In the accompanying video, Manoj Nagpal, Consulting Editor and Founder, Outlook Asia Capital, shares actionable insights on how to deal with your taxes when income tax return filing deadline comes closer.
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In the accompanying video, Manoj Nagpal, Consulting Editor and Founder, Outlook Asia Capital, shares actionable insights on how to deal with your taxes when income tax return filing deadline comes closer. However, you don't have to worry on that front at all if you simply file on time - do it yourself or let an expert take over.
Q: What are the possible consequences if one misses the year’s deadline for filing tax returns?
A: The last date for filing your tax returns is July 31. You need to remember the due date because if you file your returns after that date, you will be levied a penalty of Rs 5,000 and going forward may be up to Rs 10,000 also if it goes beyond December 2018. The other important thing to remember is that if you file your return after July 31, you will not be allowed to carry forward your losses also in future.
Q: What should one do when they file their ITR themselves?
A: The first-timers have various choices. The tax filers can either do it on their own or he can go to an online website to file taxes. However, one should take a help of a CA or tax filing portal to file their returns. There are various reasons for this and the most important reason is that the amount of information that the tax department asks every year changes. As you need to remember every year they have been asking for more and more details including this year where you need to give more information than that was required last year.
Secondly, to accurately calculate taxes most of the online calculators will give you a fair sense. But a CA would help you take advantage of all sections of Income Tax Act. So, ideally you should go to CA but if it’s a plain simple salary that you are looking at then even most of the web portals present online are more than sufficient.
Q: What are the documents required?
A: In India, the tax filing process is free of documents. So, you don't need to submit any documents to the tax department. It is only if there is a query that you need to keep it ready with you when they ask for it in future. However, you need to have your Form 16 (if you are salaried), bank statements, documents related to tax saving benefit claimed during a financial year and rents receipts if any. Also, keep proofs of every documentation which has some tax implications in it.
Q: Are the number of taxpayers filing returns growing?
A: Every year the number of taxpayers has been increasing dramatically. Last year almost 6.8 crore people filed tax returns. Now, if we compare it with three years back data, this number was less than 4 crore. This shows that every year almost 1 crore fresh tax filers are filing tax returns. A very important statistic to remember is that most of the PANs are in the age band of 20-30 years, so when we say India is really a young working population the numbers really signify that. Most of those in the age band of 20-30 are filing returns for the first time.
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