“My taxes have been deducted at source, no more tax to be paid.” Have you been thinking your responsibility ends there and you needn’t file returns?
Wake up! You need to do a fair amount of calculation based on your tax bracket and assess whether the tax deducted is sufficient to meet the liability. You will either have to pay more taxes or request income tax refunds based on your total tax liability.
Find out if you have been committing other bloopers, while filing tax returns.
Anybody whose income overshoots the threshold limit which is Rs. 2.5 lakh for the Financial Year 2015-16, needs to file a return. This limit is considered before you account for all the deductions.
Except the super senior citizens (80 years and above), everyone who has assessable income of more than Rs. 5 lakh has to compulsorily file returns electronically. That apart all those who want to claim refunds need to mandatorily e-file returns.
You need to check in your Annual Tax Statement, whether all the income tax deducted at source is being reflected. In case of discrepancies you will have to contact your employer or the tax deductor.
Mentioning accurate name, PAN and address details are essential. You might miss out on the tax credits by making such silly errors.
Mentioning accurate bank account details too are essential as now on all refunds would be directly credited to the bank account. One should avoid listing dormant or inactive bank account details as your refunds might bounce back. Thoroughly vet the details again before you submit the form. Ensure you don’t close down accounts mentioned in returns before you get the refunds.
Don’t count fixed deposit interest under the exemption window of savings bank account interest permitted under the section 80TTA. Even a single rupee earned as interest on fixed deposit and recurring deposit is chargeable to tax.
If you think you can easily escape submitting income details of one employer, having switched jobs during a year, you are mistaken. The data about earnings is now tracked through your PAN and is reported by companies, banks and other financial entities to the Income Tax department. So, avoid hiding income details. Similarly, if you own two house property, you will have to add rental income to your earnings even if you haven’t been receiving any. Mutual Fund, share and property capital gains, if any, needs to be disclosed.
Though dividends from stocks and savings bank interest up to Rs. 10,000 are exempt from taxes, you need to notify the Income Tax Department about it.
Reporting your earnings, savings and expenses through the year in a wrong form is a mistake which everyone should avoid as such returns are rejected by the Income Tax Department.
If you have opted to e-file returns then your task isn’t over once you submit your returns online. You need to either electronically verify the returns, using netbanking, Aadhar Card, email one-time password, etc. or post the e-filing acknowledgement (ITR – V) to the Bangalore CPC within 120 days of filing returns. Your returns are considered incomplete if you don’t verify and you would have to file them again.
If you have made a mistake in reporting your income and savings during the year, you can still correct the return by filing a revised return. A revised return can be filed within two years from the end of the Financial Year for which the return relates.
Ensure you keep these mistakes at bay and avoid penalties when you file tax returns for this Assessment Year 2016-17. Remember that March 31, 2017 is the last day to file your I-T Return for A.Y. 2016-17 without inviting penalty. Did we state it wrong? No, there is a distinction between Assessment and Financial Year, which you shouldn’t forget while selecting the return form.