As per section 139(1) of the Income Tax Act, 1961 , the individuals whose total income during the previous year exceeds the maximum amount which is not chargeable to tax, are required to file their income tax returns (ITR).
The process of electronically filing of the income tax returns is known as e-filing. The due date for filing the tax returns (physical or online), is July 31st.
Who should e-file the income tax returns?
Online filing of tax returns is generally easy and it can however be done by most of the assessees.
· Assessee who have a total income of Rs. 5 Lakhs and above.
· Individual/HUF resident with the assets that are located outside India.
· An assesse is required to furnish a report of audit which is 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 are also required to give a notice under Section 11(2) (a) to the assessing officer.
· A firm (which however does not come under the provisions of section 44AB), AOP, BOI, Artificial Juridical Person, Cooperative Society and Local Authority (ITR 5).
· An assessee is also required to furnish the returns U/S 139 (4B) (ITR 7).
· A resident who has a signing authority in any account which is located outside India.
· A person who however claims relief under sections 90 or 90A or the deductions under section 91.
· All the companies.
Also , In a welcome move, CBDT had announced that a taxpayer, who furnishes his/her Aadhar Id number while e-filing of his Income Tax Return (ITR), is now however exempted from submitting the physical copy of its ITR V form. So, sending of the paper acknowledgment by post is however not required.
The new forms however also seek a more detailed declaration from the taxpayers. It’s however now mandatory to list the bank accounts which is held at any time during the year in ITR-1, including those that generally have been closed during the period. The tax payers will also be required to provide account numbers, name of the bank, the IFSC code and the list of any of the joint holders along with the closing balance on March 31 of the assessment year.
Also , the government had notified a simpler, one-page form for income tax returns filing while however it made it mandatory to quote Aadhaar number and also disclose the bank deposits of more than Rs 2 lakh post demonetisation.
The Income Tax Return Form-1 (Sahaj) would thus replace the 7-page form, removing a plethora of the columns on the deductions from the income which is claimed.
Sahaj can now be filed by an individual who is having income of up to Rs 50 lakh from the salary, house property and interest.
Currently, SAHAJ (ITR 1) is only filed by the salaried employees and ITR 2 by the individuals and HUFs whose income does not include income from business.
The government has also done away with the form ITR 2A (which is used by the individuals & HUFs who are not having income from business or profession and the capital gains and also by those who do not hold foreign assets).
Sahaj also makes quoting of 12-digit biometric identifier Aadhaar number mandatory along with the Permanent Account Number (PAN) and it also seeks details of the cash in excess of Rs 2 lakh that was thus deposited in the bank accounts in the 50-day post demonetisation window.
ITR 2 and ITR 3 now have a Schedule AL requiring assessees to declare their assets and liabilities at the end of the fiscal.
The e-filing facility for the ITR-1 is now enabled from April 1 and ITRs can thus be filed till the stipulated deadline of July 31.
Besides this personal details, an income tax filer only needs to disclose his income from the salary or pension, one house property and also other sources like interest.
Thereafter, deduction of the claims are required to be stated, followed by computation of the taxable income.
Bank details are also required to be filled in the column following that. Details of the advance tax, self-assessment tax payments and the tax which is deducted at source comes next in the column which is for providing bank details, cash deposited in excess of Rs 2 lakh during November 9 to December 30, 2016 is also required to be mentioned.
The rationalised ITR would also “reduce the compliance burden to a significant extent on the individual tax payer,” the CBDT had said, adding that the move would thus benefit more than two crore tax-payers who would be eligible to file their return of income in this simplified Form.
Simultaneously, the number of ITR Forms have however been reduced from the existing nine to seven forms. The existing ITR Forms ITR-2, ITR-2A and ITR-3 have however been rationalised and a single ITR-2 has thus been notified in place of these three forms .
ITR 4 which is filed by Individuals & HUFs having income from a proprietary business or profession will now thus be known as ‘Sugam’ and then ITR-4S would be substituted.
Going forward for the AY 2017-18, the benefit of using the simplest ITR form i.e. ITR-Sahaj shall however not be available to the following category of taxpayers:
1. those who are earning total income of more than Rs 50 Lakh,
2. Those who are earning dividend income of more than Rs 10 lakh
3. Those whose total income includes cash credits, unexplained investments, unexplained money etc
Similarly, ITR 4 (Sugam) however cannot be used by the following category of taxpayers which are :
1. Those earning dividend income of more than Rs 10 lakh,
2. Those whose total income includes cash credits, unexplained investments, unexplained money etc.
Thus , at the time of filing the form, the taxpayer is required has to fill in PAN, Aadhaar number, personal information and the information on the taxes which they have paid. TDS would be auto-filled in the form.
