Though filing of income tax returns is a process to be done every year. But one should be aware of changes made by the government in the income tax return forms in order to minimise the chances of error and rework. Here are six things that you should keep in mind before filing returns.
Link Aadhaar with PAN
This is the most important change introduced by the government for filing return this year. Your Aadhaar must be linked with your PAN, otherwise you cannot file your returns.
Also you need to mandatorily quote Aadhaar number in the ITR Form. If you do not possess Aadhaar card but have applied for it, the enrolment ID can also be quoted. Aadhaar number is a 12-digit number whereas Aadhaar enrolment ID is a 28-digit number. New income tax return forms have a 28-digit column for quoting the Aadhaar number.
File your returns online and pick the right ITR Form applicable
Returns can be filed offline or online. Paper return(offline) can be filed only by an individual and HUF whose income does not exceed Rs 5 lakhs and who has not claimed any refund in the return of income or an individual at the age of 80 years or more at any time during the previous year. In all the other cases, return has to be filed online on income tax e-filing website. Online filing reduces chances of error and rework. There are mandatory checks to make sure you make no mistakes.
There have been some major changes in ITR forms this year. For instance, people who have filed ITR4 last year are now required to file ITR3 this year and those who filed ITR3 last year have to file ITR2 this year. So, make sure you choose the correct form. Also ITR1 has been made as a simplified one-page form applicable for the salaried individuals with incomes up to Rs 50 lakhs to make the e-filing simpler and easy.
Reporting all bank accounts
The income tax department has made it mandatory for taxpayers to report all their bank accounts held at any time during the previous year in their tax return. You must provide name of the bank, IFSC code, and bank account number and mention whether its savings or current account. Remember to mention all your bank accounts. You can omit dormant bank accounts, which have not been operational for the past three financial years.
Also, it is mandatory to disclose the cash deposits made during the period of demonetisation. A new column has been introduced in all ITR Forms to report on cash deposited by taxpayers in their bank accounts during the demonetization period, i.e., from November 9, 2016 to December 30, 2016. However, taxpayers are required to fill up this column only if they have deposited Rs 2 lakhs or more during the demonetisation period
Report Exempt Income
Earlier there was a single column to report your exempt income. New columns have been inserted in the ITR forms to specifically report dividend income and long-term capital gains exempt under Section 10(34) and Section 10(38) respectively.
It is mandatory to e-file tax returns for those with long term capital of Rs 2.5 lakhs or more, even though their taxable income may be below 2.5 lakhs.
List all sources of income including Interest Income
Almost all of us have bank accounts, fixed deposits, and some of us also hold post office savings account. All of these earn interest which must be reported in your total income while filing return. But many tax payers do not report this interest income in returns thinking that since tax has already been deducted by the bank. But even though TDS has been deducted on any of your income, it has to be disclosed in your return.Though you don't have to pay tax again on it, whatever TDS has been deducted on it can be claimed as a deduction from your total tax payable amount.
E–Verify your return or send the ITR V acknowledgement on time
The process of filing return does not get completed till the returns are verified. The govt gives you the option of either sending theITR V acknowledgement within 120 days of filing the return to their office or you can e -verify your returns online also. If you e – verify the returns online, then there is no need to send the acknowledgement. There are various options given by the government for e-verifying your returns. E-verification can be done through Net banking, Bank Account Number, Aadhaar number and Demat Account.Suggest a correction