e-filing rules

Written by fe Bureau | Updated: May 21 2013, 08:07am hrs
If you are filing your income-tax returns electronically for the first time, here are a few precautions you must take to ensure that its completely error-free

With the government making it mandatory for all those with annual income of more than R5 lakh to file returns electronically, more and more people will now be required to do so. If you are e-filing your returns for the first time, it is imperative that you take certain precautions. First and foremost, it is crucial that there are no errors and all mandatory columns are filled. If there are any errors, the returns will be classified as defective under Section 139 (9) of the Income-tax Act, 1961.

From this year, e-filing is mandatory for even those taxpayers who claim tax-treaty benefit under Section 90 or 90A of the I-T Act. Also, e-filing is a must for taxpayers who claim relief from double taxation under Section 91 of the IT Act in absence of a tax treaty.

There have been some important amendment related to Form Sahaj (ITR 1). A person incurring a loss under the head other sources cannot file return of income through this form. Also, residents with assets outside India cannot use Form Sahaj.

While the deadline for filing returns is July 31, to avoid any last-minute hassle, its desirable that you dont wait for the last date. In case of refunds, till last year, it was mandatory to mention the bank account number and the nine-digit MICR code. From this year, the income-tax department has made it mandatory to submit bank details in all cases, irrespective of refunds or not. Also, instead of the MICR code, an assessee will have to quote the IFSC Code, which is an 11-character code for identifying bank branches where online fund transfer can be done and the code is unique for each branch. This is being done in case a refund arises after the I-T department does its calculations.

Most common errors committed by an assesse while e-filing returns are related to data, which includes non-filing of key schedules or giving wrong details. Bank details like account number and the MICR code should be mentioned clearly to ensure quick refunds. Also, tax credits available in Form 26AS should be verified before filing the returns. Any mismatch between Form 26AS and returns filed will be treated as incorrect filing and any anomaly should be taken up with the TDS deductor or the banker as soon as they are noticed. All dates of deposits should be mentioned in the dd/mm/yy format .

After filing returns, the ITR V form should be sent in time to the Central Processing Unit in Bangalore. If the acknowledgment is not received within a reasonable period, the assessee should call up the CPC centre. While filing returns, the assessee should mention his/her gender, mobile number, mailing address and email correctly. This will help in any kind of communication from the CPC. Senior citizens should take extra precaution while mentioning their date of birth as any mistake (lower age) will result in computation of higher tax.

Part A of the returns form consists of personal details, mailing address and the Permanent Account Number. Part B relates to the net salary amount (and not gross salary), other income and short-term capital gains tax. The assessee should ensure that the salary value tallies with the tax deducted at source. One of the reasons for difference in the refund amount during processing of returns is that details of tax payment done through TDS do not match with the data available with the I-T department.

Salary from all employers (if one has changed jobs in the year, the income needs to be clubbed), interest from fixed deposits and income from other sources should be clearly mentioned. Income from house property should also be clearly stated, including the full address and the municipal taxes paid. In the column for total short-term capital gains, the amount received from the sale of equity shares or units of mutual funds sold should be mentioned. Income tax from long-term capital gains should be entered separately.

Deduction for interest on housing loan should be entered in interest payable on borrowed capital column. This is restricted to R1.5 lakh for a self-occupied house. All eligible donations for the purpose of deduction under 80G to charitable institutions are restricted to 10% of total income after excluding income chargeable to special rates of tax. All deductions have specific criteria and limits for claims and the sum of all deductions cannot exceed the total income.

Also, if the assessee goes for any deductions, separate schedules are required to be filled for 80G, 80IA and 80IB. The quarterly breakup of capital gains in the capital gains schedule should be after setting off all losses: Filing of accurate quarterly breakup is needed. If there is any shortfall of tax payment, interest may be charged depending on when the returns are filed. Interest is charged if the return is file beyond due date. So, as you prepare to file your returns online, make a note of all the deductions, TDS and fill the form without any error. If some errors are still made, rectify them immediately.

Points to remember

* First and foremost, it is crucial that there are no errors and all mandatory columns are filled. If there are any errors, the returns will be classified as defective under Section 139 (9) of the Income-tax Act, 1961.

* From this year, e-filing is mandatory for even those taxpayers who claim tax-treaty benefit under Section 90 or 90A of the I-T Act. Also, e-filing is a must for taxpayers who claim relief from double taxation under Section 91 of the IT Act in absence of a tax treaty.

* A person incurring a loss under the head other sources cannot file return of income through this form. Also, residents with assets outside India cannot use Sahaj

* From this year, the income-tax department has made it mandatory to submit bank details in all cases, irrespective of refunds or not

* Instead of the MICR code, an assessee will have to quote the IFSC Code, which is an 11-character code for identifying bank branches where online fund transfer can be done and the code is unique for each branch

* Most common errors committed by an assesse while e-filing returns are related to data, which includes non-filing of key schedules or giving wrong details. Bank details like account number and the MICR code should be mentioned clearly to ensure quick refunds