Income Tax Return (ITR) filing: If you are one of those who have still not filed their income tax return (ITR) for AY2016-17 and AY2017-18 or want to revise it, then you need to do it as soon as possible. For, you have very limited time to do so. The Income Tax Department has already warned taxpayers to ‘Come Clean’ and file their belated or revised income tax returns latest by 31st March, 2018, or be prepared to face penalty or prosecution, depending on the case.
However, while doing so you need to be extra careful to report all your income and other details carefully, otherwise you may have to pay heavy penalty if caught by the I-T Department. It is also possible that you may forget a few things while filing your return. Therefore, you must keep the below-mentioned things in mind while filing your revised or belated ITR before March 31:
1. If you have deposited cash exceeding in aggregate of Rs 2 lakh during the demonetization period (8th Nov 2016 to 30th Dec 2016) in any of your bank account, including your loan account, then it is important to report it in your tax return in bank account details.
2. If the cash deposited during the demonetization period amounts to your unaccounted income, “then it is important for you to add it in your taxable income for the year to which it relates and pay the due taxes on it. Also, if required, you can revise the return for F.Y. 2015-16 and 2016-17, if already filed,” says Chetan Chandak, Head of Tax Research, H&R Block India.
3. However, those who are either not able to explain the year or manner of earning such income have to pay taxes as applicable on such income @ 60% along with the applicable interest and penalty.
4. A taxpayer who has not opted for the PMGKY scheme and offers his black money in his Income Tax Returns will be required to pay total tax and penalty of 77.25 %. However, “if you do not file the return disclosing your income in a correct manner and if caught latter in any scrutiny assessment, then you will have to pay 83.25% of the undisclosed income as tax and penalty. In case if any raid is conducted on you, then you will have to pay 107.25 /137.25% as tax and penalty on your undisclosed income, depending on whether or not you voluntarily surrender your undisclosed income during the search,” says Chandak.
5. Apart from this, also insure that while you file your tax return, reconcile it with your Form 26AS so that you don’t miss any income already reported in it.
6. Insure that you fill all the mandatory schedules as may be applicable in your case, viz.
# Asset and liability schedule is mandatory if your total income exceeds Rs 50 lakh.
# If you are a resident of India for tax purposes and have any foreign bank accounts, financial interest in any foreign entity, if you hold any immovable property or any other assets located outside India, have signing authority in any account located outside India, or are settlor, beneficiary or trustee in any trusts created outside India, then filing up Foreign Asset Schedule and reporting related return in your tax return is mandatory for you. If you miss this, you may have to pay hefty penalties.
7. Do not forget to verify/ e-verify your tax return at the earliest possible. “Unless you verify it within the time allowed, your return will become invalid and may result in delay of your refunds or you may have to pay interest and penalties for not filing the return in time,” says Chandak.
8. If you have received any salary or pension arrears, you are eligible to claim tax relief under section 89(1), but for claiming this relief you should file Form 10E. If you fail to file this form, your claim may be disallowed by the Income Tax Department.