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  • How to File Income Tax Return

    As per section 139(1) of the Income Tax Act, 1961 in the country, individuals whose total income during the previous year exceeds the maximum amount not chargeable to tax, should file their income tax returns (ITR).

    The process of electronically filing income tax returns is known as e-filing. You can either seek professional help or file your returns yourself from the comfort of your home by registering on the income tax department website or other websites. The due date for filing tax returns (physical or online), is August 31st.

    What is E-Filing?

    Electronic filing, or e-filing of returns, as it is also called, is basically the submission of an individual’s income tax returns online. The filing of returns can be done in two ways – one is the conventional offline route which requires you to visit the office of the Income Tax Department and doing it manually, and the other is to file the returns on the internet. E-filing has been gaining a lot of popularity in recent years thanks to advancements in technology. E-filing is also relatively easier in comparison with offline filing as it doesn’t involve tedious paperwork and can be done from the comfort of your home.

    Benefits of E-Filing

    E-filing is preferred to offline filing among a large number of taxpayers in India. Here are some of the major benefits of filing your income tax returns electronically:

    • Quick Processing: When you file your returns online, they will be acknowledged promptly by the Income Tax Department. One of the major benefits of e-filing is that if there are any refunds, they will be processed much quicker in comparison with returns that are filed on paper.
    • Convenient: You can file your returns anytime, anywhere, as long as you have a mobile device or a laptop and an internet connection. The e-filing facility is open 24/7, making it a way more convenient option in comparison with manual filing of returns.
    • Accuracy: The software created for the e-filing of returns comes with built-in electronic connectivity and validations that make it seamless. The software also reduces errors to a considerable extent. Since filing your returns manually can leave the door open to human errors, electronic filing of returns can ensure that there are no manual errors.
    • Confidentiality: Filing your returns on paper has the potential for your details to get leaked. Online filing of returns, however, is much safer in comparison with manual filing as your data will not be accessible by chance or design.
    • Easy to Use: The e-filing portal has been designed in a manner such that it is really easy to file your returns. There are detailed instructions that you can follow to ensure that the process is completed in a smooth and hassle-free manner.
    • Proof of Receipt: Filing your income tax returns online will mean that the confirmation will be sent to you promptly through email on your registered email address. Since the process is automated, there will be no wastage of time in getting your confirmation.
    • Electronic Banking: In case any refunds are due to you, they will be directly deposited to your bank account. In case you have any tax payments to make, they too will be directly debited from your bank account. You also have the choice to file your returns now and pay the taxes later. You can accordingly choose to instruct your bank account and enjoy the convenience offered by the facility.
    • Accessibility: All the information regarding your past data can be accessed with relative ease when you file your returns online. The applications ensure that the data has been stored securely, so that it is easy for individuals to access it when filing their returns again. 

    Who should e-file income tax returns?

    Online filing of tax returns is easy and can be done by most assessees.

    • Assessee with a total income of Rs. 5 Lakhs and above.
    • Individual/HUF resident with assets located outside India.
    • An assessee required to furnish a report of audit specified under sections 10(23C) (IV), 10(23C) (v), 10(23C) (VI), 10(23C) (via), 10A, 12A (1) (b), 44AB, 80IA, 80IB, 80IC, 80ID, 80JJAA, 80LA, 92E or 115JB of the Act.
    • Assessee required to give a notice under Section 11(2) (a) to the assessing officer.
    • A firm (which does not come under the provisions of section 44AB), AOP, BOI, Artificial Juridical Person, Cooperative Society and Local Authority (ITR 5).
    • An assessee required to furnish returns U/S 139 (4B) (ITR 7).
    • A resident who has signing authority in any account located outside India.
    • A person who claims relief under sections 90 or 90A or deductions under section 91.
    • All companies.

    Types of e-Filing:

    • Use Digital Signature Certificate (DSC) to e-file. It is mandatory to file IT forms using Digital Signature Certificate (DSC) by a chartered accountant.
    • If you e-file without DSC, ITR V form is generated, which should then be printed, signed and submitted to CPC, Bangalore by ordinary post or speed post within 120 days from the date of e-filing.
    • You can file e-file IT returns through an E-return Intermediary (ERI) with or without DSC.
    e-filing ITR
    e-filing ITR

    Checklist for e-Filing IT Returns

    There are a few prerequisites to filing your tax returns smoothly and effectively. Major points have been highlighted below.

