Have doubts with filing your income-tax returns?

We answer a few basic questions that will help you go through the process in a trouble-free manner

Hurry up! Just about a week left to file your income tax return (ITR) for the FY 2017-18 (AY 2018-19). Stuck with doubts on how to go about it?

Portfolio asked many tax payers to find out the frequently asked questions before filing ITRs.

As a first time ITR-filer, what are the basic things I should look into? Whom can I approach if I have any doubts?

— Sindhuja Jagarapu, IT professional

Before filing the return, be clear about the five heads of income available in the ITR form under which you should disclose your income — income from salary, house property, capital gains, PGBP (profits or gains from business or profession) and income from other sources.

Based on the sources and nature of income, select the appropriate ITR form (discussed below).

 

Sindhuja Jagarapu, IT professional

 

 

Adding all the incomes disclosed under the above heads gives a gross total income from which deductions can be claimed. The net income after the deduction is the income on which tax is calculated based on the income tax slabs. It is to be noted that the deductions (under sections 80C to 80U) cannot be claimed from short term capital gains on sale of equity securities and long term capital gains.

Make sure to file your ITR within the due date as any delay makes you feel the pinch. A new section, 234 F, has been introduced under the Income Tax Act that imposes ₹5,000 for late filing beyond July 31, 2018, and ₹10,000 for filing after December 31.

It is always advisable to consult a chartered accountant or a financial adviser when in doubt. Sometimes, small mistakes can lead to big tax demands. You can take the help of tax professionals or the public relations officer in the local office of the Income-Tax department. You can also take the assistance of tax return preparers (TRPs) who can be located at www.trpscheme.com.

Which form should I select to file my ITR?

— Reema George, bank employee

There are seven forms available to file income tax returns for FY 2017-18 (AY 2018-19).

If you are an individual or a Hindu Undivided Family (HUF) and have income from the following three sources — salary, one house property or from other sources, either individually or in combination — choose ITR 1. However, you cannot file ITR 1 if the total income from all the above-mentioned sources exceeds ₹50 lakh.

 

Reema George, bank employee

 

Choose ITR 2 in all other cases except when the assessee owns a business or a partner in any firm.

The income or loss from the business, combined with income from any other source, should be disclosed in ITR 3. If the business is covered under presumptive taxation and the turnover doesn’t exceed ₹2 crore, you have to file ITR 4.

While ITR forms 1, 2, 3, 4 are for individuals and HUFs, forms 5, 6, 7 have to be filed by partnership firms, companies and trusts respectively.

What is Form 26AS and how does one download it?

Sruthi Bhaskaran, a bank executive

Form 26 AS is your tax credit statement that includes details of advance taxes paid and TDS deducted on various incomes such as salary and interest earned on deposits. The tax deducted details in Form 26AS will automatically get imported while filing the IT return. Therefore, it is important to cross-verify the details of form 16/16 A (TDS certificate given by the employer/deductor) with Form 26AS. In case of any discrepancies, request the deductor to make the necessary changes.

One can view or download Form 26 AS by clicking ‘View Form 26 AS (Tax Credit)’ under ‘My Account’ in the e-filing portal. It can also be viewed through your PAN linked bank’s net banking where you can click on the option provided to view Form 26AS.

Do I have to disclose my income that is exempted as per the IT Act?

— Firoz Khan, sole proprietor of an exports firm

While taxable incomes are to be shown under specific heads available, such as income from salary, house property and capital gains, you are obliged to disclose your exempt income too. That includes capital gains on sale of long-term listed equity securities and dividend income.

What are the savings that can be claimed as tax deductions?

— Harsha Vardhan, a civil engineer

There is a difference between exemption and deduction. While exempt income doesn’t form part of the total income, deductions reduce your total taxable income by setting off amount spent or saved in specified categories.

 

Harsha Vardhan, a civil engineer

 

 

80C: The taxpayer can claim deduction under this section to the extent of ₹1.5 lakh. Deduction is allowed if the amount is invested in tax-saving avenues such as public provident fund (PPF), equity-linked saving schemes (ELSS), national pension system (NPS), five-year fixed deposits and national saving certificates (NSCs).

Apart from investments, expenses such as children’s tuition fee, life-insurance premium and principal repayment of home loan are also covered under this section. Budget 2015 introduced a new scheme under Section 80CCD (1B) that allows a taxpayer additional deduction of ₹50,000 towards contribution to NPS Tier 1 over and above the ₹1.5 lakh under Section 80C.

80D: Under this section, one can claim tax deduction of up to ₹25,000 for the health insurance paid for the taxpayer or his/her family. An additional ₹25,000 can also be claimed if the insurance is taken for parents. Further, one can get an additional deduction of up to ₹5,000 if any of the insured are over 60 years.

80E: Section 80E allows you to claim interest on loans taken for higher education as a deduction with no cap on the amount. This loan should have been taken for the taxpayer, spouse or children or for a student for whom the taxpayer is a legal guardian.

80TTA: A maximum of ₹10,000 can be claimed under this section against interest income from a savings bank account.

Do I have to disclose details of all my bank accounts?

— Monika Gurung, CS professional

Yes, you have to provide the details (IFS code and the bank account number) of all your savings and current accounts held at any time during that financial year. However, it is not mandatory to provide details of dormant accounts that are not operational for more than three years.

Indicate the account in which you would like to get your refund credited, irrespective of whether you have refund or not.

Is linking of Aadhaar and PAN mandatory before filing the return?

— Shankar Rao, marketing executive

The deadline for linking Aadhaar with Permanent Account Number (PAN) has been extended by the Central Board of Direct Taxes (CBDT) to March 31, 2019.

Therefore, Aadhaar and PAN need not be linked for filing the returns for FY 2017-18 within the due date.

 

Shankar Rao, marketing executive

 

But filling 12-digit Aadhaar number in the return is mandatory with effect from July 1, 2017.

In case the Aadhaar number has not been allotted but has applied, the 28 digits Aadhaar enrolment Id has to be furnished.

How do I e-verify my income tax return?

— Shiva Ganesh, IT professional

The filed ITR will be processed only after the verification is done with your identity. A taxpayer can verify his or her return either electronically using e-verification code (EVC) or physically (send ITR-V to IT department in Bengaluru).

In case of e-verification, there are multiple options available, including verification by generating OTP (one time password) on mobile number registered with Aadhaar; verification through net banking (this is possible only when your bank account is linked with valid PAN); and verification using bank or demat account number which have to pre-validated on the e-filing portal.

After that, a confirmation message will be displayed saying that the return has been successfully e-verified with which the return filing process will be complete.

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