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With July 31 being the last day for filing Income Tax returns, tax assesses need to start getting their returns ready electronically.
In the last few years, things have become quite easy due to the e-filing process.
E-filing is mandatory for taxpayers with an income of over Rs 500,000 a year.
But before that you need to know the changes in the return form this year. Changes in return forms are brought about almost every year.
What’s new?
There are some changes that one needs to keep in mind.
For instance, form Income Tax Returns -- 1 or ITR-1 has space for first-time home buyers to claim deduction under section 80EE.
Those who took a home loan between April 1, 2013 and March 31, 2014 can claim an additional deduction of Rs 100,000 on the housing loan interest paid, that is, they can claim tax benefit for interest repaid up to Rs 250,000 instead of Rs 150,000.
However, the loan amount for this should be Rs 25 lakh (Rs 2.5 million) or less.
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The new form ITR-2 requires you to divide capital gains into several categories, based on the nature of the capital gains and the asset sold.
You will also have to furnish details of exempt allowances under Section 10.
ITR-2 asks for information on house rent allowance, leave travel allowance, tax paid by employer on non-monetary perks and other allowances.
Till last year, you only had to mention the sum total of all such tax-exempt allowances.
Says Milind Kothari, managing partner of BDO India LLP, “Non-corporate taxpayers were given an option to claim refunds through cheque or credit into bank account.
“With an intention to expedite and align the refund process with processes applicable to corporate taxpayers, the new forms have done away with the option of claiming refunds through cheque.
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“Accordingly, going forward, all taxpayers will now receive the legitimate tax refunds directly into their bank account.”
Hence, ensure you submit the correct bank details.
Non-corporate taxpayers claiming deduction for bad debts are now required to disclose their Permanent Account Number in tax returns of every debtor whose quantum of bad debt exceeds Rs 100,000.
TDS details
Before you get down to filing your tax return, check if the tax paid by you has been correctly credited.
Check you tax credit statement or Form 26AS to know the same.
Salaried individuals should match the TDS details in their Form 16 with those in the Form 26AS.
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Form 26AS is available on the I-Tax department's portal.
Says Sudhir Kaushik, co-founder and CFO of Taxspanner.com, an e-return intermediary, “Check if the tax deposited reflects in Form 26AS.
Also, pay the outstanding tax amount, if any, at the earliest.”
Is it the right form?
The form to be used for filing your tax return is equally important. Choosing the wrong form will lead to your returns getting rejected.
The simple ITR-1 is the most used tax form, but many assesses may not be using it correctly.
Last year, the Central Board of Direct Taxes had made it mandatory for taxpayers to use ITR-2 if their exempt income exceeded Rs 5,000 a year (see box).
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Where to file returns?
You can file returns either through the Income Tax department’s website or other sites such as I-T department authorised ERI Taxspanner.com, Taxyogi.com, Taxsmile.com, taxshax.com and myITreturn.com.
How to e-file returns?
Register with the tax filing site you choose and fill in your details.
There are various packages available with these sites.
For instance, Taxspanner.com’s e-file standard package is for employees who are interested in self-preparing and e-filing returns.
E-file Plus package is for those who want to e-file themselves, but would like to take assistance of a tax professional to enter data and review it.
The eFile Premium package is for those who want to keep their tax documents in a vault for up to eight years, in case of a scrutiny notice.
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WHICH IS THE CORRECT RETURN FORM?
ITR - 1 OR SAHAJ
USE IF YOU EARN FROM -
DON’T USE IF -
ITR - 2
USE IF YOU EARN FROM -
ITR - 3
USE IF YOU EARN FROM -
ITR - 4
USE IF YOU EARN FROM -
ITR - 4S or Sugam
USE IF YOU EARN FROM --
DON’T USE IF --
Issues in e-filing
Mistakes to avoid
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