The countdown has begun for filing your income tax return (ITR). It was easier in the previous financial years, when you just handed your Form 16 over to your chartered accountant to file the income tax return on your behalf. The chartered accountant would take care of your paperwork, Form 16, accuracy of the return and hand over the ITR receipt on the completion of the process.
But starting this year, you are required to file tax returns online especially if you are earning an annual salary of Rs 10 lakh or above. The tax portals are very user friendly and decode most of the technical details for the tax payers. However, the onus lies on you to enter every financial detail appropriately and file an accurate tax return.
Generally, due to the inbuilt mechanisms, returns filed electronically would have all the information mandatorily required to be filled in. These would include residential status, gender, TAN of the employer etc.
The ITR would be considered inaccurate if certain details mentioned in the return are wrong or certain details are missing altogether. "The inaccuracies can have financial implications for the tax payer as a particular deduction, tax credit or loss may not be considered by the tax department; and this will enhance the tax liability of the tax payer. At times, there could be penal consequences too," says Vaibhav Sankla, director H&R Block, India. Common Misses
The most common detail which tax payers forget to mention in their income tax return is the interest income from bank FDs. "Sometimes it could be due to lack of awareness or the delay in the TDS certificate to be given by the banks. Generally, banks give the TDS certificate in February or March every year," says Saakar S Yadav, managing director, myITreturn.com, a tax portal. "Tax payers fill the ITR details as mentioned in the Form 16 and leave out such details which are usually not mentioned in it," he adds.
"Tax payers should refer to tax credit statement in Form 26AS to ensure that their income, TDS and tax payment details are completely reflected in the tax return form," says Vaibhav Sankla.
The second missing element could be claiming deductions/exemptions which the tax payer is entitled to, but are not reflected in the Form 16. "Often employees invest in tax saving instruments after submitting their investment declaration to the employer. In such cases the Form 16 will not have complete details of such investments," says Saakar S Yadav.
Most individuals avail deduction of interest on repayment of home loan. "However, not many are aware that any interest paid on home loan for reconstruction, renewal and repair of the house property is allowed as deduction up to a maximum of Rs 30,000, subject to the overall limit of Rs 1,50,000," says Vineet Agarwal, director, KPMG. Hence before filing the return you should look at every investment and loan and understand the tax treatment for them. Must Mentions For Salaried Class
"You have to mention details of your rental income, capital gains or income from other sources (such as bank interest, etc) earned during the corresponding financial year. Moreover, if you qualify as resident and ordinarily resident in India and have overseas assets, the details of the same should be mentioned in appropriate columns in the income tax return," says Sonu Iyer, tax partner & national leader, human capital mobility services, Ernst & Young.