However , Most of us think that we are done away with our e-filing task as soon as we submit our ITR online. And perhaps this kind of notion is one of the main causes for the troubles and the income tax notices which is faced by the taxpayers after e-filing.
For instance the taxpayers are required to verify their income tax return after e-filing and failing to do so may however treat their e-filed ITR as invalid. Likewise, ignorance of other things may either lead to an additional tax demand or loss of the tax refunds .
Verify the ITR or dispatch ITR-V
The primary thing which one should do just after e-filing is that either s/he should e-verify her/his ITR or either dispatch the ITR-V to CPC Bangalore.
2. Track the ITR-V receipt status
If the taxpayer has however opted in order to verify the ITR by sending the signed copy of ITR-V then one must however continuously track the receipt status of the ITR-V at CPC, as one would generally get an alert for the non-receipt of the ITR-V due to the postal loss. Thus , Once the Central Processing Unit Bangalore receives the ITR-V form, it then however dispatches an email which acknowledges the receipt of the ITR-V which should thus reach the taxpayer within a month of sending the ITR-V to CPC Bangalore.
3. Track the intimation status
After the process of e-verification of ITR, taxpayer is required to wait for around one month in order to get the intimation from the IT department under section 143(1). One would receive another email from the IT department once his income tax return gets processed. This email is called as the Intimation under section u/s 143(1). Intimation tells the taxpayer the details about the total TDS deducted, total tax paid, and deductions, if any.
In intimation, one would thus also find information about any kind of difference between the amount of income, deductions, income tax payable, TDS or the income tax which is paid by the taxpayer in his tax return with respect to the amount which the income tax officer has however computed u/s 143(1). The same is thus reflected however in the following 2 columns of intimation:
a. Income tax as which provided by the taxpayer in the return of income
b. Income tax which is however payable as it is computed by the income tax office u/s 143(1)
4. Pay the additional tax if the intimation specifies so:
If the Intimation which is Received u/s 143(1) specifies that the tax paid which is by the taxpayer is less than what is computed by the IT department then this intimation becomes Notice of Demand u/s 156.
5. Track income tax refund status
In case the income tax paid is more than what is computed by the IT department then the taxpayer is however entitled for the tax refund. From this year onwards, the refund would be directly deposited in the bank account which is mentioned in the income tax return.
6. Make sure to keep income tax records:
Even if the taxpayer is done with filing of the income tax return, it is considered as very important in order to keep record of all the paper work safely as the legal proceedings which are mentioned under the income tax act can however be initiated within a span of six years and therefore s/he must keep all the thus income tax related documents safely for at least seven years. Following records are advisable to be kept for future references.
Form 16, Form 12 B
Filed ITR which is along with ITR-V
Copy of Challan for tax paid
Tax deducted at source (TDS), Form 16A
The Tax exemption documents
Bank account statements
The Gifts deeds
Intimation from the IT department which is either a soft copy email or either hardcopy etc.
However , If the taxpayer hasn’t filed his income tax return till the due date (31st July 2017 ) , all is not lost and the taxpayer can still file his income tax return .
There is however no difference in the filing procedure even before or after the deadline. Calculation of the income tax generally remains the same. However, one would have to mention that the return is generally filed after the due date or it is belated return .
The taxpayer is also forgone of some of his rights if he generally misses the deadline.
· He cannot modify his tax return if it generally has been filed after the due date. If the taxpayer has done so by the specified date (31 July), then he can modify his return any number of times before the end of the assessment year or even till the time the return is assessed. However, afterwards, the taxpayer is generally not allowed to make any kind of changes. If he makes a mistake or if he misses any kind of deduction or an exemption, he can’t however claim it later.
· He also cannot carry forward any short-term or long-term losses. Those who file by the due date can thus carry forward their capital losses up to eight financial years and they can then adjust them against any of the future capital gains.
· Penalty: There is also a price which is to be paid for missing the deadline.
· If there is some kind of unpaid tax, the taxpayer would however have to pay 1% late payment fee for every month of delay which is mentioned under Section 234A.
· If the tax due is generally more than Rs 10,000, the taxpayer is required to pay an advance tax. Advance tax is generally payable in three tranches-30% is required to be paid by 15 July of the financial year, 60% is required to be paid by 15 December and 100% is required to be paid by 31 March. If this tax generally has not been paid, the taxpayer is then supposed to undergo a penalty.
· If one is generally filing a Belated return then there could also be a Rs 5,000 penalty for the late filing and it depends up on the assessing officer.
· In case no tax is payable, then the taxpayer would not be liable to pay any kind of interest for filing of the return of income tax after the due date but before the end of the relevant assessment year.
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