10 must-do things while filing your income tax return

Corporate Laws and Indirect Taxation Laws Practitioner.

With the due date of July 31 fast approaching, it is that time of the year again when the nation’s tax payers scramble to file I-T returns. After all, filing of tax return is compulsory for everyone whose gross total income exceeds the basic exemption limit. 

For financial year 2007-08, for instance, the basic exemption limit was Rs 1.45 lakh for women below 65 years of age, Rs 1.95 lakh for senior citizens and Rs 1.10 lakh for any other individual. However, for financial year 2008-09, the limit has been increased to Rs 1.80 lakh for women below 65 years of age, Rs 2.25 for senior citizens and Rs 1.50 lakh for males below 65 years. 

Thus, if your income for the year exceeded the exemption limit, you will be required to file the return by the due date. "You need to file the tax return even if you are not paying any tax or even if your employer has deducted tax at source," says Ashish Kapur, CEO, Invest Shoppe India Ltd. 

However, despite all the precautions taken by you, rush-hour filing may mean that you could inadvertently miss out on certain details and disclosures, and therefore be on the bad books of the taxman. If not that, you might just forget to make the most of the tax breaks available to you, thus paying more tax in the process and claiming no or less return. Here are 10 important things to do before filing your I-T return: 

Identify Sources of Income 

Firstly, you need to identify your sources of income under different heads. Under the I-T Act, all incomes earned by persons are classified into five different heads, such as income from salary, income from house property, income from business or profession, income from capital gains, and income from other sources. Thus, you should identify all your incomes from different sources, just to ensure that you haven’t missed out something while filing your return. 

Refer to the Basic Documents 

According to Vikas Vasal, executive director, KPMG, some basic documents/information that should be referred to while filling the return include: 

· Form No 16 (issued by the employer): This shows the income from salary and tax deducted by the employer on the same. 

· Summary of all bank accounts during the year: This summary gives an idea about the income earned during the year, investments made and other expenses. This will ensure that neither any income nor any eligible deductions are left out in the return. 

· Details of tax paid during the year: This is required in case the individual has paid any advance tax during the year. 

· Income of a minor child: This is to be included (except in few cases) even if it is a small amount, e.g. bank interest. 

Compute Your Tax Liability 

Having identified your sources of income and after referring to the basic documents, you need to compute your tax liability for the year. If you are familiar with the process and are comfortable with doing it, you can do it all by yourself. If not, you should take the help of a tax expert or a CA or some other qualified professional. This is important as a wrong computation of your tax liability can land you in trouble later on. 

You also need to ensure that "if any tax is payable, the same has been paid as ‘self assessment tax’ before filing the tax return. Further, if any interest is payable for late payment of tax, then the same has also been deposited," says Vasal. 

Chose the Right Form 

Once the details in respect of income and expenses are collated, you should check which tax return form is applicable to you. With the introduction of new forms, based on the nature of income earned during the year, you should select the right income-tax form. 

For example, there are two I-T return forms -- ITR-1 and ITR-2 - available for salaried individuals at the moment, and your sources of income will decide which form to use. Use the first form if your income is from salary, pension or interest earned in the financial year, and use the second one in case of any capital gain, income or loss from house property and income from any other source. There is another form - ITR-4 - which is meant for individuals having income from a business or profession. The Tax Department will refuse to accept your form in case you have chosen the wrong one. 

Fill in Correct Personal Details 

Ensure that you fill in correct personal details in the form meant for you, especially your name, address, bank account details and PAN number. Bank account details include the bank account number, type of account and the bank’s MICR code. "This is crucial, especially if you are claiming a refund. Likewise, your PAN is very important because the tax laws levy a fine for not quoting or misquoting your PAN number," says Kapur. 

Claim all Deductions 

Ensure that you have, under various sections of the I-T Act, claimed all the deductions that you are eligible for. For example, 

a. Under Sec 80 C - For investments made like PF, PPF, NSC, school tuition fees of children, insurance premium, investments in specified mutual funds etc. 

b. Under Sec 80 G - Donations made to charitable organizations 

c. Housing deduction for interest on housing loan etc. 

Information of Specified Investments/ Exempt Income 

You also have to fill in information in respect of specified investments, as per prescribed limits, such as: 

# Property bought or sold in excess of Rs 30 lakh 

# Mutual funds, in excess of Rs 2 lakh 

# Cash deposits in excess of Rs 10 lakh 

# Credit card payments in excess of Rs 2 lakh 

# Bonds etc in excess of Rs 5 lakh 

It is also important to know that certain income that is exempt (i.e. income which is not taxable) is also required to be disclosed in the I-T return form. For example, dividend received and receipt of PF balance, among others. Not disclosing these incomes may land you in trouble also. 

Claiming a Loss 

If you are planning to claim a loss in the income-tax return, which you would like to carry forward, the same can be done, only if the return is filed by the due date. If this filing deadline is not met, then the loss claimed would not be allowed to be carried forward for future set off against income. 

File By Due Date & In the Right Tax Jurisdiction 

After the tax return is filled in, the next step is to file it appropriately, by the due date. For individuals having salary and interest income only, the due date of filing the tax return for the financial year 2008-09 is July 31, 2009. The return may be filed either electronically or in printed form. In few cases, even the electronically-filed return has to be filed in printed form within a given time period. 

"One must also ensure that the return is filed with the right tax officer (tax jurisdiction). This is determined based on the address of the individual. In case of salaried employees, the jurisdiction is determined by particulars of the employer," informs Vasal. 

The proof of filing the return is the acknowledgement, which is stamped and signed by the tax officer and a copy is returned to the individual. 

One important thing to remember is whether it is electronic filing or paper filing, now individuals do not have to attach any document or attachment with the return of income. 

Maintain Documents For Future Reference 

The documents based on which the return is prepared may be requested at a later stage by the Income Tax Officer to check the correctness of the claims made. Failure to submit details may lead to disallowance of the deduction claimed, resulting in an increase in the tax liability or a decrease in refund. "Hence, it is advisable that all the documents required to substantiate the return are maintained by the tax payer for future reference," says Vasal. 

These are the few important points which you should bear in mind while filing your return. The golden rule is to be organised in your paper work and be timely in paying tax and filing the tax return.

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1. Check your PAN card and the PAN the you propose to use.

2. Go to the site www.incometaxindia.gov.in and check your PAN and the jurisdiction of your Officer.

3. Prepare your Balance Sheet or Statement of affairs, even if you are not mandatorily required to do so. It helps check whether every aspect of what should comprise of your computation goes into it or not.

4. Prepare your Bank account Summary and cross check the same with your Statement of Affairs.

5 Prepare the computation of Income.

6. check Statement AS26 recd from department or obtain the same from the website www.tin-nsdl.com to check whether taxes deducted by others are reflected therein or not, the credit for advance taxes paid by you and any other taxes paid by you.

7. fill up form applicable to you with the help of return facility available on site www.incometaxindia.gov.in.



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thankyou......both of you for sharing wid us!!!!!!!!


Thanks for this useful information....




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