‘Generate XML’ button on the top right of
the form and an XML version of the form gets created on your PC.
12. After checking the details of your ITR click on ‘Submit return’.
13. Select the XML file and click ‘Upload’. Once the uploading is successful it will be acknowledged on the screen.
14. Click on ‘Print’ to get a copy of the ITR-V form.
By 'Quick e-File ITR' or 'Quick e-File ITR-I and ITR-4S online'
1. Select 'ITR Form Name'
2. Select Assessment Year
3. Select appropriate circle in 'Prefill Address with'
4. Select YES/NO for 'Do you want digitally sign?' Then click submit.
5. Now read the Instructions carefully.
6. USE ARROW BUTTON to go forward or backward. Don't press Back/Forward button of your browser.
7. Always click 'Save Draft' button to save your work.
8. Fill every field carefully and click 'Submit' finally.
9. Download acknowledgement and open this pdf file with password as your pan no. and date ex. xxxxx9999x31121980 [PANNUMBER&DDMMYYY]
If the return has a digital signature then the filing process is complete upon the acknowledgement notification.
But if it does not have a digital signature then the ITR-V form needs to
be printed. ITR-V is an acknowledgment as well as a verification form
and all the details need to be filled in and verified. The taxpayer has
to fill-up the verification part and verify the same.
A duly verified ITR-V form should be mailed to “Income Tax Department –
CPC, Post Bag No – 1, Electronic City Post Office, Bangalore – 560100,
Karnataka,
BY ORDINARY POST OR SPEEDPOST ONLY within 120 days after the date of transmitting the data electronically.
Step 5:
Mistakes to avoid while filing Income Tax return:
1. Selecting the wrong ITR form:
This is the first thing you have to be careful about as if you make a
mistake in choosing the right form, the entire exercise of filling will
be of no use. Please carefully select the form applicable to you.
2. Not filing online returns if you earn over 5 lakh:
The government has made it compulsory for the individuals with an income
of more than Rs 5 lakh to file tax returns for the financial year
2012-13, so make sure that you file your returns if your gross total
income is more than Rs5 lakh.
3. Providing incorrect details:
Since all the necessary information is communicated by the IT dept. via
email or post, it is extremely important to enter these details
correctly. For your physical address, it is always safer to give a
permanent address instead of your rented accommodation. In fact, email
is a preferred route for communication for the income-tax dept. Avoid
giving your office email id; instead give a personal email account id,
which you can continue to use even after changing your job and once your
official mail id ceases to exist.
4. Not reporting all the sources of income:
Many taxpayers fail to report all the sources of their income. The most
common is interest earned on a bank savings account & on FDs. Though
for the current year interest up to Rs. 10,000/- on savings a/c is
exempt from tax (not on FDs).
5. Declare both or multiple Form 16:
As seen in my previous article, please compute your taxes by including income from all the employers in case of change in job.
6. Not sending ITR-V before deadline:
You need to send ITR-V copy by ordinary post or Speed Post only to CPC
Bengaluru within 120 days from the date of electronic filing in case you
have e-filed your return without digital signature. The process of
filing is complete only when you send ITR-V & it gets accepted at
CPC office, Bengaluru.
Troubleshooting to get new password on incometaxefiling website
Last two years' relaxation from filing the return for salaried person is
also caused a resulted the use of forget password option. Retrieval of
new password is also easy as filing online return:-
1. Click on forget password Link
2. Enter your PAN on Screen which appears after above click, Captcha Image as shown on screen and Press OK.
3. Please select on of the three option which appears after the above click adjoining circle
- Enter Secret question answer
- Upload Digital Signature Cirtificate
- Enter e-filed Acknowledgement Number [only for last two assessment years] and Bank Account Number
4. Once you fill the required details as per the choice of option you
opted you will be able to either reset of recover your password for your
account on https://incometaxindiaefiling.gov.in/portal/index.do.
5. Under First two options you can reset the password online , while in
3rd option password will be mailed to your registered email id.
6. If you're not able to reset the password with any of the three
options above, please send an email to -validate@incometaxindia.gov.in
with the following details:
PAN
PAN holder's Name
Date of Birth/Date of Incorporation
Father's Name
Registered PAN address
ex:
xxxxx9999x
XYZ KUMAR
31/12/1980
VYX KUMAR
H.No. 8, XYZ Building, ABC Nagar, New Delhi, India
Your password will emailed you within 24 hours, in my case within two hours.
Few misconceptions about Income Tax:
I need a CA to file my returns as filing taxes is a complex process!
With technology becoming so advance gone are the days when you have to
fill up the form manually and running from pillar to post to get the I-T
dept. “Stamp”. Now you can easily file your returns online and that too
free of cost through I-T dept’s website.
Maximum deduction for the interest which I pay on my home loan is only up to Rs. 1,50,000 p.a.!
This is correct but only for the house which is “Self Occupied” as for a
property which is put up on rent, the entire interest paid on the loan
can be claimed as a deduction from your income on house property without
the restriction of Rs 1,50,000/-.
Benefit for reimbursement of Medical bills submitted to employer & Mediclaim (Health Insurance Premium) is same!
Medical reimbursement by your employer for an amount up to Rs15,000 p.a.
is different from the amount of premium you or your employer pays
towards mediclaim policies & deduction for the same is available
under Section 80D. Both these exemptions are covered under different
sections of the Income Tax Act and you can enjoy benefits for both.
I can avail benefits of section 80C only by making certain investments!
Apart from investing in saving options as listed u/s 80C you can also
claim deductions for certain expenses like school or university tuition
fees you pay for your children, repayment of principal on home loan and
stamp duty & registration charges on buying a house.
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