Why is Income Tax Return Efiling an Important Exercise for Taxpayers?
In order to have an authentic record/proof of your income, the filing of income tax return is considered to be of utmost importance.
Being tax compliant has its own set of advantages. Apart from the fact that it provides easy access to good accomodation, good vehicles and good education, it also helps keep the Income Tax Department at bay. It is critical, especially if you are applying for loans, that you provide all your income tax returns along with receipts. If the return is NIL over a period of 3+ years, banks are highly likely to reject your loan application.
Mentioned below are a few hypothetical scenarios wherein Income Tax Returns act as a mandate:
- Applying for VISA and its subsequent processing.
- If you have a satisfactory track record of on-time filing of income tax returns, registering an immovable possession (such as a house) will be a hassle-free activity.
- You might not get the possession of a credit card if you have not been filing your income tax returns in a timely and accurate fashion.
- To establish a good rapport with the Income Tax Department, ensure that you file your IT returns on time, and without error.
Failure to comply with the rules of Income Tax Efiling can further lead to consequential losses in one’s short-term and long-term capital gains.
The benefits of Income Tax Return Efiling:
- Tax rebates and refunds are processed significantly faster: Manual filing of IT returns take relatively longer to get processed in comparison with efiling.
- An improved accuracy rate: With advance technology such as built-in validations in the efiling software, the scope for error is noticeably reduced.
- It is fairly convenient: From the space of your comfort, you can efile your income tax returns at any time and from anywhere.
- Records of your past filings are easily accessible: You have the complete liberty to go back and look at your past records of filing anytime that you desire.
- Highly confidential: With the age of digitisation and stricter security provisions, it has become increasingly difficult to hack into someone else’s database. Hence, there are reduced chances of your efiling data falling into the wrong hands.
- Usability is enhanced: The Income Tax Return efiling software is a fairly easy procedure, hence is extremely user-friendly.
Steps to Register Yourself on the Income Tax Efiling Website:
- On the Income Tax Department’s website, register yourself, along with providing your PAN details, full name and date of birth. The Permanent Account Number in this scenario will act as your user identification.
- Select the mode of Efiling. There are two ways that you can choose from. The first one includes downloading the required form first, saving it, filling up the information in all the essential spaces, then uploading the updated form back online. The second mode of efiling will require you to choose the ‘’quick e file’’ option and filling up the form online.
- In the next step, you will be required to choose your required forms from ITR 1 (for people who have a salaried income, or have money coming in from sources like properties and pensions), ITR 2 (for people who have short-term and long-term capital gains coming in) and ITR 3, 4 and 4S (for entrepreneurs, self-employed individuals and business owners)
- Your documents must be up-to-date and ready. Certain documents in the filing process of Income tax returns are an absolute mandate. These are - your PAN card, certificates of TDS, Form 16, investment details, and home loan proofs.
- Check and recheck the form once you have filled in all the information. This is applicable only when you are downloading the form, filling it offline, then uploading it back on the website.
- Verification of ITR V is the final step in the process. ITR V is generated and sent across to your email ID if you do not have a digital signature. In case you do have one, you simply have to the preserve the acknowledgment number that is generated upon submission of the form.
A comprehensive statement of credit that falls under Section 203AA of the Income Tax Act, 1961. Primarily, this statement is made use of to refer to an individual’s multiple tax deductions of the past from banks, investors and employers. Additionally, if an individual has a paid self-assessment tax or an advance tax at any point during the financial year, the corresponding details are mentioned in Form 26AS. In case you received any refunds from the Income Tax Department pertaining to the applicable financial year, the particulars of the same will also be mentioned in the form.
Top three ways to file Income Tax
There is a wide array of advantages that comes along with filing your IT returns on time and in an accurate fashion. Given below are three efficient ways of doing this:
- E Filing Web Pages: In the realm of tax filing, there are multiple intermediaries that assist an individual file their tax returns accurately. There is a whole range of e filing websites that operate as intermediaries and help taxpayers through the process comprehensively.
- E filing Mobile Applications: With modern machinery and cutting-edge technology, the need to make use of smart phones and appliances have increased tremendously. You can choose from a wide range of mobile applications that are designed to help taxpayers file their tax returns without hassle. However, a major proportion of these mobile apps are equipped to help file ITR 1 only.
- TRPs or Tax Return Preparers: Under the TRP scheme instituted by the Income Tax Department, a group of officials (TRPs) are assigned and appointed to help taxpayers make their way through the process of return filing. They are highly trained personnels who are well-equipped to file tax returns on behalf of the taxpayers.
