FAQ on Income Tax Return Filing and more

Income Tax Return Filing
Income Tax Return Filing

FAQ on Income Tax Return Filing and more.. I have changed my job during the Financial Year. What should I do? It is seen in most of the cases that when an individual switches a job, he/she forgets to mention income received from previous employment to the current employer. Each employer provides a Form 16 which contains the details of salary income received by the employee and tax deducted on it. Both current and previous employer prepares a Form 16 calculating taxable income in which it gives a maximum exemption limit of Rs. 200,000 (for FY 12-13 & FY 13-14). Thus it happens that one individual gets the benefit of exemption limit more than once. This often leads to less deduction of TDS due to which interest becomes applicable on remaining tax payable amount. You should always mention the below details to your current employer:

  • Income received from previous employment. This will help the current employer to calculate your consolidated income for the financial year.
  • Amount of TDS deducted on your income from previous employer. The current employer will deduct TDS accordingly.
  • Tax saving investments made on your behalf by the previous employer.

The return is prepared by consolidating all income received during a financial year. Gross Taxable Income (GTI) is calculated and taxes are paid after giving the maximum exemption limit only once. I have forgotten to mention my tax investment details in Form 16. How can I claim it? Often salaried individuals forget to provide their tax saving investment details to the current employer while preparation of Form 16 or deduction of TDS. Due to this excess tax is deducted from the salary and it leads to the problem of claiming refund of TDS. The tax saving investments made can still be shown while filing the income tax return and the excess TDS can be claimed. Even if you have switched your job and made the tax saving investments during the financial year, the details of such investments can be furnished in the ITR Form. The maximum deduction that can be claimed on these investments cannot exceed the taxable income during the financial year. Please note that no documents for such investments are to be furnished while filing the Income Tax Return. I receive HRA and also make payment of housing loan. Can I claim both benefits? In the Income Tax Act, HRA and Interest on Borrowed capital (Housing Loan) are two different topics and has no interlink with each other. One can claim HRA if he satisfies the necessary conditions for claiming it. It has no interdependence on claiming of interest on housing loan. Further, Interest on Housing loan can be claimed if one makes payment for the loan interest during the financial year. The amount of exemption to be claimed depends if the house property is let out or self occupied. What are the investments I can make under 80C? What is the maximum limit? You can claim a maximum deduction of Rs. 1 lakh under 80C of Chapter VI of the Income Tax Act, 1961. If you are in the tax bracket of 30% then you can save taxes of up to Rs. 30,000 if investments are made in 80C. The following investments can be made under section 80C:

  • Public Provident Fund (PPF)
  • Voluntary Provident Fund (VPF)
  • Home Loan Principal Repayment
  • Life Insurance Premiums
  • Senior Citizen Savings Scheme (SCSS)
  • 5-year Bank FDs
  • 5-year or 10-years NSCs
  • Post Office Time Deposit Scheme
  • Term Deposit Schemes from Government Companies
  • Equity Linked Savings Scheme (ELSS)

What are the other investments that I can make apart from 80C? Deductions under Chapter VIA of the income tax act can be claimed by salaried individuals if you make payment for the investments. The lists of common investments are shown below: 80 D – Medical Insurance Premium 80 E – Interest on Education Loan 80 G – Donations made How should I plan my income and investments for the financial year and by when? You should plan your taxable income and make tax saving investments before 31st March of the financial year. If the planning is done properly before time, it helps to reduce payment of unnecessary taxes. If the investments are not fully utilized i.e you still have options of making investment to save taxes, you can still get time to make such investments to reduce tax.  Further, if less tax is deducted from your salary and you still have some tax liability, you can make an estimate of the tax liability and make advance payment of it to be relieved from the interest which is applicable on less tax payment and when the tax payment is above 10,000. I also have other income apart from salary income. What should I do? Many salaried individuals have other income too apart from their salary income like rental income, business income, capital gains income, other sources income, etc. If you earn such income it must be included in your Gross Taxable Income (GTI) while filing the return and necessary taxes should also be paid on it. Taxes would be applicable as per the normal income tax slab for an individual. If TDS has already been deducted on it then remaining tax payment, if any, should be made. If there are any losses then it can be adjusted as per the provisions of the income tax act. I have some tax liability. How and when should I make the payment? There may be cases where you may be required to make some tax payment due to less deduction of TDS or having other income on which TDS has not been deducted. In case of salaried individuals, taxes are deducted as TDS from the salary. When less TDS is deducted then you should calculate your tax liability and make payment of the taxes as advance tax to save yourself from interest applicable on late payment of taxes. If you have some other income and no TDS has been deducted or less TDS has been deducted then you should make tax payment as per your income tax slab. The tax should be paid as advance tax or else interest would be applicable on late payment. Excess tax has been deducted from my salary. How do I claim the refund? Sometimes employer deducts excess tax from salary. It may be when you fail to provide your tax saving investment details to the employer or by mistake excess TDS payment has been made. In such a case you need to file your Income Tax return in order to claim the refund of the amount. Also, you need to provide your Bank Account details (Name, Account no., Type & MICR) in order to get the refund credited. ECS option can also be selected and cheque is issued if payment is above Rs. 50,000. I want to file my Income Tax Return. What details should I provide? There are few basic details which you need to provide while filing your Income Tax return. Below mentioned details are mandatory:

