Online Income Tax Return Filing if income above 5 Lakh

15286710.cmsIf you are used to the old-fashioned pen on the paper form of filing annual tax returns, you are going to have a bit of a problem this year. Earlier this month, the Income Tax Department issued a notification making e-filing mandatory for those with a taxable income of over Rs 5 lakh. This means that if you are not IT-savvy , it’s time to brush up your technical skills.

After all, July 31st the last date for filing the income tax return is not too far away. However, you don’t have to fret about it as the process is not as tedious as it is imagined to be. Once you follow a few simple steps and avoid the common mistakes , you could be through in a couple of hours. Also, you have some time on hand, as all the new forms are yet to be released. “Only ITR 1 (Form Sahaj) and ITR 4S (Form Sugam) have been released for e-filing ,” informs Vaibhav Sankla , director with tax consultancy firm H&R Block.

Keep preceding year’s return filed at hand

Before you start filing your income tax return, ensure that you have a copy of last year’s income tax return filed as well as the Form 16 issued by your employer on your desk. It will help you quickly refer to the figures and other details required while completing the form. Next, you should register yourself on the I-T Department’s website (www.incometaxindiaefiling and create an account.

Select the appropriate income tax return form

While this may sound elementary, the fact is that many tax-payers make this mistake quite often. This year in particular, you need to take additional care as the income tax return form you had chosen last year may not be applicable now. “Most taxpayers would now be required to use Form ITR 2 to file their taxes. This is because those having tax exempt income of more than Rs 5,000 cannot file their taxes in Form ITR 1 (that is Form Sahaj). Most salaried individuals are in receipt of several tax exempt allowances such as conveyance allowance, house rent allowance (HRA), leave travel allowance, etc, the total of which easily exceeds Rs 5,000 for a year,” explains Sankla.

Check your tax credit statement

Next, you need to figure out whether taxes deducted by your employer are reflecting in this form. “You should verify tax credits by viewing the Form 26AS downloaded from the e-filing portal,” says Sonu Iyer, tax partner and national leader, human capital services, Ernst & Young. The website www.incometaxindiaefiling facilitates viewing of the Form 26AS of the tax payer.

“The income and the details of the taxes deducted, advance tax or selfassessment tax paid should be taken into consideration while e-filing the return of income. This will ensure correct issuance of refund and avoid additional tax demands due to proper tax credits not being granted ,” says Suresh Surana, founder, RSM Astute Consulting.

Don’t ignore other income sources

Salaried individuals often choose to rely solely on their Form 16 for filing return, not realising that their income from other sources, too, is taxable. “This is a common mistake. Taxpayers do not include their income such as interest on savings bank deposits , fixed deposits, National Savings Certificate (NSC) and bonds while computing their tax liability.

Such income, even if minuscule in nature, is subject to income tax. Dividend received from co-operative banks is not exempt from tax and is required to be shown in the return of income. It should be ensured that the income aforesaid is included in your ITR form and taxes applicable are paid before e-filing of the return ,” says Surana.

Don’t deviate from your pan and details

Filling up the form meticulously may be a tedious exercise, but it will save you a lot of trouble later. Make sure you double-check to ensure that your ITR form mirrors the information mentioned on your PAN. “While e-filing the return, the taxpayer should ensure that the personal details mentioned in the ITR matches with the date as per the records with the Income Tax Department . This is because any discrepancy may derail the processing of the returns done from the Central Processing Centres (CPCs),” says Surana.

Similarly, enter your bank account details correctly. “For faster credit of income-tax refunds, correct bank account number and IFSC code in the Income-tax return should be mentioned. In case of any mistake in IFSC code or bank account number, the refund will not be credited,” says Iyer of E&Y.

Don’t leave the process incomplete

Remember, your task doesn’t end once you complete the return-filing process online. Unless, of course, you have obtained a digital signature (DS), that makes the entire process paper-free . Others have to send a signed copy of the ITR-V —acknowledgement form generated after e-filing is completed online — to CPC (central processing unit), Bangalore.

It should reach CPC by ordinary or speed post within 120 days from the date of uploading your return. If you choose to send the form via courier services, it will not be accepted. “It is only when signed copy of the ITR-V is received at CPC-Bengaluru that the return is treated as legally filed. It should be ensured that the document mailed to CPC is signed in original and in blue ink only,” informs Surana.

Source : The Economic Times