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5 things to know when filing tax

returns online
By Chandralekha Mukerji , ET Bureau | 20 Jun, 2016, 10.27AM IST

The tax­return filing deadline is five weeks away

and it is time you sat down with the required
documents, calculated your liabilities or sent a
refund receipt. If you are a salaried employee,
Form 16 is the first document to get hold of and
most of you should have received it already. If
not, start hounding your HR department
immediately.
tax filing
0
Comments
Going by current rules and limits, most will be in
the online tax­filing category. If your income is more than Rs 5 lakh, e­filing is
manadatory. Plus, if you want to claim a refund or your interest earning from
savings bank account tops Rs 10,000, e­filing is mandatory. You can file using
the tax department's site while there are a few online platforms with better
interfaces.

Whichever option you use, here are five things to take care of when filing your
tax returns online.

1. Reading your Form 16

While on the government site you have to file the numbers yourself, some
websites such as ClearTax.com lets you upload your Form 16 on the platform
and directly picks up the correct figures from the form. However, you should
cross­check the figures and ensure they are correct, especially if you had
switched jobs and have more than one Form 16 to refer to.You would have to
recalculate your tax liability accordingly.

A common mistake is confusion between the 'net taxable income' and 'gross
taxable income'. While tax is calculated on your 'net taxable income' you have
to report the 'gross taxable income' ­­ income before deductions in your ITR
form. If you are filing ITR 1, you can simply pick the figure under the head
"income chargeable under the head salary. However, if your are filing ITR 2 or
2A, you will have to provide a break­up of your income. "Salary is typically
reflected at item 1(a) in Form 16, allowances exempt under Section 10 are item
2, value of perquisites is item 1(b) and profits in lieu of salary are shown under
1(c)," says Vaibhav Sankla, director, H&R Block India. Allowances that are not
tax exempt are either shown under item 1(d) or, if already included in your
salary figure and not reflected separately, will be reflected in an annexure that
was issued with the Form 16.

"Taxpayers many time makes mistake in reporting this break­up correctly

especially they get confused between the exempt and nonexempt allowance, "
says Sankla. Next, ensure that no deductions have been missed. Check
whether the PF and HRA deductions have been chosen correctly. If you had
changed job or forgot to submit proof of investments to your employer, you will
have to manually enter data for these deductions. Your Form 16 also has the
correct employer name, address and TAN. Make sure you pick this information
from here as bigger companies may have multiple registered offices. In the
case of online businesses, the registered company name often differs from the
case of online businesses, the registered company name often differs from the
more popular domain name.

2. Which form to fill

If you using the online platforms, this is an automated process. "The correct ITR
form gets selected automatically on the basis of the information provided by the
taxpayer," says Archit Gupta, CEO, ClearTax.com. However, if you are using
the government site, you need to know which form is for you. Each form has it's
limitations. For one, you may have income from salary only but you can't file
ITR 1 if you own more than one house or have gained from trading in shares. If
you own more than one house and do not have capital gains or foreign income
or assets, you can file ITR 2A. Similarly, ITR 4S is a much simpler form to fill
compared to the bulky 20­page­long ITR 4, if you have income from a business
or are a freelancer. If you choose ITR 4S, there is no need to maintain books,
profit &loss statements or audits. You don't have to pay advance tax either.
However, your business's gross receipts or turnover of the business should not
be more than Rs 1 crore and it should not be registered as a company. Your tax
liability would be calculated on the basis of a 'presumed business income',
irrespective of what your actual income may be. Section 44AD of the Income­
Tax Act says under the presumptive method, the net income is estimated to be
8% of gross receipts for businesses. This year onwards, even freelancers
earning less than Rs 50 lakh per annum can also file ITR 4S. "A new section
has been inserted in the I­T Act Section 44ADA under which professionals with
receipts of Rs 50 lakh or less could opt for the presumptive scheme. Their
income shall be assumed to be 50% of their receipts," says Gupta. So, if you
have profits less than the presumptive rate, you may still want to file the
lengthier Form 4.

3. TDS and Form 26AS

You need to cross­check your TDS deductions with the figures reflected in
Form 26AS, especially if you have interest income from bank deposits or any
other sources. Form 26AS also records interest income in cases where Form
15 G/H is submitted by the taxpayer. So, in case you have erroneously submit
these forms where there was a tax liability, you should make corrections. "The
taxpayer should add this interest income to the list of 'income from other
sources' and compute the tax liability calculated as per tax slab rate," says
Sankla. Form 26AS can be downloaded from the TRACES site. The tax
department's e­filing site also provides a link. However, be careful while
selecting the Assesment Year (AY). "Taxpayers get confused between
Assessment Year (AY) and Financial Year (FY) and they end up filling up
wrong year's data in the return form. This may result in a huge tax demand due
to tax credit mismatch," warns Sankla. AY is the year in which you file returns.
For instance, income earned between April 1, 2015 and March 31, 2016, will be
taxed in AY 2016­17.

4. Declaring 'Income from Other Sources' , capital gains

Once you have figured out Form 16, it is merely copying figures from it on the
ITR Form. But if you have income from other sources you need to be careful.
Lately, the sleuths have become vigilant and you may end up with a notice.
Income from other sources is a residuary head of income: income not
chargeable under any other head is chargeable under this head. All income
other than income from salary, house property, business and profession or
capital gains is covered under 'income from other sources'. Typical incomes
under this head include interest on bank or other deposits, taxable dividends,
income from securities by way of interest, pension received by the legal heirs of
an employee, income from subletting, winnings from lotteries, races and
gambling.

Do not miss out reporting income from a second house. Even if it is not rented
out, you have to pay a tax on the basis on 'deemed income'. Good thing is that
if you have incurred any specific expenses for earning any of the above income
then you can claim deduction for the same too. Capital gains or losses is
 then you can claim deduction for the same too. Capital gains or losses is
another section where taxpayers tend to make mistakes. Capital gains/losses
have to be reported in Schedule CG of form ITR 2.

5. How to e­verify
You may have filed your returns on time but the tax­filing process is incomplete
if ITR­V doesn't reach the department within the stipulated time. You won't get
your refunds and worse, your returns filing won't be considered valid if the
department doesn't receive a signed or verified copy of ITR V within 120 days
of filing the returns. Apart from mailing the ITR V to the CPC in Bengaluru, you
can now e­verify by linking your Aadhaar or through netbanking. For Aadhaar­
linked verification, you have to be registered on e­filing site and provide your
Aadhaar number. Once the validation is done, you will receive an OTP (which
will be your electronic verification code) on your Aadhaar registered mobile
number, which will be valid for the next 10 minutes. Submit this to e­verify your
ITR V. In case your PAN and Aadhaar details don't match or you are still not
registered under UIDAI, verify using your netbanking account.

READ MORE : Section 44AD | ITR 1 | ITR | form 16 |

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