Make sure you pay your taxes; otherwise you can get in a lot of trouble.– Richard M. Nixon
Well no one could have said it any better. Not paying taxes correctly and making mistakes in doing the right calculation may cost you bad in future. So, it’s important to be completely aware of the basics of income tax. Deadlines of filing income tax returns, knowing the income tax slab, sharing the right information and many more important things like these are crucial and missing such details can result in scrutiny and adverse action by the I-T department. Our purpose here is to not just warn you but help you with the nitty-gritty of tax matters, so that your journey as a tax payer remain smooth and hassle-free.
Your bank or banks’ interest income counts!
This is a common mistake that most taxpayers do while filing their Income Tax Return (ITR) – They forget to include interest earned from savings bank account, fixed deposits or interest earned from
loans given to acquaintances. Now if you think all this is tax-free, you are so wrong. Interest up to Rs10,000 earned from the savings account is allowed as a deduction under Section 80 (TTA), but you
need to mention such income in the ITR. Also tax-saving fixed deposits although help save tax under Section 80C, the interest earned from them is fully taxable. So, don’t forget to include such income while filing ITR.
Also, it’s mandatory to report all your bank accounts (you can skip the dormant account which is not operational for 3 years) in the ITR. While mentioning the bank detail, you should provide the account
number, IFSC code, name of the bank and account type (current or saving) in the ITR.
Never ignore TDS claims
Now, it’s a known fact that any tax deducted on salary appears on Form 16 provided by the employer. However, for tax deducted on all other incomes, a person needs to check out his Form 26AS online. Besides TDS, 26AS also reflects the payment of advance tax made. If you notice a mismatch or a difference, you should immediately notify your employer before filing return and get it rectified.
Never hide your assets
Taxpayers earning above Rs 50 lakh are required to disclose the details of the financial assets (including movable and immovable assets) which they own as on date. It could be in India or foreign lands (although you live in India, you may earn income from investment abroad). This is the duty of such taxpayer. If you miss any material information especially related to foreign belongings or transactions, which needs to be part of ITR, then you can be penalised for such mistake.
Original documents, not required
There is no need to submit any document in original to the I-T department during the process of filing income tax returns. They are also not required to be given to your CA (you can always deny, if
asked for originals), if you are taking any such assistance. Just keep the copies of the documents ready in your file as the IT department may ask you to furnish the same at a later stage. And that’s
Previous employer’s information is very crucial
Now once you move from one company to another, you may forget to collate and pass on information from your previous employer to your new employer. And it may so happen that your new employer also doesn’t take into account the income earned from your previous job. Tax is then deducted on the assumption that income for the remaining months is the only income for the year.
But problem arises when you go ahead and file your tax returns at the year-end. At that time, the incomes from the two employers are added and the deduction and exemption are halved and tax
liability arises. So to avoid that make sure to pass on exact information from the previous company to the current one!
ITR filed. Now verify it.
One of the most crucial things that you cannot miss. Your work doesn’t get over once you file your income tax return. You need to verify your ITR. You have two simple options to achieve the same.
Either do it manually (sending ITR-V to CPC Bangalore) or electronically (E-Verification) through net
banking, Aadhaar OTP etc. Missed date is actually not a miss!
If you have missed the I-T return filing deadline of July 31, you can always file a belated return within a year. For instance, belated return for the financial year 2017-18 can be filed by March 31, 2019. You must ensure that you do not miss this crucial deadline.
For any assistance or an appointment with financial expert, feel free to get in touch with our team on firstname.lastname@example.org