The deadline (July 31) for filing income tax returns for individuals for financial year 2016-2017 (not covered under tax audit) is fast approaching.
The deadline (July 31) for filing income tax returns for individuals for financial year 2016-2017 (not covered under tax audit) is fast approaching. It is advisable to start preparing early to avoid last-minute rush and complete filing tax returns well within the deadline. Here are the key essentials one should keep in mind for filing tax returns:
Collate relevant documents
TDS certificate: If the taxpayer is a salaried person, Form 16 should be collected from the employer. Similarly, in case of any other income like bank interest, fixed deposit interest on which tax is deducted, Form 16A should be collected from the deductor. This will enable the assessee to report the income and claim TDS credit for the same. Form 26AS: All taxes deducted by the deductor will automatically appear in Form 26AS, which is available on one’s account with the I-T department portal. Once Form 16/Form 16A is received, the same can be reconciled with what is reported in Form 26AS.
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Proofs of investments made: Individuals should collate all documents relating to investments made or expenses incurred during the year. For instance, collect receipt of donation paid along with the 80G certificate, medical premium paid, LIC premium paid, etc., to enable the individual to claim appropriate deduction for the same. Housing loan certificates: Interest paid and principal payments for housing loan taken are eligible for deduction subject to certain conditions and limits. Hence, obtain interest and principal paid certificate from their bankers well within time and reconcile the same with the payments made to enable them to claim appropriate deduction.
Updated bank statements: Taxpayer should get the bank passbook updated or obtain bank statement up to March 31, 2017. This will help the taxpayer to consider income correctly in the
Tax challans: Advance tax or self-assessment tax payments made by the taxpayer should be maintained to consider the details in the income tax returns. Aadhaar number: It is mandatory to quote the Aadhaar number in the ITR Form from July 1, 2017. In case an individual has applied for an Aadhaar card, the enrolment ID can also be quoted in the returns. Recently, the ministry of finance clarified that certain individuals will be excluded from quoting Aadhaar number.
Income over Rs50 lakh
Where an individual’s total income exceeds Rs50 lakh, it is mandatory to report details of specified assets and liabilities. In the new income tax return forms, additional details of immovable property, insurance policies, movable assets, archaeological collections, etc., are now to be reported Hence, one should start collating such details. In case of Residents and Ordinarily Resident of India, all assets held in India and outside India need to be reported, whereas for Non-Residents and Resident & Not Ordinarily Residents, only assets held in India need to be reported.
Report foreign assets
Residents and Ordinarily Residents of India need to report details of foreign assets held in FY 2016-17 like foreign bank account, immovable property outside India.
Report all bank a/cs
Taxpayer is required to report all bank accounts held at any time during the previous year in the tax returns. Therefore, every taxpayer should collect details like name of the bank, IFSC code, and bank account number for all bank accounts held by him during the financial year. The taxpayer can omit dormant bank accounts, which have not been operational for the past three financial years.
Cash deposits during demonetisation
In case the taxpayer had deposited cash of Rs2,00,000 or more in any bank accounts/loan accounts/ credit card accounts, etc., during the demonetisation period, then he is required to mandatorily report details of the same in the returns form.
Various incomes like dividend income, Public Provident Fund interest income, tax free interest, etc., are exempt from tax but have to be reported in the tax returns. In case taxpayer has earned dividend income from Indian companies in excess of Rs10 lakh, then the same is taxable.
The writer is partner, Deloitte Haskins and Sells LLP. Inputs from Niji Arora, senior manager and Tarika Goel, deputy manager, Deloitte Haskins and Sells LLP.