3 Things Every Salaried Individual Should Know About Income Tax Returns

income-tax-returns

Introduction

Even if 31st March seems weeks away, every promotional medium (such as radio, TV, social media and print) showcases jingles to educate and remind us of our income tax obligations. For salaried individuals, who have done it before, filing of Income Tax Return (or ITR) is not a new thing. For first time filers, it is definitely a big deal. Things seem confusing at first, even things like which ITR form to use? which are the documents needed? is it better to file an ITR online? and many more. Being a digital lending platform, Loan Singh only provides personal loans to salaried individuals. A salaried individual also pays taxes, and files an ITR. Through this peace, we try to address 3 things related to tax return filing – what it means? who can file for returns? and how can you file an ITR?

 

What is Income Tax Return?

Income Tax Return is the filing of your information about your income and tax paid, within a financial year. You need to provide this information to the Income Tax Department. There are different forms that are applicable to various categories of taxpayers. The different forms are

  • ITR 1
  • ITR 2
  • ITR 3
  • ITR 4
  • ITR 5
  • ITR 6
  • ITR 7

When you file a belated return, you are not allowed to carry forward certain losses. The Income Tax Act of 1961 obligates citizens of India to file their returns to the Income Tax Department at the end of every financial year. These returns should be filed before the specified due-date. It is important to know which form is appropriate for you because only the form you fill will be processed by the Income Tax Department. The form depends upon the criteria of the source of your income and the salary bracket you fall into.

The due-date for filing your tax returns is 31st March, each year. Most of the years, this date has been extended. This year the last date to file your tax returns was 5th August 2017. Many of you must have already started to prepare for the next financial year. So this article will help those who have already started to pay their taxes from April of 2017. You can make use of the information available on this article when preparing to file your tax returns in April 2018.

 

Filing of Income Tax Returns

Individuals who fulfill any one of the following conditions should, by law, file their Income Tax Returns during a financial year.

  • Having paid income tax during a financial year
  • Having availed some form of credit
  • Having paid for a foreign travel – either for self or for another individual
  • Occupies a particular floor area of an immovable piece of property
  • Is the owner of a vehicle
  • Is a member of a club where the annual membership fee is Rs.25,000 and above

 

Income Tax Return 1 or ITR 1

ITR-1 SAHAJ is one of the tax return forms, essential for citizens of India, to file their income tax returns to the Income Tax Department. This is applicable to you – a salaried individual.

You are eligible to file your returns using ITR1-1 if

  • You are salaried or you happen to draw pension
  • You own a house property (except in case of losses brought forward from preceding years)

In case of clubbed Income Tax Returns, where a spouse or a minor is included, this can be done only if their income is limited to the above specifications, as well.

You are not eligible for ITR-1 SAHAJ, if you have earned an income of more than Rs.50 lakhs or if earned an income through one the of the following means

  • More than one house property
  • A lottery or legally gambled or income from racecourses
  • Taxable capital gains
  • Income from a business or a profession
  • Agricultural income exceeding Rs.5000
  • An Indian resident with assets outside India or signing authority in any account outside India
  • Claiming relief for foreign tax paid or double taxation relief under section 90/90A/91

 

How to File Your Income Tax Returns?

Every salaried professional has to pay his/her income tax returns. Aadhaar Number and PAN Details are mandatory. If it’s your first time, then the following documents need to be at your table when attempting to file your income tax returns

  • Permanent Account Number (PAN) Card
  • Aadhaar Number
  • Form 16 from your employer
  • Form 26AS (Tax Credit Statement which houses the details regarding TDS )
  • Details about your assets – if income exceeds Rs.50 lakh per annum
  • Copies of bank statement
  • Proof of investments

 

Filing Your Returns through the IT Website

The most common and effective way to file your tax returns is via an electronic medium. This can be done using 2 modes. Firstly, if a digital signature is obtained, the form can be uploaded online. Secondly, you can download the pre-filed form, print it, sign it and send a copy of the acknowledgement, via postal services, to the Income Tax Department’s office.

After you have filed your returns online, the next step is to verify it. The income tax department will start processing your return only once it is verified. Refunds, if any, are processed for returns which are verified. You can verify your ITR (ITR-V) via netbanking. If you use netbanking for ITR-V, you don’t need to send the physical ITR-V to the income tax department. Other than net banking, you can use your Aadhaar OTP or via EVC (Electronic Verification Code) on the income tax department website.

 

Tax Return Preparer

TRPs, or Tax Return Preparers, are appointed representatives of the Income Tax Department. They are well trained and can be located via their website.

They are paid for each return they file based on the amount of tax paid. The higher the tax paid, the lower is the TRP’s fee. TRPs are identified by a number, name and counter signature.

 

E-Filing Website

If it’s your first time, as a tax payer, the online process being simple – can be stressful, as well.

You have the option of help from authorized e-return intermediaries like Cleartax, Quicko and Makemyreturns. You can e-file your returns on any one of these sites at charges varying from Rs.300 to Rs.1,000 – depending on the complexity and number of income sources. Some of the e-Filing portals have also introduced apps, such as Taxplanner or Hellotax, which allow refund status checks and tax calculations.

 

Via An Offline Mode (hiring a CA)

When ITRs are complex with multiple income sources, deductions, tax audits, etc., a CA may be an expensive and time consuming option. The charges for a CA vary based on income source, complexity of returns and the CA’s experience. Some CAs may also offer telephonic assistance.

 

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