Checklist of readiness before filing your tax returns
Here are the 12 points to keep in mind before you start filing your tax returns for the fiscal year 2018-19 corresponding to assessment year 2019-20.
- Is your PAN mapped to your Aadhar card? Forget about the debates about mandatory and non-mandatory. It is mandatory for you to map your Aadhar and PAN, in the absence of which you cannot file your returns this year.
- Select the right FORM depending on whether your income consists of only salary and interest income or capital gains or has business and speculative income too. There is a separate form prescribed for each and most forms have undergone a change this year. Ensure to use the latest forms.
- Let there be no confusions about whether you need to file your return. If your income before deductions is more than Rs2.50 lakhs, you are mandatorily required to file returns. Return filing is also mandatory if you have any capital gains or losses in the year.
- Interest income, however small, has to be shown in your tax return as income. The benefit of Section 80TTA is only applicable to interest on savings accounts with banks and post offices, not to other types of interest receipts.
- Any income earned by your son or daughter who is a minor (less than 18) has to be clubbed with your total income subject to a very basic deduction of Rs1,500. This includes your spouse’s income unless he/she is a tax filer.
- The Income Tax Act has outlined a set of high value transactions (HVT) which need to be disclosed. All these are tracked through your PAN and Aadhar mapping. This includes high value investments in securities, property and gold as well as bank deposits.
- Ensure that you account for any gifts you receive from relatives and others. Gifts from relatives (as defined in the act) are tax free. All other gifts are subject to an outer limit of Rs50,000 overall and anything above that is taxable income.
- Remember to disclose all your exempted incomes also in your tax returns. This includes dividends on shares, interest on tax free bonds, agricultural income, etc. They may be exempt from tax but still need to be shown in the returns.
- Show all receipts from employers, vendors and claim deduction for TDS. In case you have shifted your job during the year, then you need to file with two Form 16s. Form 26AS is considered the ultimate document of reference for the IT department. You can download the Form 26AS from your Income Tax login website.
- If your total income is more than Rs50 lakhs per annum, you need to make additional disclosures of your total assets and liabilities in a separate annexure. Also note that if the taxable income after deductions is more than Rs50 lakhs, then you are subjected to additional surcharge.
- Once your documents are in place, keep important details like the deductor TAN number, bank account number, etc. ready with you. These details must be entered precisely. Any error can lead to either rejection of returns or delay in refunds as the case may be.
- Last, but not the least, don’t wait for the last minute. File your returns well before time as delays are now subjected to mandatory penalties.
Go ahead and make your return filing task simpler!