With the arrival of the last month to file tax returns without penalty, timely filing is to be ensured to avoid last minute rush and mistakes. Tax filing has become much easier and is no longer a monotonous and mind numbing process. The process has become much more convenient not only for e-filing of returns but also for tracking refunds and processing of returns online. In comparison to the number of tax-filers last financial year there is a significant rise in new tax filers by around 16% this year.Says CA Amit Kumar Garg.
What needs to be done?
- Systematize the documents – While filing for the first time, keep all the related documents intact by maintaining a separate file for all the relevant documents useful in filing the returns this year. Basic documents like Aadhar card, PAN along with the documents related to investments, income, bank accounts, assets and more will be required. As the supporting documents and details need to be filled there is no need to attach them along with the ITR form. Apart from salaried income, documents related to other sources like capital gains, rent income, foreign income or asset, also needs to be kept handy.
- Create e-filing account or login – Being a first time filer, an account needs to be created online. In case of already having an account, login to the income tax department’s website using the provided credentials like user name which is the PAN number and password (provided at the time of creation of account). After logging in to the e-filing account, choose the assessment year (AY) by clicking on ‘Filing of income tax return’ from the dashboard. Financial year (FY) is the one where people earn the income while the assessment year (AY) is in which they assess their income to file returns. The current AY being 2018-19, many may get confused with the FY, which should be 2017-18.
- Choose the appropriate ITR form – The main thing to keep in mind for regular filers is that government has made some critical changes in the ITR form for AY18-19 which needs to be kept in mind while selecting the form.
For instance, ITR 1 is applicable only to resident Individuals. ITR-2 is now applicable for residents but not ordinary resident and non-residents and not applicable for individuals who have profits and gains from any other profession or business, who are instead required to fill form
ITR-3. Moreover changes are also seen in ITR-4 for filing returns under presumptive taxation schemes for professionals and businessman. The form that earlier sought financial particulars like creditors, debtors, cash balance ad stock in trade, now seeks more details of the businesses including turn over as per the GST return, all sorts of loan (secured and unsecured), advances, fixed assets etc. to name a few.
- Fill new information – ITR forms this year seeks a lot of new information like salary break-up, house property income instead of single amount of income which was required earlier to be furnished in ITR-1. Aadhar number has also been made mandatory to electronically file ITR. For claiming capital gain exemption under section 54, 54B, 54EC, 54EE, 54F, 54GB and 115F in the new ITR form, the tax payer need to mention the date of transfer of original capital asset, which was missing in the previous forms and several others. Once all the details are carefully filled, the form needs to be uploaded for e-verification which can be done within a time period of 120 days from the date of upload.
In Cases of wrong ITR filing
Choosing the wrong ITR form can have consequences as per the tax laws which can be formidable. An individual tax payer has to cautiously choose from four ITRs as applicable, depending on the nature and quantum of income. Filing returns with wrong ITR forms are considered faulty and may attract penalty although there are provisions in law for return revision. For instance, if someone with an income of 50 lakh or more files returns under ITR-1 instead of ITR-2, they will be penalised for under-reporting their income, which may vary from 100-300% of the tax so determined.
To avoid such penalties and litigations with respect to filing of return, it is advisable either to hire or to take an expert opinion from experienced professionals like chartered accountant/s, for making return filing a cake walk activity.