Measures to take in case you forget the password to the IT department’s Website
It is vital to keep in consideration here that the website of the Income Tax Department does not provide any password recovery options (to recover the old password). However, in case you have forgotten your password, you can easily create a new one either through the website or by sending an official email to the department itself.
- Create a new password via Income Tax Department Website: Login to the website and select the option for ‘’forgot password’’. Enter your PAN details and the resultant ‘’Captcha Code’’, then proceed to click on the submit button. There are three ways after this that a new password can be created. You either ‘’answer the secret question’’, upload your certificate of the digital signature or enter your acknowledgment number (the one that you preserved during tax return filing) along with your bank account number.
- Create a new password by sending an official email to the Income Tax Department: If the above mentioned method does not work out, one can always send an email to firstname.lastname@example.org. In the email, you can request a password change along with the following information:
- Name of the Taxpayer
- PAN details
- Incorporation date or birth date of the taxpayer
- Name of the father
- Address of mailing
Benefits of Filing Income Tax Return with H&R Block India
- Tax savings are maximum: In order to maximise a taxpayer’s savings, personnels at H&R Block make efficient use of every deduction by staying upgraded and in tandem with the latest tax standards and norms.
- Filing process is rendered easy: In order to impart a smooth experience of Income Tax return filing, the officials at H&R Block determine individual tax complexities and then proceed.
- Your tax vault will have maximum security: With access only to the holder of the vault, a 24/7 security system ensures its safety thereby avoiding any collateral damage.
- Absolute transparency and accuracy: Careful scrutinisation of every minute detail ensures that you do not miss out on any aspect of your income tax return filing.
How to Pick the Correct Form for E filing Income Tax?
Choose from the below ITRs to determine which form to download during the filing process:
- ITR 1 - for salaried individuals, and people earning from sources such as pensions and properties.
- ITR 2 - for people who earn from long-term and short-term capital gains.
- ITR 3, 4 and 4S - for self-employed individuals, entrepreneurs and business owners.
- ITR 5 - AOPs, BOIs, LLPs and firms.
- ITR 6 - for organisations that are not claiming tax exemption under Section 11 of the Income Tax Act, 1961.
- ITR 7 - Individuals and firms falling under Sections 139 (4A), 139 (4B), 139 (4C) and 139 (4D).
Under this particular section, a deduction is available for taxpayers that make donations to the operations of the company. The benefactor could be a firm, an individual or a group of officials. 50% of the donation amount will fall under deduction from the taxable income, and thereafter tax will be calculated.
Things to know before filing IT Returns
- Complete assistance and help is always available.
- Make use of the ‘’message my tax expert’’ section to get immediate guidance.
- Errors and mistakes are handled by tax experts.
- In case you have forgotten to claim certain deductions in the corresponding Form 16, tax officials effectively ensure these are claimed when income tax returns are filed.
Income Tax Filing in India for a Hassle-Free New Year
As the New Year gradually unfolds its magic on the people of the nation, a fresh set of rules, regulations and income tax guidelines pave way for an easier, more convenient financial year 2018. As we carefully tread forward to the first month of the year, it almost seems like a painful reminder to file income tax returns for the year. Income tax in India comes with its own set of hurdles and hassles, although if taken care of in a timely manner, one can easily avoid additional tax payments in the future.
Income tax efiling is basically filing income tax returns on an online portal that encompasses all documents, and is therefore relatively more convenient than manual filing. Timely income tax efiling in India ensures that one accounts for incomes that might not be subjected to tax, in the future. A year old stock investment can be proposed as an example in such a scenario.
Attributes Surrounding Income Tax in India
- Forms Are More Comprehensible : New times, new changes. With the commencement of the new year, Income tax authorities have made slightly different, yet life-altering changes to the form. Introduction of a one-page ITR form makes it easy for individuals earning upto Rs.50 lakh and owning a single house property to file returns without a hitch. Multiple ITR forms (ITR-1, ITR-2, ITR-3) have all been amalgamated to form a single ITR-2. The new year also makes it mandatory for all individuals filing tax returns to provide the 12-digit Aadhaar number. In case of an absence of Aadhaar card, it is important to show the enrolment ID.