  • Full Name
  • Father’s Full Name
  • Date of Birth
  • Full address (permanent or current address)
  • Mobile Number
  • Email Id
  • Jurisdiction Ward
  • PAN number

Apart from these basic details, details of income are to be provided as per your source of income and ITR form to be submitted. What documents do I have to send to the income tax department after filing my return online? Many are confused about the documents that they have to send to the income tax department along with the Acknowledgement. No documents apart from ITR-V (duly signed only if filed without Digital Signature) are required to be sent to the Income Tax Department (CPC) after filing the income tax return. The department processes the return based on the details filled in the form and does not ask for any proof until and unless it finds any discrepancy in the return. Even the documents of tax savings investments or expenses are not to be sent to CPC along with ITR-V form. Full TDS has been deducted from my salary and I have nil tax payment. Do I need to file my income tax return? If your income is above Rs. 500,000 it is mandatory to file income tax return. In case your income is below Rs. 500,000 it is not mandatory to file income tax return but there are some conditions to it which needs to be satisfied. Further, it is always recommended to file your income tax return to maintain your income record for the financial year and to declare a valid proof of you income when needed. My salary income is less than 5 lakhs. Do I need to file my income tax return? Department had issued a notice in which it said that you do not have to file income tax return if income is below Rs. 5 Lakhs. But the above is only true if you satisfy the below condition:

  • Only Salary income earned and full TDS deducted on it.
  • Interest on savings bank account is less than Rs. 10,000.
  • No other source of income.
  • No tax payable or refund

If these conditions are not satisfied, you are required to file your income tax return. Further, filing of income tax return has also following benefits:

  • 3 Years returns are required for Loan Application
  • Income Tax Returns are to be produced while applying for visa
  • Maintaining your Tax Return and Income related documents is a must for everyone
  • Acts as a legal proof of your income during the financial year

What is ITR-V? What do I have to do with it? Many are confused with ITR-V to be an ITR-5 Form (‘V’ for roman five). ‘ITR-V’ stands for Income Tax Return-Verification Form. It is an acknowledgement which is generated automatically after filing a return online. It contains the basic details of income mentioned in the ITR Form while filing the return along with the date of filing the return, acknowledgement no and the details from where the return was filed. If the return is filed online with Digital Signature then it is not required to be sent to CPC Bangalore for processing. In case the return is filed without Digital Signature, you have to duly sign the ITR-V and send it to CPC Bangalore (address along with instructions mentioned in the ITR-V) within 120 days of filing the return. After the ITR-V is received by the department, an ITR-V receipt is emailed to the email id mentioned in the return form. If there is any mismatch in the signature then the ITR-V is rejected and you are required to send it again. How do I know that my return is processed? When you file your return online, the return is processed by CPC Bangalore. The status of the return can be checked online at the Income Tax Department website i.e. www.incometaxindiaefiling.gov.in Further, once the return is processed the department sends an intimation u/s 143 (1) which states the status of your return filing. The following 3 status are reflected in the intimation:

  • If there is any tax demand determined the department will mention the reason for the demand and the amount of tax payable after interest. If you find any discrepancy against the demand you can file a rectification u/s 154 stating the reason of discrepancy.
  • If there is any refund processed the department would calculate the interest and mention the net refund amount.
  • If there is no demand no refund, the intimation would reflect ‘0’ under Tax payable/refund. No further action is required.

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