Tax filing is a tedious process, but if you prepare beforehand, it can be a simple process. For a successful and an error-free filing, it is important you keep yourself updated about the changes in rules and income tax return (ITR) form.
- First and foremost, it is wise to start the tax filing process as soon as possible to meet the July 31 deadline. You should be aware from this financial year if you file income tax returns after the due date of July 31, you will have to pay a penalty of Rs. 5,000. In case you fail to do this after December 31, you will have to pay an even higher penalty of Rs. 10,000. However, if your income is less than Rs. 5 lakh, a fine of Rs. 1,000 will be levied.
- The applicable tax rates have also changed from this assessment year 2018-19. For an individual drawing income between Rs. 2.5 lakh to Rs. 5 lakh, the tax slab rate has been reduced from 10% to 5%. While the tax slab for income between Rs. 5 lakh and Rs. 10 lakh, and above Rs. 10 lakh, remains same at 20% and 30%.
- From this assessment year, the government has limited the benefit of set-off loss from house property to a maximum of Rs. 2 lakh per financial year. It has made the balance loss to be carry forward to the next eight years. Till the last financial year, the tax break was allowed to be availed on the entire interest paid (taken as loss) on home loan for all let-out properties.
- The base year being 1980 for calculating capital gains for immovable property has been changed to year 2001.
- Seven new ITR forms have been notified for this assessment year. For a salaried individual, pensioners and self-employed professionals, the relevant tax forms are ITR 1, ITR 2, ITR 2A, Form 3, Form 4 and Form 4A. The salaried individual is also required to give the salary breakup, including allowances etc.