Wednesday, 28 May 2014

Checklist that can simplify filing of income-tax return

Taxing Issues

It’s that time of year when you have to start thinking about filing your income tax returns. And you may be slightly worried about how to go about it.

The last date for filing your personal tax return for the financial year 2013-14 is July 31. To save yourself from the hassle of last-minute preparation and filing, it is advisable to do it in advance. Here’s a checklist you can consider in order to enjoy a smooth tax return filing experience:

Identify your sources of income: Some individuals have various sources of incomes and others only one. Sources of income can be salary income, professional fees, house rent, bank interest, dividends and capital gains. It is essential to identify all of them so as to report them correctly in your tax return.

Collect the essential documents: If you are a salaried employee, TDS certificate (Form 16) issued by your employer acts as proof of your salary and tax that has been deposited by the employer. If you have made investments in different portfolios (fixed deposits, recurring deposits), you’ll be in receipt of interest and the bank will deduct tax and issue a TDS certificate (Form 16A).

You should also download Form 26AS (tax credit statement as per government authority’s records) from the income tax website and simultaneously compare it with Form 16, Form 16A and advance taxes paid, if any. It will reconcile and let you know the actual taxes deposited in your name.

You can also collect documents of investment / expenses which you have done during the year which gives you tax benefits. Some of them could be:

>> Investment in PF, PPF, NSC, tuition fees, insurance premium, etc.

>> Expenses on health insurance premium / preventive health check-ups.

>> Donations to charitable organisations.

>> Payment of housing interest.

While no documents are required to be filed with the tax return, having documents to substantiate your entries will help you in case your return is picked for assessment later.

Compute your income and taxes: Identify your taxable income on the basis of all the information gathered. Taxes can be calculated by applying relevant slab rates applicable to you. Adjust the tax already deducted and advance taxes paid during the year. If there is any balance tax payable, pay the amount and interest (if any) in the form of self-assessment tax.

Choose the correct tax return form: Choosing the correct tax return form is important and it will depend on your sources of income. (See table above)

The form will require you to fill your personal details (like name, father’s name, date of birth, residence address, email address, mobile number). Ensure that due care is maintained while filling these details. Also see that your bank account number and IFSC code is correct so that refund can be credited directly to your bank account.

Post your signed ITR-V: If you are filing your tax return online, you will get an acknowledgement (ITR-V) which is required to be submitted to the Central Processing Centre, Bengaluru. This acknowledgment needs to be signed (with blue ink only) and submitted to central processing centre through speed post within 120 days of filing.

This will complete your tax return filing and give you the much-needed peace of mind.

No comments:

Switzerland revokes unilateral MFN benefit under India-Switzerland Tax Treaty w.e.f. 1 January 2025

  This Tax Alert summarizes a recent Statement issued by Switzerland Competent Authority [1] (Swiss CA) on 11 December 2024 (2024 Statement...