- Income Tax Filing has Become a Mandate : Income tax laws of the recent times clearly make it mandatory for any and every individual to file tax returns, provided their income is above the basic exemption limit. Moreover, a person who can easily be qualified as an ordinarily resident of India under tax laws, has to file his/her returns. Furthermore, the person has to meet with any one of the two conditions before filing his return. One, if he holds an asset, either as a nominee or otherwise or if he holds a signing authority anywhere outside India. Two, if anywhere outside India he acts as a beneficiary for a financial asset or interest.
- Benefits have Increased in Number : Not only do the tax laws demand a timely filing of income tax returns, but an individual also stands to benefit in a huge way, from doing so. Applying for housing, education or vehicle loans are rendered easy, and your application is processed smoothly, if you have been filing your tax returns on time. Banks often hesitate to issue credit cards if the history of filing tax returns is distorted in any way. You may also find it difficult to apply for visa, if you have not been filing your returns regularly. By filing returns on time, you are essentially creating a brilliant track record with the income tax department. This in turn helps you obtain a loan in a hassle-free manner. Your returns can also be frequently used as standard proofs of income (whenever required).
Repercussions of Not Filing Returns on Time
Income tax in India is a concept often greatly misunderstood by its people. Not complying with tax rules could land you in grave troubles, including penalising. The Union Budget, last year, proposed a certain amount chargeable to individuals filing their returns late. If a person files their return after the due date but before December 31st, an amount of Rs.5000 is charged. For any other scenario, the fee amount shoots up to Rs. 10,000. For individuals earning less than Rs. 5 lakh a year, the standard fee is Rs. 1000. Therefore, it is of critical importance that you start collating all the required data and fulfill the necessary obligation by July 31st, following the end of the financial year.
Filing Income Tax Return Without Form 16
As the deadline to file income tax returns gradually approaches at the end of each financial year, people frantically consider and then reconsider seeking the help of tax professionals. A thousand taxpayers all over India wait till the last moment to file their income tax returns, and hence run a very good chance of missing out on a number of elements.
Some of you might want to wait for your respective Forms 16, in order to be able to file your IT returns. One fact in the domain of Income Tax that still remains unknown is that one can file their income tax returns even if they have not received their Form 16. According to the Income Tax Act, 1961, if your employer is deducting TDS (tax deducted at source) from your salary every month, he/she will be liable to provide you with a certificate of the same. Additionally, an employer is also expected to accomplish this task before 31 May, every year. Failure to do so will in turn attract a penalty of Rs.100 (per default) from the employer’s end.
The reasons why you might not receive your Form 16 on time are varied. There isn’t one single reason for a company to not provide you with your Form 16. Primarily, the reason for this could be that the company might be running on losses and hence, a deficit in their budget might have caused them to not deposit your taxes to the Government. The secondary reason could simply be that the company is not proactive enough! Since you have missed the deadline already, it is futile to go back to your employer. In such cases, it is always advisable to seek out some alternative choices to compute how much your tax liability stands at, and then file the returns accordingly. The procedure to select the form is fairly simple, in case you choose to file through a digital platform (online). The following step in this regard would be to get all your documents in one place, and stack them carefully.
Taxable Income Declaration: In case you do not have a Form 16, the second best source to compute your salaried income is your payslip. However, in this case, you have to remember to subtract the non-taxable incomes from different heads like Leave Travel Allowance, House Rent Allowance, and so on. The new norms introduced for income tax return forms require an individual to provide the complete salary break-up! This also includes allowances that are tax exempted couple with perquisite value.
Additionally, consider all incomes that you are currently earning from multiple sources. The income that you might be earning from interests can easily be deciphered from certificates of your TDS or a Form 26AS.
TDS Value Match: Whatever entries you have made, Form 26AS is easily the most recommended way to cross-check your data. Income from multiple sources, any tax deducted from source, immovable property sale, and such are all reflected in people’s respective Form 26AS. Moreover, if you have paid an advance tax of any nature, you will be required to mention that in your income tax return form as well. It is crucial for an individual to ascertain that the data they have filled in their IT return form matches the information reflecting in Form 26AS. Failure to comply with this might result in the IT department calling you for further notice. If the TDS amount has indeed been deducted by your employer, it is bound to show on your Form 26AS. However, if it does not, then either your PAN details are incorrect or the TDS was never deposited.
Deductions Claim: If January and February were the months in which you had declared your investments, then you are a proactive taxpayer already, and congratulations for being smart! It is easy to trace most of the investments such as Section 80C mutual fund investments, tuition fees, contribution to PPF, and so on.
Simply produce the proofs of your investment and you can proceed to fill the gross number as a deduction under Section 80C.