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ITR e-filing: How to prep for filing your income tax returns online

Here’s a guide to help you step up to the income tax e-filing process, budget time for filing returns, and the documentation you will require.

business Updated: Jul 03, 2018 14:30 IST
Alisha Sachdev
Alisha Sachdev
Hindustan Times, New Delhi
income tax return,income tax return filing,income tax return last date
(Photo: Shutterstock)

July is already here, and the month-end deadline for filing income tax returns is not too far away. Here’s a guide by Alok Agrawal, income tax expert and partner with Deloitte India to help you step up to the income tax e-filing process, budget time for filing returns, and the documentation you will require.

Start early and keep important information ready

Taxpayers with sources of income other than the salary they’re paid or the profit they make from business must budget one-two weeks to get relevant details for the following:

Income from housing loan/rental: Housing loan interest payments from banks or property tax payments to municipal authorities are sources of income which need to be accounted for while filing the ITR.

Capital gains: Details of sale consideration,purchase and other transactions in securities such as equity shares and mutual funds) to calculate any capital gains/losses and clarifications from any other parties, such as brokers, should also be kept ready.

Once the taxpayer has details of their income from all sources ready, it will take another day or so to complete the tax return form before it can be submitted online on the income tax portal.

With Form ITR-1 being applicable only for “Resident and Ordinarily Resident” (ROR) individuals, the more detailed Form ITR-2 would be required to be filed by individuals qualifying as Non Residents or “Resident but Not Ordinarily Residents”.

Further, the disclosure requirements in the tax return forms have been increasing every year. For example, individuals with annual taxable income of over Rs 50 lakh need to disclose details of their assets (including shares and mutual funds) and liabilities (including bank loans) in India in Form ITR-2.

Finally, individuals with foreign income and foreign assets should budget for adequate time to complete the detailed schedules in Form ITR-2 and for completing the Form 67 for any claim of foreign tax credit in respect of foreign tax payments. A requirement which is often overlooked is for ROR taxpayers with foreign assets to file a tax return even if they have no taxable income at all.

Since the return requires comprehensive detail, the return filing process should not be pushed close to the deadline to avoid any last minute issues which might cause a delay

Will you need consultation from a tax expert?

While the Income tax authorities have attempted to make the e-filing process smooth and user friendly, the tax calculations can be complex in certain situations, as there are different tax exemptions and methods of calculation depending upon the nature of income one declares. For example, in income from capital gains, an exemption can be claimed if the taxpayer has sold a residential property and re-invested in another. Such exemptions may have a significant tax impact and the tax situation can get very complicated if the claim is not made correctly in the original tax return. Hence, individuals should consider their overall tax situation and decide on whether to use a tax consultant at the outset. Once the tax calculations are finalised and any tax/interest payable is determined, then the tax filing process is relatively simple.

Documentation to keep at hand

Apart from supporting documents with respect to income earned during the year, like bank statements, which the taxpayer would need to refer to, the other critical documents that taxpayers should keep handy are –

- Form 16 issued by the employer and other TDS certificates (for example, Form 16A issued by banks)

- Annual tax statement (Form 26AS) available on the income tax portal

- Challans evidencing payment of any advance tax and self-assessment tax

Further, once the tax return form is submitted online, the e-verification process can be completed using the Aadhaar.

First Published: Jul 03, 2018 14:27 IST