    • How to choose the right form to file your taxes electronically
    • It can be confusing deciding which form to submit when filing your tax returns online. The different categories of Income Tax Return (ITR) forms and who they are meant for are tabulated below.
      ITR 1 (SAHAJ) Individuals with income from salary and interest
      ITR 2 Individuals and Hindu Undivided Families (HUF) not having income from business or profession
      ITR 3 Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship
      ITR 4 Individuals and HUFs having income from a proprietary business or profession
      ITR 4S (SUGAM) Individuals/HUF having income from presumptive business
      ITR 5 Firms, AOPs,BOIs and LLP
      ITR 6 Companies other than companies claiming exemption under section 11
      ITR 7 Persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D)
    • E-file IT Returns Online
      E-file IT Returns Online
    • Check your tax credit - Form 26AS vs. Form 16

      You should check Form 26AS before filing your returns. It shows the amount of tax deducted from your salary and deposited with the IT department by your employer. You should ensure that the tax deducted from your income as per your Form 16 matches with the figures in Form 26AS. If you file your returns without clarity on errors, you will get a notice from the IT department.

    • Claim 80G, savings certificates and other deductions

      You can claim extra deductions if you forgot to claim them. Similarly, you can also claim deductions under section 80G on donations made to charitable institutions.

    • Interest statement - Interest on savings accounts and fixed deposits

      A deduction for up to Rs.10,000 is allowed on interest earned on savings accounts. However, interest earned on bank deposits, if any, forms a part of your taxable income and is taxable at applicable slab rates.

    • In addition to the above, have the following at hand.

      • Last year's tax returns
      • Bank statements
      • TDS (Tax Deducted at Source) certificates
      • Profit and Loss (P&L) Account Statement, Balance Sheet and Audit Reports, if applicable
    • Ensure your system is equipped with the below.

      Java Runtime Environment Version 7 Update 6 or above

    List of Required Documents for e-filing of tax returns

    It is always good to stay a step ahead, especially when it comes to tax filing. The checklist provided below will help you to get started with the e-filing of tax returns.

    General details:

    • Bank account details
    • PAN Number

    Reporting salary income:

    • Rent receipts for claiming HRA
    • Form 16
    • Pay slips

    Reporting House Property income:

    • Address of the house property
    • Details of the co-owners including their share in the mentioned property and PAN details
    • Certificate for home loan interest
    • Date when the construction was completed, in case under construction property was purchased
    • Name of the tenant and the rental income, in case the property is rented

    Reporting capital gains:

    • Stock trading statement is required along with purchase details if there are capital gains from selling the shares
    • In case a house or property is sold, you must sought sale price, purchase price, details of registration and capital gain details
    • Details of mutual fund statement, sale and purchase of equity funds, debt funds, ELSS and SIPs

    Reporting other income:

    • The income from interest is reported. In case of interest accumulated in savings account, bank account statements are required
    • Interest income from tax saving bonds and corporate bonds must be reported
    • The income details earned from post office deposit must be reported

    Income Tax Slab Rates

    Income Tax Slab rates For Financial Year 2017 – 2018 And Assessment Year 2018-2019

    (As Declared in the New Budget) :

    For Individuals and HUF (Age – Less than 60 years):

    Income Tax Slab Tax rate
    Up to Rs.2,50,000 NIL
    Above Rs.2,50,000 and up to Rs.5,00,000 5%
    Above Rs.5,00,000 and up to Rs.10,00,000 20%
    Above Rs.10,00,000 30%

    *10% of tax will be imposed as surcharge in case the total income is between Rs.50 Lakhs and Rs.1 crore.

    *15% of tax will be imposed as surcharge in case the total income is above Rs.1 crore.

    For Individuals and HUF (Age – 60 years and more, but less than 80 years):

    Income Tax Slab Tax rate
    Up to Rs.3,00,000 NIL
    Above Rs.3,00,000 and up to Rs.5,00,000 5%
    Above Rs.5,00,000 and up to Rs.10,00,000 20%
    Above Rs.10,00,000 30%

    *10% of tax will be imposed as surcharge in case the total income is between Rs.50 Lakhs and Rs.1 crore.

