The Income Tax Department of India has announced the last dates to file Income Tax Return (ITR) for financial year 2019-2020. After several extensions, the date for individuals, Hindu Undivided Family, Body of Individuals and Association of Persons has been finalised on 30th November. Businesses requiring Audit & Transfer Pricing report need to carry out their tax return filing by 31st October.
If you are filing your tax return online for the first time, then your chance of getting confused is pretty high. Today, we are going to walk you through some income tax return filing tips, which can be of great assistance while you file your returns without making any mistakes. So, keep them in mind while filing your income tax return form in a confident manner.
- Choosing The Right Form
There are seven different kinds of forms available for you to choose from. You have to understand which one is applicable to you and choose the right one accordingly. Some of these are meant for specific companies and trusts, while others might apply to specific individuals or Hindu Undivided Families (HUF). Most importantly, the Central Board of Direct Taxes (CBDT) has issued new forms for the assessment year 2020. Some of the earlier forms have been replaced as well making it even more crucial to choose the correct one.
- Missing Deadlines
If you miss the specified deadline, then you will have to pay a late fee based on your income. However, you shall always have the option of filing a belated return. Even though it is not the most desirable thing to do, a belated e tax filing for the financial year 2019 can be carried out within 31st March 2021.
- TDS And Rent Paid
If you are a tenant paying rent that is over 50,000 INR a month, you will have to deduct 5% in the form of TDS. Even though you will not be able to show it as your own tax liability while e tax filing, this has been made mandatory by the central authorities. You also need to keep in mind that your landlord will receive the credit for TDS paid
- Income Tax Return
You may be working as a salaried employee in a company that deducts a certain amount in the form of TDS every month. Even if Form 16 is issued, it does not relieve you of your responsibilities to pay your taxes. You have to find out if you are applicable for income tax e-filing and accordingly choose the relevant form to file your returns with the Income Tax Department of India.
- Interest Income And ITR
If you have a bank account (savings), then interest earned more than 10,000 INR on the same shall be taxed. Even if it is less than that amount, you will have to provide this information while filing your ITR. However, senior citizens can claim exception in interest income up to 50,000 INR on their bank deposits.
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- Unpaid ITR Dues
If you have failed to pay your taxes for the last few years, then you can file a belated return only for FY 2018-19. Tax returns for Financial Years 2016-17 and 2017-18 cannot be filed any further.
- Income Tax Return Tips for Consultancy Professionals
If you happen to be a doctor, architect, engineer, etc., and your source of income is through professional consultation, then you can opt for a presumptive taxation scheme. Tax consultants in Mumbai, India advocate the selection of either ITR-3 or ITR-4 form, in such a case. However, if your income is less than 50 lakhs INR (through indirect consultation) then you need to proceed with ITR-1 form. If Consultation is not your only source of income and it exceeds 50 lakhs INR, you may have to choose ITR-2 form.
- Basic Information Requirements
While filing your Income Tax Returns, you will need to provide information regarding a few basic things such as PAN Card details, your Address, Bank Account number, mobile number and email ID. The process of online tax filing will be faster if you have these documents ready and with you, before beginning with the procedure.
- Income Tax Rates
The income tax rates differ based on your income bracket. If your income is up to 2,50,000 INR then tax rate will be 0%. If it falls between 2.5 lakh and 5 lakh INR, the tax rate will be 10% of the amount exceeding 2.5 lakh INR. The tax rate will keep on increasing after this. For example, if your revenue falls under the taxable bracket between 5-10 lakh INR, the tax rate will be 20% of the amount exceeding 5 lakh. Similarly, for income above 10 lakh, the tax rate becomes 30% of the amount exceeding 10 lakh. This however does not apply to you if you are a senior citizen.
- Income Tax Rates For Senior Citizen
If you are a senior citizen falling under the prescribed age bracket (60-79 years) you will receive a basic tax exemption up to 3 lakh INR. For individuals, above 80 years of age, the basic tax exemption amount is 5 lakh INR.
Income tax e-filing can prove to be a strenuous procedure because off frequent alterations in the forms. With more columns and tables being added for ensuring better presentation of information regarding the sources of income it becomes all the more necessary to understand these Income Tax Return filing tips in details. Alternatively, you can also seek out the assistance of tax advisory firms if you are not feeling very confident about getting it done by yourself.