Things to remember as you rush to file your return ahead of December 31 | Business Standard News

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To avoid any last-minute errors, one must remember to use the correct ITR form, collate all relevant income and expense documents for quick referral

ITR filing

If you’re waiting until the last minute to file your Income Tax Return (ITR), your time is almost up. Due to Covid-19, the due date for filing returns for FY21 had been pushed back several times, and now stands at December 31. If the impending tax deadline is stressing you out a bit right now, don’t worry. Nikhil Varma, managing partner, Miglani Varma & Co-Advocates, Solicitors and Consultants says, “The new portal to file ITRs that was introduced in June this year makes filing income tax returns relatively simpler and comes with several features that assist the taxpayer.” So, here are a few important things to remember if you are filing your ITR last minute. These will enable you to wrap up the job properly.

How to file: The number of ITRs filed is over 400,000 per day and increasing as the extended due date of December 31, 2021 approaches. So don’t wait for the last minute.

The foremost step is to collect the requisite documents such as Tax Deduced at Source (TDS) certificates, capital gains statements, salary slips to name a few from the concerned entities. Mukul Chopra, insolvency professional and senior partner, Victoriam Legalis-Advocates & Solicitors, says, “It is important to file the income tax return before the expiry of the deadline to avoid missing out on certain benefits provided by the tax regime, such as those on carry forward of losses etc. even though the penalty for not filing income tax return on time has been reduced to half, or Rs 5,000.”

The next step is to check the Annual Information Statement (AIS) so as to understand the various financial transactions done by the individual during the year. Note, that in case of any errors in the annual statement, one can file the return using Form 26AS. Chopra says, “One must check the TDS certificate with Form 26AS so as to ensure that tax deducted from income sources such as interest, salary etc. is deposited with the government and against your PAN.”

Suresh Surana, founder, RSM India, says, “In case some errors already exist in the AIS, the taxpayers are required to provide a feedback for the same on the Income tax portal.”

The next step is to compute the total income under various heads and claim the deductions allowed under the I-T Act and set off the losses, if any. Note that deductions can be claimed only if you have opted for the old tax regime at the time of filing returns. If one opts for the new tax regime, then common deductions and exemptions cannot be claimed. The next step is to compute the tax liability and file the return after all taxes have been paid.

Things to keep in mind while filing: Experts say those who file their returns on their own often get confused about a few things and make mistakes. Sameer Jain, managing partner, PSL Advocates & Solicitors, says, “To avoid any last-minute errors, one must remember to use the correct ITR form, collate all relevant income and expenses documents for quick referral, select the correct tax regime that will be applicable subject to the type of deductions one wants to claim, and lastly, carefully disclose the assets and liabilities.”

Choose the correct regime: The other crucial factor to keep in mind while filing the income tax return is to choose the right tax regime in accordance with your income structure or business. For instance, if one decides to opt for the new tax regime, then the same offers tax at lower slab rate but leaves out many exemptions and deductions available under the old tax regime.

Choose the right form: It is pertinent to choose the right tax form. After incorporating the relevant changes, the tax authorities notify such new forms every year. Keep a track of such changes so that there is no room for mistakes while choosing the income tax return forms.

Case of two forms 16: Many lost their jobs during the pandemic and got a new one when things started opening up post lockdown. Ideally, an employee changing a job within a particular financial year needs to furnish the details of the previous employer and salary details to the new employer in Form 12BB. And the new employer does the needful.

Surana says, “In case the employee does not furnish the details of the former employment to the new one, the employee would be required to combine and consider the details of both the Form 16 issued by the former and new employers and accordingly provide for all the details in the tax return.”

Thus, the employee has to consider the salary receipts from all the employers along with all the eligible deductions and exemptions during the year while filing his tax return.

Surana says, “Even if no Form 16 is issued on account of non-deduction of TDS or any other reason, the employee is still required to consider the salary details from such employer for the purpose of determination of tax in the return of income. The aforementioned approach needs to be adopted in case the employee had employment with more than two employers during the year.”

After filing the ITR: Once you have a file, there are a few things you need to keep in mind. Chopra says, “It is very important to verify your income tax return after you have filed it. One hundred and twenty days are given to verify the return electronically or physically. Non-verification shall be deemed to be non-filing of the income tax return.”

Filing a revised return: If you unintentionally failed to include certain income or forgot to claim additional exemptions, then file a revised return. There is a chance one would have forgotten to include interest income or even misplaced a donation receipt to claim exemption under Section 80G.

Moiz K Rafique, managing partner, Privy Legal Service LLP, says, “A revised return can be filed even before receiving an intimation u/s 143(1). You can file a revised return under Section 139(5) of the Income Tax Act. Earlier, it was not permitted to file a revised return for returns filed after the due date. However, from April 1, 2017, you can file a revised return even for belated returns.” This is applicable for Assessment Year 2017-18 and onwards. It should be emphasized that, under Section 139(5) of the Income Tax Act, filing a revised ITR technically entails filing a new ITR with the corrections.

What to do in case you stand to get a lower tax refund? Varma says, “Complaints of a reduced income tax refund amount are not uncommon, thanks to the many glitches on the new portal. In such cases, the taxpayer is required to file a rectification request under Section 154 of the Income Tax Act to claim the balance tax refund.”

Last-minute ITR filing oftentimes leads to unwanted errors on the part of a taxpayer. So pay attention to common errors would be mentioning the wrong bank account number, forgetting to declare interest income, or claiming wrong deductions, etc.

How to file ITR online:

  • Go to the Income Tax e-Filing portal http://www.incometax.gov.in/iec/foportal/
  • Login with user ID (PAN), Password, Captcha code and click ‘Login’
  • Click on the ‘e-File’ menu and click ‘Income Tax Return’ link. Then PAN will be auto-populated, Select ‘Assessment Year’, Select ‘ITR form Number’, Select’ Filing Type’ as ‘Original/Revised Return’ and Select ‘Submission Mode’ as’ Prepare and Submit Online’
  • Click ‘Continue’, read the instructions carefully and fill all the applicable and mandatory fields of the Online ITR Form.
  • Choose the appropriate Verification option in the ‘Taxes Paid and Verification’ tab. Click on ‘Preview and Submit’ button, Verify all the data entered in the ITR and submit the ITR.
  • e-Verification can be done by entering the EVC/OTP when asked for.
  • The EVC/OTP should be entered within 60 seconds else, the Income Tax Return (ITR) will be auto-submitted. The submitted ITR should be verified later by using ‘My Account > e-Verify return’ option or by sending signed ITR-V to CPC. To view the uploaded ITRs

Source: Privy Legal Service LLP

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