    *15% of tax will be imposed as surcharge in case the total income is above Rs.1 crore.

    For Super Senior Citizens (age - 80 years and more):

    Income Tax Slab Tax rate
    Up to Rs.5,00,000 NIL
    Above Rs.5,00,000 and up to Rs.10,00,000 20%
    Above Rs.10,00,000 30%

    *10% of tax will be imposed as surcharge in case the total income is between Rs.50 Lakhs and Rs.1 crore.

    *15% of tax will be imposed as surcharge in case the total income is above Rs.1 crore.

    Income Tax Slab Rates for Year 2016 – 2017 :

    For Individuals and HUF (Age – Less than 60 years):

    Income Tax Slab Tax Rate
    Up to Rs.2,50,000 NIL
    Above Rs.2,50,000 and up to Rs.5,00,000 10%
    Above Rs.5,00,000 and up to Rs.10,00,000 20%
    Above Rs.10,00,000 30%

    *12% surcharge is imposed in case the total income is above Rs.1 crore.

    For Senior Citizens (Age – 60 years and more, but less than 80 years):

    Income Tax Slab Tax Rate
    Up to Rs.3,00,000 NIL
    Above Rs.3,00,000 and up to Rs.5,00,000 10%
    Above Rs.5,00,000 and up to Rs.10,00,000 20%
    Above Rs.10,00,000 30%

    *12% surcharge is imposed in case the total income is above Rs.1 crore.

    For Super Senior Citizens (Age - 80 years and more):

    Income Tax Slab Tax Rate
    Up to Rs.5,00,000 NIL
    Above Rs.5,00,000 and up to Rs.10,00,000 20%
    Above Rs.10,00,000 30%

    *12% surcharge is imposed in case the total income is above Rs.1 crore.

    Income Tax Return Due Date:

    Generally, the due date for filing Income Tax Return (ITR) for Hindu Undivided Family (HUF)/ Individuals/ AOP (Association of Persons)/ BOI (Body of Individuals) is 31st July of the next Financial Year. For example – The ITR due date for Financial Year 2016-17 would be 31st July, 2017.

    Recommended:

    Income Tax Income Tax Return Income Tax Refund Income Tax Refund Status Form 16

    How do I file e-Returns?

    What to do if you don’t have Form 16

    If you are a salaried individual and want to file your income tax returns, you will have to approach your employer to get your Form 16. All employers are obligated to provide their employees with a Form 16. In case you do not have your Form 16, there is no reason to worry as you can still go ahead and file your income tax returns. A Form 16 is essentially a TDS certificate which contains details regarding your TDS and taxable income. Your taxable and income and TDS can still be calculated even without a Form 16. The following are the steps to file your income tax returns without a Form 16:

    1. Accumulate your payslips to ascertain your taxable income

      To start filing your income tax returns, you will have to compute your net salary from each payslip you got from your employer/s over the course of the financial year. In case you have switched employers over the course of the financial year, you will have to ensure that all the payslips are put together for the computation of your taxable income.

    2. Find the tax deducted through Form 26AS

      The tax deducted at source by your employer over the course of the financial year will have to be calculated, and the amount must match the one mentioned on your Form 26AS. In case there is any discrepancy in the amount that was actually deducted and the amount that was meant to be deducted, your employer must be contacted immediately and the error must be rectified as soon as possible.

    3. Claiming House Rent Allowance

      The salary of most employees contains a component for House Rent Allowance. In order to claim this deduction, your rent receipts must be submitted to your HR/payroll department well before the due date. In case you forgot to submit your receipts to your employers, they can be submitted at the time of filing your returns.

    4. Claiming deductions

      There are several different investments that can offer tax benefits. All the documents relating to your investments must be kept handy so that you can determine which ones are eligible for deductions under Section 80C of the Income Tax Act. These investments could include PPF, EPF, life insurance, etc. Deductions can also be claimed under Section 80D of the Income Tax Act, such as premium payments towards medical insurance, and under Section 80E of the Income Tax Act, such as interest on education loan. When making claims for deductions on Provident Fund, it is important to only claim the amount that you have contributed, and not the amount contributed by your employer.

