Income Tax Return 2019: Today is the last date for income tax return filing for AY 2019-20, and as a taxpayer, you should be aware of all the essential steps to file your ITR easily and accurately.
Income Tax Return Last Date: Though income tax return (ITR) filing is an exercise to be carried out every year, yet many people find it difficult to file their taxes. However, it is not as difficult as it seems. Today is the last date for income tax return filing for FY 2018-19, and as a taxpayer, you should be aware of all the essential steps to file your ITR easily and accurately. Here they go.
Steps necessary to file ITR:
1. Know your tax slabs
It is essential to know the tax slabs applicable to you for a particular financial year. Depending on the income tax slabs, your tax liability for a given financial year will be calculated. Each category of income per annum will correspond to a specific percentage of tax. Additionally, a certain percentage of health and education cess will also be applicable.
For the assessment year 2019-20, the income tax slabs applicable to individuals aged below 60 years are given below:
2. Choosing the right ITR form
You must choose the right ITR form based on your source of income and the properties you own. You can differentiate between the types of ITR forms when you go through the criteria mentioned below:
ITR-1: Resident individuals who earn an income from salary or pension, own one house property, and other sources with an annual taxable income within Rs 50 lakh. Those who have held unlisted equity shares at anytime during the year or are director in a company cannot file ITR-1. This form cannot be filed by those who have earned capital gains/losses.
Watch: How To File ITR-1 for AY 2019-20 in less than 15 minutes; Explained on Income Tax Portal
ITR-2: Individuals who have income above Rs 50 lakh, have capital gains, own more than one house property, or have foreign income/asset have to file returns with ITR-2 form. Also, people holding directorship in a company and holding unlisted equity shares anytime during the financial year 2018-19 will have to file the ITR-2 form.
ITR-3: When an individual’s source of income is from a business/profession, then he can file returns in the ITR-3 form. It can include every income from ITR-2 as well.
ITR-4: You must use ITR-4 form to file returns if you want to declare your income from business or profession income under presumptive taxation scheme.
There are a few online platforms that automatically pick the relevant ITR form based on the information provided and the taxpayers don’t have to worry about choosing the right form. Using them for filing returns can make your tax filing easy this year.
3. Changes in ITR forms
Several changes have been announced in the new set of ITR forms for the assessment year 2019-20. A few major changes made are listed below:
# ITR-1 requires you to declare detailed income calculation, i.e. from salary and house property. You will have to provide a full break-up of all the salary details including exempted allowances and deductions.
# Non-residents cannot file ITR-1. Instead, they must choose ITR-2 and ITR-3.
# If you have sold a property in the financial year 2018-19, it is mandatory to provide complete details of the buyer of your property while filing ITR-2 form.
# ITR-3 requires you to specify the aggregate turnover as reported in GST returns.
# An individual or Hindu Undivided Family (HUF), who is a partner in a firm, must file ITR-3 for the assessment year 2019-20 instead of ITR-2 as followed earlier.
# Those who miss the deadline and file after the due date have to pay Rs 5,000 in penalty. If you fail to file ITR by the end of the assessment year, a late fee of up to Rs10,000 will be charged. This late filing fees will be paid before submission of the ITR. However, penalty is restricted to Rs 1,000 if total income is up to Rs 5 lakh.
# Only those who are more than 80 years old and don’t have income from business and profession can file in the paper mode.
4. Verifying Form 26AS with Form 16
Download your Form 26AS from the TRACES portal before you proceed with filing your tax returns. Compare it with your Form 16 to check if the tax deductions made on salary and any other income are accurate in Form 26AS. In the case of any mismatch, the errors must be reported to the employer or payer before proceeding with filing of tax returns.
5. Claiming deductions
Don’t forget to claim deductions for certain eligible investments made during the financial year. For instance, you can claim a sum of up to Rs1.5 lakh under section 80C for your provident fund contribution, life insurance premiums, repayment of housing loans, and payment of tuition fees for children.
If you are a salaried individual and have disclosed all your tax saving investments to your employer then you don’t have to worry about claiming the deductions. The employer must have adjusted your taxes based on your eligible investments. However, in case you have missed submitting proofs to your employer, then also you can claim those while filing your income tax returns.
6. Report all the other income
Make sure to disclose all the income earned during the financial year from different sources like interest from fixed deposit, interest from savings account, any family pension earned, and so on. You can fill in the details of all these incomes in the ITR form applicable to you.
7. Verify your tax return
Once the tax return is uploaded, you will have to verify your income tax return through different modes available. Your return can be e-verified via netbanking and a few other methods. However, net banking is the simplest way to e-verify your tax return. You can also verify through an offilne mode by sending a printed and signed copy of the acknowledgement (ITR-V) to the Central Processing Center Bengaluru.
Also, keep all the necessary documents such as Form 16, payslips, interest income certificates, Aadhaar card, PAN card, investment proofs, and donation receipts ready with you when you sit down to file your taxes. It is also advised to keep a copy of the returns filing statement from the previous year. This helps you file returns quicker.
(The author is Founder & CEO, ClearTax)