It is mandatory to file IT returns if your income exceeds Rs. 2.5 lakh (Rs. 3 lakh for senior citizens) for the financial year 2018-19 so there is no escape. Taxpayers have to fill up correct ITR form with correct information to avoid any complications in the future. The extended due date for filing of returns for last year is August 31, 2019. But why wait till the last moment, this week has a lot of holidays, you can file the returns right away and avoid last moment errors.
Here are three easy steps:
Collect all your income data
Keep your documents handy. Download your Form 16, Form 16A, Form 26AS (TDS statement) and bank statements. You will also need your capital gains data for investment in equity shares and equity-oriented funds. For the FY2018-19, a few additional information or disclosures are to be made while filing online returns this includes mentioning the ownership percentage of the housing property that you own and are availing home loan tax exemption benefit. Also, in case of sale of immovable property, the taxpayer has to disclose buyer's name, PAN and address of the property. Individuals who hold unlisted equity shares are required to disclose the name of the company, company’s PAN and cost of acquisition.
Choose the correct ITR Form
It is necessary to choose the correct ITR form to make sure that the return filed is valid. The income tax department has issued four different forms for individual taxpayers filing an income tax return for the fiscal year 2018-19 (Assessment year 2019-20). The forms are ITR 1 for residents individuals salaried or pensioners with one house property and income from other sources less than Rs. 50 lakhs; ITR 2 for non-resident, individual taxpayers and HUFs with income of over Rs. 50 lakh, more than one house, capital gains, investment in unlisted shares and foreign income or assets; ITR 3 and ITR 4 are for taxpayers with income above Rs. 50 lakh or taxpayers who have businesses or are professional or have partnership in firms.
Double-check your information
The two vital documents Form 16 and Form 26AS give taxpayers most of the information that they need to provide to the tax department. It is also very easy to cross-check information using them. Every incident of TDS cut has to be matched to an income source. An important thing that the taxpayer should take into account is filling up all types of incomes received during the year. Apart from the regular salary, a taxpayer could be earning other incomes from financial investments and rental income, dividend, capital gain, even savings account interest need to be accounted for in ITR.
With most of the tax department and tax filing process getting digitalised, systems can easily detect any incorrect data filed by a taxpayer. So ignorance about tax rules can turn out to be costly as it may be considered as concealment of income, so when in doubt consult a qualified tax expert and file the correct returns.