Checklist before Income Tax Returns Filing

Income tax return filing is a very important thing for every tax payer. 31st July is the last date for filing of income tax returns for individuals/HUFs and those whose income are not subject to audits. Filing ITR before the deadline has an utmost importance as by doing this we can ensure that we do not lose certain benefits. It is also advisable to develop this habit as starting next year there will be late filing fee, maximum up to Rs 10,000 if return is filed after the notified deadline. So how should we file the returns easily and without any mistakes? A proper planning and documentation makes the life easier. Here is the checklist before filing he returns so that we can do it more comfortably and without errors.

1.      Get all documents in order

The most important thing to start with ITR filing is getting the required documents together. Documents we require vary depending on the types of income you have. 

Documents required for salaried employees are:

a.      Form-16 issued by your employer. This contains all the salary and other benefits provided by the employer.

b.      Form 26AS is a summary of taxes deducted on your behalf and taxes paid by you. This is provided by the Income Tax Department.

c.      Investments made under Section 80C: which includes

                                                               i.     Contribution to Provident Fund

                                                              ii.     Children’s school tuition fees

                                                             iii.     Life insurance premium payment

                                                            iv.     Stamp-duty and registration charges

                                                             v.     Principal repayment on your home loan

                                                            vi.     Equity Linked Savings Scheme/Mutual funds investment

However the maximum amount that can be claimed under Section 80C is Rs 1.5 lakhs

d.      Details of Interest Income: This includes Interest in Saving Account which is exempted upto Rs 10,000 (under section 80 TTA). Interest on Fixed Deposits, Bonds debentures etc. If any TDS is deducted then it will be reflected in For 26AS.

e.      Details of investments under Section 80D for mediclaim

f.       Details related to other specific exemptions under section 80

g.      Other Investment documents, which includes :

                                                               i.     Interest paid on housing loan. Interest on housing loan is eligible for  tax saving upto Rs 2,00,000. This is for a self-occupied house.

                                                             ii.     From FY 2017-18, the total loss from house property available for set off against other income is capped at Rs 2 lakhs and therefore, interest on housing loan is eligible for tax saving upto Rs 2,00,000 for let out property as well.

                                                             iii.     Education loan interest payments exempted under section 80E.

                                                            iv.     Stock trading statement. The stock trades that were made during the year may be taxed under Capital Gain.

                                                             v.     Mutual funds redemptions details to calculate long term and short term capital gains

2.  Match the details

After getting all the documents in order, we should check the tax deducted with for 26AS, so that there should not be anything left out or if there is any discrepancy that needs to be sorted out.

3.  Calculate the tax dues

Before filing ITR, we need to calculate the total amount of tax to be paid. For this we need to take all the incomes apart from salary income i.e. Interest income, capital gains, income from house property and any other income and calculate the final amount of income tax to be paid by us.

Knowledge of slab rates, for instance, can help you compute your tax liability correctly. The slab rate applicable to an individual drawing taxable income between ₹2.5 lakh and ₹5 lakh has been reduced from 10% to 5%. Earlier, an individual with taxable income up to ₹5 lakh was entitled to a tax relief. Now, this limit has been reduced to ₹3.5 lakh. Also the tax rebate has been reduced from ₹5,000 to ₹2,500. Further those earning an income in the region of ₹50 lakh to ₹1 crore will have to shell out a surcharge of 10%. “Surcharge at the rate of 15% continues in respect of individuals with income more than ₹1 crore.

4.  Pay the tax dues

Once we have correctly determined the total amount of tax, we need to subtract TDS from this total and then pay the balance. The balance tax payable can be paid using net-banking facility of your bank or by visiting the bank branch and paying taxes using Challan.

5.  Check the payment in income tax website

Once we have paid your dues, we should ensure that the tax paid is reflecting in Form 26AS too. Although there can be gap of few days between the date of tax payment and the date by when it starts reflecting in the Form 26AS. So if we are filing in last days we may not find the payments there but we can check it later on.

6.  File the correct ITR Form

 We need to ensure that the form we have filed for tax return is correct form and applicable to us as otherwise it would be treated as a defective return. If we file ITR using the wrong form for we may receive notice under section 139(9) from the department asking us to file ITR again within the stipulated time. And if we fail to file revised ITR within the given time, then it will be treated as if you never filed the ITR.  

The I-T department has released seven forms this year –

a.      For salaried professionals or pensioners, the most relevant forms are ITR-1 (Sahaj) and ITR-2.

b.      For self-employed professional or run a small business, you should use ITR-4 (Sugam).

7.  Points to remember while filing the ITR Form

While filing the income tax form we should remember that:

a.  We have reported all the interest incomes earned in the previous year - in this case financial year 2017-18 - while filing ITR. Many people tend to forget mentioning the accrued interest earned on fixed deposits linked to bank lockers, recurring deposits, Bonds/Debentures or interest earned on savings bank account.

b.    We also need to show the Income exempted from tax such as interest earned from PPF account or tax-free bonds etc.. All these must be reported in our ITR under the 'Exempt Income' schedule

c.   While completing the tax return form, ensure that details of all bank accounts correctly, especially the one we have chosen for receiving tax refunds. Verify the bank name, account number and IFSC code we have entered in the ITR form before submitting the return. Tax refunds will be credited by the tax authorities only in the account furnished in the return.

d.   Ensure that we have mentioned our name in the manner it appears on our PAN card. The return will not be processed in case there is a PAN name mismatch.

e.   Do not forget to update your e-mail ID and mobile number so as to receive timely communication from the I-T department, particularly messages related to return and refund processing. Quoting Aadhaar is a must for resident taxpayers.

8.  Verifying the ITR

After filling and submitting the form we need to verify the same. The return won't be considered 'Valid' until it is verified. The IncomeTax department has made the process of verifying ITR easier by offering various ways to verify return including using Aadhaar OTP, net-banking etc. We can use any one of them and verify the same.