It is that time of the year again when individuals will start filing their income tax return with the income tax department. The last date of filing your returns for FY18-19 is July 31, 2019. By filing your returns on time, you are eligible for certain benefits such as carry forward losses and avoiding late filing fees, which is up to Rs 10,000.
You can electronically file your income tax return (ITR) by visiting the e-filing website of the income tax department. An individual first have to register themselves on the e-filing website. However, super senior citizens (i.e. aged 80 years and above) are allowed to file their ITR in paper format.
Collect required documents – TDS certificates (Form 16/16A)
Collect the required documents such as Form 16, salary slips and interest certificates that will be required to file the ITR. Tax deducted at source (TDS) certificates such as Form 16 is provided by your employer if tax is deducted from your salary income. Similarly, your bank will issue you a Form 16A for TDS deducted on interest paid to you on fixed deposit. The documents will help you calculate your gross taxable income and will provide the details of TDS from your income in FY18-19. Make sure all the TDS certificates received are in the TRACES format.
The TDS certificate has to be digitally signed. It will bear a checkmark if the signature is valid or a question mark if the signature is non-verified.
From this year, individuals also have to pay tax on long-term capital gains from equity shares and equity mutual funds if the gains exceed Rs 1 lakh. The tax to be paid is 10 percent without any indexation benefit. If you have redeemed any mutual fund units in the said financial year, you can ask the mutual fund to provide the transaction statement and capital gains for the same.
One must cross-check their TDS certificate with Form 26AS to make sure all the tax deducted in the said financial year from incomes such as salary, interests are deposited with the government against the PAN. One can log in to the e-filing website and click on ‘My Account’ tab to select ‘View Form 26AS.’ The website then redirects to TRACES website where the form can be viewed, as well as, downloaded.
Chartered accountants recommend keeping track of Form 26AS during the financial year to avoid discrepancies. If the numbers in the Form 16/16A and Form 26AS does not match, make sure you get it rectified by your deductor. The deductor can be the employer, bank or others. If the error is not rectified, then you will not be able to claim the credit on the tax which is deducted.
Calculate the total income
Once you have all the relevant documents, verify all the taxes that you are required to calculate the total income chargeable to tax. Total income can be added by adding incomes from five different heads and claiming all the deductions allowed under the IT Act and setting off losses. Individuals are also required to provide source-wise bi-furcation of the income under ‘Income From Other Sources.’
Post calculating your total income, one can check the tax liability by applying the tax slab that they belong to. The income tax slabs have remained unchanged for FY18-19 as compared to the previous year.
Final Tax Payable; if any
Once you are done computing the tax liability, you can deduct all the taxes that you have already paid in the year, through TDS, TCS and Advance Tax. Add interest, if any, payable under sections 234A, 234B and 234C.
This will ensure if you have paid all the taxes or any excess taxes were paid and a refund is due to you. The refund can be paid physically via cheque or online using challan ITNS 280. Income tax payments made after March 15 of FY18-19 is called self-assessment tax and should be reflected in the Form 26AS within 2-3 working days from the date of payment should also be cross-checked.