Income tax return Filing

Important FAQs You Need to Know Before Filing Income Tax Return

“I like to pay taxes. With them, I buy civilization.” Oliver Wendell Holmes Jr.

31st July is the due date of filing an income tax return for individual taxpayers. Here are some important FAQs for the benefits of taxpayers.

Benefits of Filing Income Tax Return?

​​​​Apart from this being your duty and legal obligation, your income-tax returns validate your credit worthiness before financial institutions and make it possible for you to access all kinds of loans from banks.

Is Return Filing Mandatory?

​​Govt. can appropriate rights overall taxes paid, deducted, and collected on your behalf only on completion of self-assessment.

You can intimate this self-assessment to the Department by way of filing the return of income.

Filing of return is critical for this process and, hence, has been made mandatory. Failure will attract levy of penalty. ​​

What if You Fails to Furnish Return?

​​​​​​​​​Yes, if you are required to furnish a return of income under section 139 and fails to do so within the time prescribed, you will have to pay interest on tax due.

W.e.f. the assessment year 2018-19, a fee as per section 234F is required to be paid if the return is furnished after the due date. Fee for default in furnishing return of income will be as follows:

  1. Rs. 5000 if the return is furnished on or before the 31st day of December of the assessment year;
  2. Rs. 10,000 in any other case

However, the late filing fee shall not exceed Rs. 1000 if the total income of an assessee does not exceed Rs. 5 lakh.

Filing after the Due Date?

​Any person who has not furnished a return of income within the time period allowed under section 139(1) or within the time period allowed under a notice issued under section 142(1), may furnish a return for any previous year. This is known as a belated return. This can be filed:

– at any time before the end of the relevant assessment year or before completion of the assessment, whichever is earlier.   (w.e.f A.Y 2018-19)

For Assessment Year 19-20 which means financial year 18-19, a belated return can be filed before 31st March 2020.

However, a belated return attracts late filing fees under section 234F as mentioned above.  (w.e.f A.Y 2018-19)

Can I File Revised Return if there are Mistakes in Original Return?

​A return of income can be revised at any time during the assessment year or before the assessment made whichever is earlier.

For Assessment Year 19-20 which means financial year 18-19, a belated return can be filed before 31st March 2020.

If the original return was filed in paper format or manually, then technically it cannot be revised by online mode or electronically.

How to File the Return of Income Electronically?

​​​​Income-tax Department has established an independent portal for e-filing of return of income. The taxpayers can log on to http://www.incometaxindiaefiling.gov.in for e-filing the return of income.​

Click here to view the step by step procedure to file Income-tax return online.

How Many Times Can You Revise the Return?

​If a person after furnishing the return finds any mistake, omission or any wrong statement, then return should be revised within a prescribed time limit given below:

  • A return can be revised before the end of the Assessment Year or before the completion of the assessment; whichever is earlier. (w.e.f A.Y 2018-19)
  • However, for the earlier Assessment Years preceding to the Assessment Year 2018-19, a return can be revised before the expiry of one year from the end of the Assessment Year or before the completion of the assessment by the Department; whichever is earlier. (till A.Y 2017-18).

If the original return was filed in paper format or manually, then technically it cannot be revised by online mode or electronically. ​​​

Revised return can be filed online under Section 139(5).​​

How Long Are You Required to Keep a Copy of the Return filed as Proof?

​​​​Yes, since legal proceedings under the Income-tax Act can be initiated up to four or six years (as the case may be) prior to the current financial year, you must maintain such documents at least for this period.

However, in certain cases the proceedings can be initiated even after 6 years, hence, it is advised to preserve the copy of return as long as possible.

Further, after the introduction of the e-filing facility, it is very easy and simple to maintain a copy of the return of income.​​

What is Form 26AS?

​A taxpayer may pay tax in any of the following forms:

(1) Tax Deducted at Source (TDS)

(2) Tax Collected at Source (TCS)

(3) Advance tax or Self-assessment Tax or Payment of tax on regular assessment.

The Income-tax Department maintains the database of the total tax paid by the taxpayer (i.e., tax credit in the account of a taxpayer).

Form 26AS is an annual statement disclosing the details of the tax credit in his account as per the database of Income-tax Department.

In other words, Form 26AS will reflect the details of tax credit appearing in the Permanent Account Number of the taxpayer as per the database of the Income-tax Department.

The tax credit will cover TDS, TCS, and tax paid by the taxpayer in other forms like advance tax, Self-Assessment tax, etc.

Income-tax Department will generally allow a taxpayer to claim the credit of taxes as reflected in his Form 26AS.

​How to Address Discrepancies Appear in actual TDS and TDS Credit as per Form 26AS?

Many times the actual amount of TDS and TDS credit as appearing in Form 26AS may differ and it may happen that the TDS credit appearing in Form 26AS may be less as compared to actual TDS.

This may happen due to reasons like non-furnishing of TDS details to the Income-tax Department by the deductor, deducting the tax in incorrect Permanent Account Number, etc.

In such a case the deductee should approach the deductor and request him to take the necessary steps to rectify the discrepancy due to the above reasons.

The Income-tax Department updates the TDS details in Form 26AS on basis of details provided by the person deducting the tax (i.e., the deductor).

If there is any default on the part of deductor like non-furnishing of TDS details (i.e., TDS return) to the Income-tax Department, deducting the tax in incorrect Permanents Account Number, etc. then Form 26AS will not reflect the actual TDS.

In such a case, the taxpayer may not be able to claim the credit of correct TDS. Hence, the taxpayers are advised to confirm the tax credit appearing in Form 26AS and should reconcile the difference if any.

​If a discrepancy is due to the deductor, then he may file the TDS/TCS correction statement and correct the same.

Precautions Should be Taken While Filing the Return of Income?

​The followings are the important steps/points/precautions to be kept in mind while filing the return of income:

  1. The first and foremost precaution is to file the return of income on or before the due date. Taxpayers should avoid the practice of filing a belated return. Following are the consequences of delay in filing the return of income/ Loss (other than house property loss):
  2. The taxpayer should download Form 26AS and should confirm actual TDS/TCS/Tax paid. If any discrepancy is observed then suitable action should be taken to reconcile it.
  3. Compile and carefully study the documents to be used while filing the return of income like bank statement/passbook, interest certificate, investment proofs for which deductions is to be claimed, books of account and balance sheet and P&L A/c (if applicable), etc.
  4. No documents are to be attached along with the return of income.
  5. The taxpayer should identify the correct return form applicable in his case. Carefully provide all the information in the return form. Confirm the calculation of total income, deductions (if any), interest (if any), tax liability/refund, etc.
  6. Ensure that other details like PAN, address, e-mail address, bank account details, etc., are correct.
  7. After filling all the details in the return of income and after confirmation of all the details, one can proceed with filing the return of income.
  8. In case of return is filed electronically without digital signature and without electronic verification code do not forget to post the acknowledgment of filing the return of income at CPC Bangalore within 120 days of filing return of income.

“Income tax returns are the most imaginative fiction being written today.” Herman Wouk

These are some of the 100s of FAQs on the Govt Income-tax site. The need is to revamp the Act and make it as simple as possible. Till that happens, live with the complexities.

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