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Filing Your Income Tax Returns? 5 Rules To Keep In Mind

Adhil Shetty

The deadline for filing your income tax return is July 31, 2018. You can file your returns after the deadline too, but a penalty of Rs. 5000 will be levied for filing belated returns before December 31. The penalty goes up to Rs. 10,000 if you file it after December 31. But if your taxable income is not more than Rs. 5 lakh, maximum penalty is Rs. 1000 only. Hence, it is crucial to file I-T returns on or before July 31 to avoid penalty.

You can file your returns either physically or online. Since filing returns online is convenient, e-filing is preferred by most individuals. If your income is above Rs. 5 lakh, it is mandatory to e-file returns.

Also, it’s now mandatory to link Aadhaar with PAN before you can file your returns. This is done to minimise instances of tax evasion.

With the filing date nearing, here are a few important norms to keep in mind for a successful e-filing.

Taxable Income Eligibility

Many people have misconceptions about filing returns. While some feel their income is not taxable, other taxpayers believe that their tax deducted at source is enough to ensure tax compliance. The rule is that if your gross taxable income is above the basic exemption limit, you must file returns. It is also a good practice to file returns even if your income is not taxable as your ITR statement come handy while applying for loans, Credit Cards, visas, etc. Here is a table to give you a clarity on the taxable income.

Income slab

 

Tax Rate (for individuals less than 60 years) Income slab Tax Rate (for individuals between 60-80) Income slab Tax Rate (for individuals over 80 years)
Up to Rs. 2,50,000 Nil Up to Rs. 3,00,000 Nil Up to Rs. 5,00,000 Nil
Rs. 2,50,000 to Rs. 5,00,000 5% Rs. 3,00,000 to Rs. 5,00,000 5% Rs. 5,00,000 to Rs. 10,00,000 20%
Rs. 5,00,000 to Rs. 10,00,000 20% Rs. 5,00,000 to Rs. 10,00,000 20% Above Rs. 10,00,000 30%
Above Rs. 10,00,000 30% Above Rs. 10,00,000 30%    

You Should Pick The Correct Form

Choosing the correct form is essential to filing I-T returns. It is important to understand which form is applicable to taxpayer and file returns accordingly. The ITR-1, also called the SAHAJ form, is for salaried taxpayers with income up to Rs. 50 lakh from salary. You can also include income from one house property as well as income from other sources, but excluding income earned from lottery and race horses.

You Should Declare Your Interest Income

Most taxpayers are of the notion that interest income is exempt from tax. But that is not true. Interest income from Fixed Deposits is fully taxable. Besides, you can claim tax exemption on interests in Savings Bank Account up to a maximum of Rs. 10,000. You get charged TDS at 10 per cent when the interest income is above Rs. 10,000. So, do keep in mind to declare your interest income.

Check TDS in Form 26AS And See If The Details Match

The onus of checking on any discrepancy on tax deducted on your behalf and credited to your PAN rests on you. So you should download Form 26AS and check all the TDS details there. If there is any mistake, flag it and get it sorted. Also, if the tax deducted is less than the total tax to be payable by you for the financial year, pay the balance before filing the returns. If TDS is more than you are liable for, you can apply for refund.

You Must Disclose Foreign Assets And Income

The last thing you should do is hide foreign income, assets and bank accounts in your returns. You should mention your foreign bank account holding’s status, account opening date and the interest earned or accrued in the returns. Do not misreport facts on your I-T returns in relation to foreign income to avoid coming under tax department’s scrutiny.

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