    5. Income from other sources

      In case you earn income from multiple sources and not just through salary, you will have to include the same under the taxable income. The kinds of income that qualify under this head include income from rent on a property you own, interest accrued from fixed deposits, etc.

    6. Make additional tax payment if required

      In case you have paid lesser tax over the course of the financial year than you actually should, it is important to pay any dues you may have.

    7. File your returns

      If you have confirmation that the overall tax you have paid over the course of the financial year is actually the right amount, you may proceed to pay your taxes online.

    What is the next step after you have e-filed your income tax returns?

    Once you have filed your income tax returns, you will have to verify them. The following are the steps to e-verify your income tax returns:

    1. Use your credentials to login to incometaxindiaefiling.gov.in.
    2. Click on the ‘View Returns/Forms’ link to view your e-filed tax returns.
    3. Choose the option that says ‘Click here to view your returns pending for e-verification’.
    4. Choose the option that says ‘e-verify’.
    5. Once you have clicked on ‘e-verify’, you can choose one of the modes via which an EVC can be generated.
    6. Once the EVC has been successfully generated, you will have to enter the code and submit it.
    7. You will then receive a confirmation message along with an EVC code and a transaction ID. You will then have to click on the option that says ‘Click here to download attachment’.

    You can also e-verify your income tax returns using your Aadhaar Card. Here are is a step-by-step procedure for the same:

    1. Login to incometaxindiaefiling.gov.in.
    2. Once you have logged in, a popup will show up on the screen requesting you to link your Aadhaar number to your e-filing account. In case the popup does not appear, you will have to visit the blue tab at the top called ‘Profile Settings’, and select ‘Link Aadhaar’.
    3. You will then have to ensure that your PAN details are accurate and the Aadhaar number must be entered before you click on ‘Save’. Once the validation is complete, your Aadhaar number and your PAN will be linked together.

    Once your PAN and Aadhaar have been linked, here are the steps you must follow to e-verify your income tax returns:

    1. Upload your income tax return on the e-filing website of the Income Tax Department.
    2. After uploading your income tax returns, you will get a choice of methods through which you want your returns to be verified. Here are the options you will see:
      • I already have an EVC to e-verify my return.
      • I would like to generate Aadhaar OTP to e-verify my return.
      • I do not have an EVC and would like to generate EVC to e-verify my return.
      • I would like to send ITR-V/I would like to e-verify later.
    3. Choose the option to generate Aadhaar OTP and you will receive a one-time password on your registered mobile number. Please note that the validity of the OTP will expire in 10 minutes.
    4. The OTP will have to be entered on the page and submitted after which you will receive a message that says ‘Return successfully e-verified’. The acknowledgment will then have to be downloaded, and you will also receive a copy of the same in your registered email address.

    Should I e-file returns if I earned less than the taxable income?

    Individuals who earn an income in excess of the minimum threshold will not be required to file their income tax returns. However, there are certain benefits to e-filing your income tax returns even if your income is lower than the taxable limit. They are as follows:

    • Adjustment of capital gains or losses: In case you are making investments in the equity market, or have been purchasing and selling shares, it will be beneficial to file your income tax returns. Doing so will enable you to adjust your short-term capital losses against your capital gains. You can carry the adjustment forward for 8 years by submitting your income tax returns for the respective year.
    • Loan applications: An income tax return is more than a financial document. It indicates the yearly earnings of an individual. Banks as well as non-banking financial institutions require a copy of your income tax returns when they are approached for a loan. E-filing of your income tax returns will ensure that your chances of availing a personal loan are higher.
    • Claiming tax refunds: After the deduction of tax, if you are to receive any refunds, you will only receive them if you furnish your income tax returns for the particular year. For instance, TDS on rent payments in case of NRIs, deduction of tax at source by banks on FDs, etc., can only be refunded when your income tax returns have been filed to claim the tax deduction.
    • Foreign assets: Indian residents who own foreign assets are mandated to file their income tax returns according to the law. These assets include movable as well as non-movable foreign assets such as overseas bank accounts. If you fail to disclose your foreign holdings, you could be fined for it as it is considered as an economic offence.
    • Claiming tax deductions: The exemption limits of Rs.2.5 lakh is on your gross income. In case your income exceeds Rs.2.5 lakh, and you wish to bring that amount down in order to avail tax exemptions, you can only do so by filing your income tax returns. Whether or not you have a tax liability, your income tax returns will have to be filed mandatorily if you want tax deductions under any section of the Income Tax Act, 1961.

