What more you need to know about your income tax returns…

There is enough literature on how to file your income tax returns online. Hence, we will not focus overtly on that point. Currently, assesses with income exceeding Rs.5 lakh per annum need to necessarily file their tax returns online. If your income is below Rs.5 lakh per annum, you can choose to file your returns either online or physically. However, in the light of the advantages of filing returns online, it is advised that even those with incomes less than the threshold should necessarily file their RR.

The merits of online filing of income tax returns…

To begin with, online filing of your returns is amazingly simple. You just need to download the software from the Income Tax website and the entire return filing process is menu driven and can be completed in less than 3 hours. In case you have capital gains or losses your broker can furnish a capital gains statement, which you can use to file your returns. Remember, filing your return is a must if you want to claim carry forward of capital losses. There is one more advantage. Till the last year, a person had to either digitally sign the return or physically sign the return acknowledgement and mail it to the CPC in Bengaluru. This year even that physical mailing has been done away with if you link your Aadhar Card details to your income tax return. More importantly, the entire task of reviewing returns and processing refunds is much faster if you file returns online. Of course, one needs to ensure that while filing returns, the MICR and IFSC number of your bank account along with the account number is mentioned accurately.

Maintaining copies of your return filings…

It is always essential to maintain copies of your Form 16, ITR receipts and returns filed for a period of last 10 years, wherever applicable. While you can maintain physical copies for easy reference, the Income Tax website also maintains your soft copies of returns with acknowledgements and receipts for all returns that are filed online. These are downloadable in PDF format and hence you can also store copies separately in your e-locker that the Indian government provides to you.

Income tax returns as an important income document…

This is perhaps the most important document that you have giving an estimate of your annual income and approximate net worth. These documents are essential in a variety of circumstances. For applying for a home loan or even a personal loan, such documents are called for over the last 3 year period. Similarly, if you are applying for a visa to go abroad, especially to Europe, then your Income Tax return documents for the past 3 years is an absolutely must. Also applications made to regulators like SEBI, IRDA and other government departments require you to present your audited net worth certificate. If you are applying for a high value insurance policy, your income tax returns for a period of 3 years are called for. Thus, your income tax return constitutes an important document.

 Rectifications and disputes relating to returns…

There are a variety of anomalies that may arise in your returns. Here are a few samples. Your assets may not match your known source of income. Your tax deducted as per the IT records may not match with your returns. Your capital gains / losses may not match with the dump that the IT department gets from your brokers based on your PAN. There may be technical errors in your calculation. Typically, your refunds get withheld if the income tax department finds any anomaly.

Individuals need to ensure some basic rules are followed in such cases. Most rectifications can be done online and returns can be filed again within one year. At times you may be summoned to meet the Income Tax Officer if there are any questions they have. It is your job to ensure that you are present at the date and time mentioned in the summon letter with all requisite supporting documents like bank statements, investment statement, TDS slips etc… For any other issues, you can also contact the assessing officer (AO) of your circle (specific details are found on the IT website).

In a nutshell, the process of filing and maintaining your income tax returns have been substantially simplified. It is up to you to make the best of these resources provided by the government. Of course, do not ever forget to file your returns, well before the stipulated due date.

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