10 things to keep in mind before filing ITR for FY 2018-19

Giving a sigh of relief to the taxpayers, the deadline for filing the income tax return (ITR) for the Assessment Year 2018-19 relating to the Financial Year 2018-19 has been extended by the Income Tax Department to August 31. The original due date was July 31, however, it was extended after the government had received several requests by many entities to extend the ITR filing date so as to allow assesses to file their returns.

Income tax e-filling

Here are the 10 most important things to keep in your mind before filing the ITR

  1. Not mandatory for every PAN card holder

It’s a general misconception that if you hold the PAN cards you need to file the ITR. But the fact is that only those individuals need to file the ITR whose gross total income is above the exemption limit. So, if you have a PAN card but your earnings are below the exemption limit, you are still allowed to file the return but it is not mandatory for you.

However, for the individuals who have income above the maximum exemption limit need to link the PAN to their bank account mandatorily. This is necessary so that the refund could be credited electronically only with effect from March 1, 2019.

  1. ITR Form Selection

The Central Board of Direct Taxes has issued seven ITR forms which are meant to report the specific income for a specified category of the individual taxpayers. In case you select the wrong ITR form, you will tend to fill the incomplete information in your ITR forms, which would lead you to receive a notice from the tax department for under-reporting of the income. So choose your form wisely!

  1. Keeping Documents Ready before filing your ITR

Before you file your ITR make sure you have all your necessary documents with you, making it easy for you. The documents for the salaried employees to file the ITR are Form 16 which is provided by the employer and PAN number. Some of the other documents which are important are

  1. Form 26AS

The form defines the Annual Statement and will contain the record of all the tax-related activities done by you through PAN.

  1. Bank statement

You need to submit your bank statement copy in order to show your income from interest on savings accounts and others. If you have any interest income statement from Fixed Deposits and Recurring Deposits you can also include that.

  1. TDS Certificate

In cases where the individual is not a salaried individual, they need to submit the Tax Deducted at Source (TDS) certificate given by a bank or any other institutions.

Other then these there are other documents too which an individual needs to submit in order to support the income earned during the specific year of filing an ITR. Keeping it ready will avoid last-minute worry.

  1. Your Residential Status

In India an individual is liable to pay tax depends on their current residential status, which is decided on the basis of an individual’s presence in the country. If an individual has stayed in India for more than 181 days during the relevant financial year and has exceeded 729 days stay during the preceding seven financial years, he/she is qualified to be “resident and ordinarily resident” (ROR) in India and will be taxable on his global income.

Whereas, if an individual has been qualified as a non-resident, he is subjected to pay tax only for the income which he has earned in India or any income received in India. The residential status is mandatory to be corrected for every financial year and should be selected accordingly in the tax return form.

  1. Different Categories of Taxpayers

There are three different categories of taxpayers in India as per there age and financial status.

  1. Individuals who are below the age of 60 years, including residents as well as non-residents
  2. Resident senior citizens who are 60 years and above but below 80 years of age
  3. Resident super senior citizens who are above 80 years of age.

    6. File Your ITR based on slab

 For the individuals having an annual income of Rs 2.5 lakh or more, it is mandatory to file income tax returns. For senior citizens or individuals between the ages of 60 years to 80, the limit is Rs 3 lakh, and for super senior citizens who are aged above 80 years, the limit is Rs 5 lakh, according to the Income Tax Department.

  1. Do check your previous year ITR

It is very important to keep a tab of your previous year’s tax return filed in the loop so as to ensure that if any losses claimed in the earlier year(s) has been properly disclosed in the current year of the tax return. It is important to do so as to see if there are any profit in the current year eligible for set-off, the same is taken into account for set-off against such previous year losses.

  1. Aadhaar

The current income tax law has made it mandatory for an individual to mention their Aadhaar number while filing their ITR. The individuals also have to link their PAN with Aadhaar number as per law.

If you don’t link your PAN with the Aadhaar, you won’t be able to file the ITR.

The CBDT in its notification on  March 31, 2019, said that “with effect from April 1, 2019, it is mandatory to quote your Aadhaar number while filing ITR as required under section 139AA(1)(ii) unless specifically exempted. The notification further specifies that tax return cannot be filed either electronically or manually without quoting Aadhaar number.”

  1. E-verification of ITR

 Once an individual files the ITR electronically, within 120 days it is mandatory to verify the tax return with the Aadhaar option. In case it is not available, then the signed ITR-V acknowledgment needs have to be couriered within the 120 days from the date of the filing. If none of the above is done within the period of 120 days, the ITR filed will be taken as invalid.

  1. Penalty

    As per the income tax law, if an individual fails to file an ITR on or before August 31, 2019, they are liable to pay the penalty of Rs 5,000 for filing a belated return by December 31, as per current tax laws.

However, if the ITR is filed between the period of January 1 and March 31, the individual will be slapped with the penalty of Rs.10,000.

The Banking & Finance Post is an initiative of Elets Technomedia Pvt Ltd, existing since 2003.
Now, Elets' YouTube channel, a treasure of premier innovation-oriented knowledge-conferences and awards, is also active. To Subscribe Free, Click Here.

Get a chance to meet the Who's who of the BFSI industry. Join Us for 3rd BFSI Cloud & Security Summit, Mumbai and explore business opportunities. Like us on Facebook, connect with us on LinkedIn and follow us on Twitter, Instagram & Pinterest.