    Steps to follow to file Income Tax Returns:

    Filing your income tax returns online doesn't have to be a complicated process. Simply follow the below steps.

    First, log on to IncomeTaxIndiaeFiling.gov.in And register on the website.

    • Your Permanent Account Number (PAN) is your user ID.
    • View your tax credit statement or Form 26AS. The TDS as per your Form 16 must tally with the figures in Form 26AS.
    • Click on the income tax return forms and choose the financial year.
    • Download the ITR form applicable to you. If you're exempt income exceeds Rs.5,000, the appropriate form will be ITR-2 (If the applicable form is ITR-1 or ITR 4S, you can complete the process on the portal itself, by using the 'Quick e-file ITR' link - this has been explained below).
    • Open excel utility (the downloaded return preparation software) and fill out the form by entering all details using your Form 16.
    • Check the tax payable amount by clicking the 'calculate tax' tab.
    • Pay tax (if applicable) and fill in the challan details.
    • Confirm all the data provided in the worksheet by clicking the 'validate' tab.
    • Generate an XML file and save it on your desktop.
    • Go to 'upload return' on the portal's panel and upload the saved XML file.
    • A pop-up will be displayed asking you to digitally sign the file. In case you have obtained a digital signature, select'˜Yes'. If you have not got digital signature, choose 'No'.
    • The acknowledgment form, ITR Verification (ITR-V) will be generated which can be downloaded by you.
    • Take a printout of the form ITR-V and sign it in blue ink
    • Send the form by ordinary or speed post to the Income-Tax Department-CPC , Post Bag No. 1 , Electronic City Post Office, Bangalore, 560 100, Karnataka within 120 days of filing your returns online.

    Steps to file ITR 1 & ITR 4S Online:

    Prepare and Submit ITR1 / ITR 4S (Sugam) Online

    You have the option to submit ITR 1/ITR 4S forms by uploading XML or by online submission

    • Login to e- Filing application
    • Go to 'e File' 'Prepare and Submit ITR Online'
    • Select the Income Tax Return Form ITR 1/ITR 4S and the assessment year.
    • Fill in the details and then click the submit button and choose DSC (Digital Signature Certificate)’ (if available) Click on ‘Submit’.
    • After submission, acknowledgement detail is displayed.
    • Click on the link to view or generate a printout of acknowledgement/ITR V form.

    To use DSC, you have to register it in the e-filing application. You can do so by logging in on the e-filing website of the IT Department and updating the Profile Settings section. Under Profile Settings, you have to select Register Digital Signature Certificate and download the ITD e-Filing DSC Management Utility. You can use this utility to generate the DSC file.

    Private portals:

    You could also make use of several websites to file your income tax returns online. The portals typically charge fees (Rs. 250 to 300) depending on the kinds of service they offer.

    Things to watch out for while e-filing:

    • If the same mobile number or email address is used for more than four taxpayers, you cannot file returns on the website, unless the required change is done. For instance, in some cases, more than five returns may be filed— yours, wife, mother, mother-in-law and the Hindu undivided family (HUF) of which you are the karta, the executor of a will.
    • If your name mentioned in your bank documents or official statements is even slightly different from the one given in the PAN card, the portal will consider you a different individual. In certain instances, some individuals give their father's name as their 'middle' name in their PAN card, but do not use it for their bank accounts.
    • If a non-resident Indian has to file income tax returns, he will need both an India number and a foreign number.

    Frequently Asked Questions: e-filing Income Tax Returns

    1. I file ITR online without an account on the Income Tax e-filing portal?

      No, You have to create an account on the portal to file your ITR online. It is an easy process'“ you have to register yourself by providing details such as user type (individual, HUF, companies, chartered accountants, agencies or tax deductors), your PAN, first and middle names and surname, date of birth, and fill in the registration form. If you already have an account but have forgotten password, you can generate it through the'˜Forgot Password' option.

