It is that time of the year where any taxpayer whose accounts are not liable to be audited are required to file their income tax returns (‘ITR’). The due date for filing ITR for the month period April 2015 to March 2016 is July 31, 2016. As most of us are aware, ITRs can now be filed electronically online with the help of “ITR utilities” which can be downloaded from the income tax website and which work within the boundary of technological specifications. Accordingly, any discrepancies in filling the electronic form may corrupt the ITR utility and make the filing process tedious and complicated. We have enumerated some of the common mistakes that need to be avoided while filing ITR electronically.
Correct Utility: Income tax website provides two types of utilities for return filing i.e., Excel utility and Java Utility. The first step for a tax payer is to ensure verify that their system software matches with the software required for filing the ITR utility. For eg as per the income tax website, Java Utility can run on operating systems like Windows 7.0 or above, latest Linux and Mac OS 10.10(OS X Yosemite), where Java Runtime Environment Version7 update 6 (jre 1.7 is also known as jre version 7) or above is installed. Further, for Excel utility you should have Microsoft excel 2003 and above. A tax payer who needs to file ITR-1 and ITR-4S can directly fill and upload ITR online by login on to the income tax website without downloading any utility.
Punctuations and shortcuts for data entry: ITR utility does not accept special characters such as -, _, &, !, ^, <, >, #, ~, %, or *. Further, data should be manually entered in the utility and shortcuts for cut, copy, paste, etc should not be used. Punctuations and shortcuts corrupt the ITR utility requiring the tax payer to fill the form afresh.
Understanding Instructions and Format: Instructions to fill the ITR is available separately for different forms. The instructions provide a clear understanding of the content and format of data to be entered in each schedule. It is highly recommended to read these instructions carefully before filling the ITR form.
Schedules pertaining to TDS and TCS: More often than not, the details in TDS and TCS schedule run to many line items. In such a case, an option to add rows is available in the income tax return. It is important to delete the rows added and not required before running the Utility.
Bank details: Providing details of atleast one bank account is mandatory in the income tax return form. Refund, if any due, is credited to the bank account details provided in the ITR form. Accordingly, it is very important to provide the correct details in this field. The bank account number should be as per Core Banking Solution (CBS) system of the Bank. Further, details of dormant account i.e., account which is not operational for more than 3 years is not mandatory.
Prefill Function: Java utilities provide prefill function button which prefills all the basic details like name and address, PAN etc., along with the details of TDS deducted during the year as per data available on income tax website. The data auto filled by using the prefill function can be manually edited if the taxpayer feels that incorrect data has been imported. Accordingly, one should check each and every detail filled in the ITR whether the same is filled manually or imported using ‘prefill’ function.
Rectify mistakes: Presently the ITR utilities provide ‘validate’ and ‘check’ function which detects mistakes and generates an error report. This helps to identify and rectify the mistakes. After electronically filing the ITR form, taxpayer should download acknowledgement (ITR-V) and thoroughly verify the details appearing in ITR V. If the taxpayer finds any mistakes in the original ITR, he can rectify the return by filing a revised ITR. All the return should be filed before the due date to comply with the provisions of law.
For income above Rs 50 Lakhs: With Assessment Year 2016-17, individuals and HUFs having income more than Rs 50 lakhs, will be required to declare the cost of assets as at the end of the year, along with details of liabilities taken in respect of such assets i.e., loan obtained for acquiring the assets, in Schedule AL of the relevant form. Assets to be disclosed include land, building, jewellery, vehicles, yachts, boats, aircrafts. The taxpayer should ensure that all details required in ITR are dully filled.
Neeraj Agarwala is Partner and Neetu Brahma, Manager, Nangia & Co.