Income tax returns are the most imaginative fiction being written today, said Herman Wouk, the Pulitzer Prize-winning author once. But, when it comes to filing your ITR, make sure you leave no room for goof-up, even if they are done inadvertently. That's why we bring you these six things to never fail while filing returns.
Should you file returns at all?
There are many who think just because their income is not taxable they don't need to file returns. Even if you owe zero tax or have paid all your taxes or your company has cut the required TDS, you still have to file your returns. You need to file returns if your gross taxable income is above the basic exemption limit. This limit is Rs 2.5 lakh for regular taxpayers, Rs 3 lakh for senior citizens (above 60) and Rs 5 lakh for very senior citizens (80 plus).
Do not choose the wrong form
The forms for filing returns change almost every year. Check before you just use the form you filled in last year. After all, it's quite possible your financial situation changed this time around. Here's a quick update on which form to use this year.
ITR 1
This is for people with,
* Income from salary/ pension.
* Income from one house property.
* Income from other sources (interest, etc)
Keep in mind as per thenew rules, if your income is above Rs 50 lakh, this is not the form.
ITR 2
This is for people who have:
* Income from salary/pension
* Income from house property (income can be from more than one house property)
* Income from capital gains/loss on sale of investments/property (both short term and long term)
* Agricultural income more than Rs 5,000
* Income from other sources (lottery wins, legal gambling wins)
* Income of a person as a partner in a firm (note that, there's a change this year- instead of ITR form 3, you now have to fill ITR 2)
* Foreign assets
ITR 3
Use this form if you:
* Are an individual or HUF with income from proprietary business or profession
* Have income from house property
* Have income from salary, pension and other sources
Keep in mind that you don't gave to fill this form if you have presumptive taxation.
Don't forget to mention Aadhaar
There' is too much politics around Aadhaar, but when it comes to filing your returns, make sure you mention it on the form. It's compulsory if you have an Aadhaar card. Those who don't have it yet need not panic. But, if you have an Aadhaar and don't mention, you could get into trouble. The income tax department seems to be sending notices to those who have done this. Why get in their radar? Just remember to mention that number without fail.
Filing multiple ITRs for multiple Form 16s
Changing jobs is very common these days, which means you may have multiple Form 16s. One mistake many make is filing separate ITRs for each Form 16, instead of showing all Form 16s in a single return.
Also make sure you submit all the relevant Form 16s. If your past employer has deducted tax too, there's a good possibility you might qualify for a refund.
Failing to claim deductions
One very common mistake is failing to claim tax deduction under Section 80 TTA, which was announced in the Union Budget a few years back.
According to this section, savings account interest income up to Rs 10,000 will get a tax deduction. Savings accounts held in banks and India Post come under the ambit of this rule. Keep in mind, the Rs 10,000 deduction is on the total of all bank accounts put together. You could miss out on a good tax benefit by ignoring this one.
Forgetting to disclose foreign assets/income
If you have a foreign bank account, you need to give its details in the ITR form. All details - right from the date of opening, to interest accrued, the current status of the account - have to be put in. Any goof-up here might bring you under the taxman's radar. If you were a student abroad and had an account in that country which is not yet closed, make sure you give the details.
These are just some tips. Keep tracking this space as we bring you more articles regarding returns filing.