    2. How many days do I have to verify the Income Tax Return I filed online?

      You have to either send the ITR-V to CPC, Bangalore, or verify it online through electronic verification code or Aadhaar-linked one-time password, within 120 days of e-filing the return.

    3. Can I e-verify my ITR instead of sending a hardcopy to CPC, Bengaluru?

      Yes. The Income Tax Department now allows you to e-verify ITR through an electronic verification code (EVC) or through a one-time password by linking your PAN and Aadhaar.

    4. Can I e-file my return before all my tax payments are done?

      You can only file your Income Tax Return'“ online or through an agency'“ after all your tax payments for the year are done. The deadline for filing ITR is August 31 of the year after the end of a given assessment year'“ that is, you get 4 months to file ITR. This helps you put your accounts in order and make sure all tax-related payments are sorted.

    5. Is it mandatory for me to do the e-filing or can I depute it to someone?

      You can seek the help of chartered accountants and agencies dedicated to ITR filing. It is wiser not to allow anyone to have your PAN and password in order to prevent any kind of fraud.

    6. How to check the status of Income Tax Refund?

      You can check the status of Income Tax Refund online on the website of the Income Tax Department of India. You can track the refund status after 10 days (from the date the refund was sent to you). To check the status, you have to enter your Permanent Account Number (PAN) and choose the correct Assessment Year.

    7. What is HRA ?

      HRA stands for House Rent Allowance. It refers to the amount of rent you pay for your place of residence. While filing Income Tax, you can claim HRA. You can enjoy tax exemption on HRA up to a certain limit. If you are unable to submit rent receipts to claim HRA exemption, then you can claim it while filing your ITR. If you have paid more than Rs.1,00,000 on rent in a financial year, then you will have to provide the PAN of your house owner/landlord. HRA exemption will be the minimum of the following:

      • Actual HRA received.
      • Actual Rent Paid.
      • Rent Paid – 10% of Basic Salary.
      • 50% (metro)/ 40% (non-metro) of Basic Salary.

      To claim HRA exemption in ITR1 (If your employer has not calculated HRA), you have to deduct the HRA exemption amount from your Gross Salary and enter the result in the section ‘Income from Salary/Pension’.

    8. What is ITR–V ?

      If you e-File ITR without using DSC or you e-File through e-Return Intermediary, then ITR-V form will be generated for you. You have to print this form, sign it and submit it to CPC, Bangalore using Speed Post or Ordinary Post only within 120 days, starting from the e-Filing date.

    News About E-Filing Tax Return

    • No Benefits for Employees of the Central Government on Independence Day

      Employees of the Central Government were looking forward to good news regarding an increase in pay, which was supposed to be announced on Independence Day. However, Narendra Modi, the Prime Minister of India, gave his speech at the Red Fort in New Delhi, and this resulted in disappointment for around 50 lakh employees of the central government and approximately the same number of pensioners who had been expecting a pay hike to be announced on August 15 this year. Since the economic factors appeared positive in recently times, adding to the upcoming elections, a large section of the central government employees were convinced that Independence Day would coincide with the good news they were expecting. While the Prime Minister revealed the future growth of the Indian economy, adding that it will soon be a powerhouse in the decades to come, he did not mention anything about the pay hike, thereby leaving a large number of central government employees disappointed.

      11 September 2018

    • Maharashtra plans to write off Rs.118 crore tax arrears for big winemakers

      The Maharashtra state government led by BJP is set to write off tax arrears totalling to Rs.118.30 crore owed by some of the biggest winemakers in India. The tax which is proposed to be foregone are arrears accumulated pertaining to the excise duty since 2006. As per the statement of senior sources of the state’s finance department, this is the first time in the history of the state that a proposal to write off the principal tax dues is being considered.

