Have you filed your Income - Tax Yet?

Part 1 of 2 part series

This is the last month to file your income tax returns for the financial year 2017-2018. Therefore we decided to write about a step by step guide and also highlight the pitfalls of not filling on time. Moreover, we will try to cover the few important changes in the last few years.

It’s quite common if you are still wondering, whether you should file income tax or in complex terminology(Section 80C, 80TTA).

Let’s try to address the elephant in the house

Am I Required to File Income Tax Returns?

Should File Returns if I Earned Less Than Taxable Income i.e. Less than 2.5 Lakh in this financial year.

Yes, it is advisable to e-file your income tax returns even if you don’t pay taxes. A zero-return filing will be helpful when you need to get your tax refund or apply for a loan or visa.

Let me explain it bit more: The most important benefit of paying taxes and filing your income tax return is that only the income disclosed by you in your income tax return is considered your true income. If you are required to show your income at any place in future, only the amount disclosed in your income tax return would be considered as a valid proof of your income.

Moreover, even if you apply for any Loan from a Bank, you are mandatorily required to show them your income tax return and only the income disclosed in this income tax return would be considered as a valid source of income.

Note : This link by clearTax addresses a lot of such common queries. Do read!

Also, let’s talk about the pitfalls of not filing the income tax:

Penalty Payments: While you can still file the taxes after the due date i.e 31st July 2018 however you would be required to pay a penalty of Rs 5000/- (Rs 1000/- whereas the income is below 5 lakh) if you file it till 31st Dec 2018. Whereas belated return filed between 1st January and 31 March of the AY year (2018-2019) will attract a penalty of 10000/-

Interest Payment: You are also supposed to pay interest on due taxes each month until you file taxes.

No interest on refund: If any tax refund is due to you and you file the return in time, you can earn interest on refund claim, that is, the excess tax paid on your income during the year. However, in case of belated returns, you may lose the interest that would be due to the refund amount.

No Provision to revise returns: Filing a revised return is allowed only when original return has been filed within the due date.

Now, Once you have decided to file income tax and I hope in the stipulated time. What next ?

You can directly file on incometaxindiaefiling.gov.in if you are comfortable with taxation terminologies and various sections.

If not, there are various third party sites that simplify the process of efiling, breaking down terminologies into easy to understand descriptions. E.g. http://cleartax.in. If you still face hassles then you can contact us at prashant@niveshgyaan.in to help you file your taxes.

Other advantage with these portals is that for each subsequent year, you are not required to fill the same basic details (like address, aadhaar, bank accounts etc) again. Thus, making subsequent e filling a matter of few clicks.

Use this link to create account on clearTax : https://cleartax.in/r/1v2wgrsp

• If you have received Form 16 from your employer, follow the instructions here,. You can upload multiple Form 16 (your employer, bank etc)

• If the employer doesn’t provide Form 16, refer to the instructions here

Once the return is e-filed, the next important step is to verify it, either by physical post or more recommended e-verification. Its very easy, just follow the steps in this link

Note: From this financial year, the government has made the linking with aadhar Card mandatory; therefore, you do need to possess a aadhar card and keep your aadhar card number handy while filing your returns.

Important things to remember :

• Don’t forget to get Form 16 from your bank, Banks deduct TDS if the FD interest income exceeds 10,000. If it does not, it is your responsibility to mention the same.

• Get details of saving bank interest from your bank statement. Generally saving interest is credited at the end of each quarter. Interest up to 10,000 is exempt under section 80TTA

• Do mention all your bank account details.

• Don’t forget to claim LTA is that forms part of your salary. Note that only 2 journeys can be claimed in a block of 4 years. We are currently on the 1st Jan 2014- 31 Dec 2017 block.

• Do it before the deadline to avoid any penalties.

Disclaimer: A lot of content for this article has been taken from ClearTax.in. We are in no way associated with them.There might be several other options which you are free to explore.

You can also drop us a mail or call us if you need help in filing your taxes.