      In case the move is approved, Sula Vineyards Pvt. Ltd., the biggest winery in India will be the biggest beneficiary. Sula Vineyards Pvt. Ltd. is responsible for making up to over 65% share in the domestic wine industry. The records from the state excise department portray that the arrears owed by Sula Vineyards alone total to Rs.115.89 crore. There are 5 other medium-sized wineries that will enjoy the benefit in case the move is approved. They are - Good Drop Wine Sellers Private Limited (Rs.1.32 crore), Seven Peaks Wineries Pvt. Ltd. (Rs.78.25 lakh), Vinland Wines Company Pvt. Ltd. (Rs. 17.87 lakh), AD Wines (Rs.9.65 lakh), and Noble Wines (Rs. 2.67 lakh). All these wineries are in Nashik.

      10 September 2018

    • Filing of Income Tax Returns: Tax Deducted at Source Different When Purchasing NRI Property

      Under the TDS regulations, if a seller of a property is a non-resident Indian, the buyer will be required to deduct tax at source at 20% of the value of the sale. The amount will then have to be deposited with the government within a week from the completion of the month in which TDS happened. The remaining amount will be paid to the seller who is a non-resident Indian. The seller can claim the amount as a refund. To do so, he/she will have to file his/her income tax returns. However, an exception exists for this rule. In case the buyer receives a Lower Tax Deduction or the Certificate of NIL from the Income Tax officer, then the tax rate applicable to the individual either reduces or he/she will not be taxed at all.

      3 September 2018

    • Frequent changes in the Income Tax Returns (ITR) e-versions annoying taxpayers

      Salaried taxpayers who have recently tried to file their income tax returns found that another fresh set of changes has been introduced to the electronic version of the e-filing system. The system released by the Income Tax department is also technically known as schema or utility. The taxpayers have been annoyed because of the frequent changes in the system. The changes are requiring the taxpayers or users to re-enter data and even gather more details at the end moment.

      In certain cases, the confused taxpayers are required to consult their chartered accountants to seek for a fresh clarification. The last date for filing the Income Tax Returns (ITR) for salaried taxpayers was 31 July 2018 for the financial year 2017-18. However, due to some technical glitches, this date was further extended to 31 August 2018. However, the electronic versions of ITR-1 and ITR-2 (which are used by salaried taxpayers to file their returns) were recently revised again. The revisions were made on 1 August 2018 and 9 August 2018 respectively. As per the latest changes, both the forms now demand additional information in terms of income which is taxable under the head ‘income from ‘other sources’. This particular head now requires the taxpayer to feed the details pertaining to interest from bank savings accounts, term deposits, interest on refund of income tax, and other interest.

      31 August 2018

    • Applications for E-Payments and E-Filing to be Launched by Supreme Court

      The Supreme Court’s e-committee is expected to soon launch a number of mobile apps to make life easier for lawyers and litigants. The apps will offer such services as e-filing, e-payment, Supreme Court Legal Services Committee, National Service and Tracking of Electronic Processes, as well as awareness guides for the services offered under the program of the e-courts.

      31 August 2018

    • Tax audit reporting of non-salaried gets tough

      As per the new tax audit requirements, non-salaried professionals who have gross receipts of more than Rs.50 lakh and business entities which have a turnover of more than Rs.1 crore (Rs.2 crore in case presumptive taxation has been opted for) will be required to furnish additional details. The Central Board of Direct Taxes (CBDT) has added the scope of the reporting by a tax auditor through the inclusion of GAAR to GST and TDS to cash transactions of more than Rs.2 lakh.

      The Income Tax officials are of the opinion that the main idea behind the implementation of this rule asking for additional details on part of the assessee is to facilitate the data mining and analytics which will lead to them being able to curb tax evasion. However, some challenges that could be faced in this regards have been pointed out by the chartered accountants. A revised Form 3CD has been issued by the CBDT which is included in the Income Tax audit report. For example, the details of transactions that would be covered by GAAR like cash transactions that are more than Rs.2 lakh, details of Goods and Services Tax (GST), details of transactions that are subject to Tax Deducted at Source (TDS), etc. are now required to be reported. The new form, which was released recently will be brought into effect from 20 August 2018.

      20 August 2018

    • Why should you not delay your Income Tax Returns (ITR) filing?

      It is important to file the Income Tax Returns (ITR) on time for a number of reasons. It must be ensured that the return filing is free of any error. The best way to ensure error-free filing is to file the returns on time, i.e. before the 31st July deadline. In addition to that, it is also important to stay updated about the changes (if any) that have been implemented in the tax filing norms. The chances of making a mistake at the time of filing returns in the last moment are high. An error in the return filing will be an open invitation for a notice from the tax department to the taxpayer. Moreover, filing the taxes after the due date might also attract a hefty penalty of up to Rs.10,000. If the returns are filed by the end of the year, i.e. 31 December 2018, but after the deadline of 31 July 2018, the taxpayer will have to pay a penalty of up to Rs.5,000. If the filing is further delayed, the payable penalty will pile up to as much as Rs.10,000.

      Thus, it is important to file the tax returns on time, to avoid errors and penalty.

      8 August 2018

    • After completion of 1 year, GST is still in a stage of progress

      It is been a year that the biggest tax reform in India, introduction of the Goods and Service Tax (GST), had taken place. As per the cautions of the Narendra Modi government, initially, GST had some teething troubles which has been corrected in the due course of time. But eventually, new issues cropped up resulting in major problems for the traders, especially the small traders. The good thing is that overcoming all the big to small issues, India has collected Rs.7.41 lakh crore in indirect taxes under GST in FY 2018. This year the target has been set higher with an aim of collecting Rs.13 lakh crore with an expectation of getting an average 20% rise in the monthly collection.

      However, the fact remains that even after multiple alterations and around 400 tweaks, the complex issues in this new tax system haven’t really been sorted. As per the analysts, it is still in the stage of progress and the government needs to simplify GST and widen its tax base to make it more convenient and accessible for every small to big traders in India.

      26 July 2018

    • Tax evaders beware: Govt steps up measures to plug revenue leakages

      Dodging taxes under the Goods and Services Tax (GST) regime might not be easy. The government is intensifying the measures to protect the interest of consumers in addition to plugging the revenue leakages. A member of the Central Board of Indirect Taxes and Customs (CBIC), John Joseph recently said, that on the completion of a year of the GST rollout, the finance ministry has detected tax evasions of worth more than Rs.2,100 crore. He stated that the CBIC is taking tax evasions very seriously and that they have detected a tax evasion of Rs.2,000 crore since the rollout of the Goods and Services Tax (GST). He added, “In the last two-three days, tax evasion of Rs.100 crore to Rs.150 crore or more has been caught.”

      This implies that the eligible businesses under the Goods and Services Tax (GST) ambit are either dodging the tax payments or producing fake bills. Detailed data analytics have been started by the CBIC and the IT backbone of the indirect tax system GST Network (GSTN) with the number of available sets of data with them. The government has also started taking actions against the businesses that have shown mismatches in the details present in the return filing forms GSTR 3B (summary form) and GSTR 1 (sales form). CBIC has also developed a mobile app called the ‘GST Verify’ which will help consumers to figure out if a person collecting tax from them is eligible to collect it or not. Another CBIC member, Mahender Singh said that the government is developing a model where consumers can get in touch with the nearest tax jurisdiction and lodge a complaint against a dealer who is not paying tax or is asking the consumers to pay taxes which is more than the stipulated rate.

      20 July 2018

    • App to be launched soon for paying road taxes online

      The state transport department of Bihar will soon launch the m-Parivahan mobile app for enabling the online payment of road taxes. The state transport secretary Sanjay Kumar Agarwal said that the owners of commercial vehicles can directly pay road taxes using the mobile application. They will not be required to visit the district transport office (DTO) for the payment of road taxes. He added that now such owners will have direct access to different information, services, and utilities related to payment of tax.

      Reportedly, the number of vehicles in Bihar have doubled in the last 5 years. Agarwal said that the number of vehicles has gone up from 35 lakh to 70 lakh. This signifies economic development as well as more work. He assured that with the help of this app the work of the DTOs will be reduced to a great extent. However, people who face difficulties in paying the tax online can also avail the service of paying taxes at the DTO counters.

      On 3 May 2018, Chief Minister Nitish Kumar launched the m-Parivahan app after the Union Ministry of Road Transport and Highways introduced a nationwide transport database. Agarwal also added that the mobile app could not be launched earlier because of some technical glitches. However, the issue was later solved after getting in touch with the National Informatics Centre. Reportedly, Bihar will be the first state to launch the m-Parivahan app and it will be launched in all its districts.

      16 July 2018

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