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7 necessary steps to follow while filing your Income Tax Return

Don’t forget to verify ITR after E-Filing through ITR-V. ITR-V is the Income Tax Return – ‘Verification’ Form.

July 23, 2018 / 10:52 AM IST

The due date for filing ITR for FY 2017-18 (AY 2018-19) is July 31, 2018. You don’t have much time left and you need to go through these points to ensure a hassle-free tax filing.

“There’s another reason why you need to file ITR before July 31, 2018. As per the new tax law, there’s a penalty of Rs 5,000 if the return is filed after July 31st but before December 31st 2018. After December 31st 2018 the penalty is Rs 10,000,” said C.S.Sudheer, CEO and Founder of

-- 1 --When to file ITR?

When your income from all sources is above the minimum tax exemption limit, you have to file ITR. The tax exemption limit is Rs 2.5 Lakhs a year for a citizen below 60 years. It’s Rs 3 Lakhs for a citizen between 60-80 years and Rs 5 Lakhs for a citizen above 80 years.

Keep your PAN handy before filing ITR. Get an Aadhaar if you don’t have one as quoting Aadhaar is compulsory when filing ITR.


Income can be categorized under five heads:

## Income from salary.
## Income from house property
## Income from capital gains
## Income from business and profession

## Income from other sources

--2-- Keep Documents Handy

Keep your Form 16 Ready: Form 16 is the certificate issued by your employer which gives details of the salary paid to you and TDS deducted on this salary and deposited on your behalf with the tax authorities.

“If your employer has deducted TDS he has to furnish the Form 16. You need the Form 16 when filing ITR. You can still file ITR without Form 16, but it’s great if you have it,” said Sudheer.

Check and Verify Form 26AS: You can assess the Form 26AS which is an annual consolidated tax statement, from the Income Tax Website by using PAN (Permanent Account Number). Form 26AS contains details of various taxes deducted from your income by deductors. The deductors could be your employer who deducts TDS and pays it on your behalf to the Government or a bank which deducts TDS on FD Interest Income.

The TDS details in the Form 26AS must match with the details of the tax paid as shown in Form 16. If there is a mismatch contact your employer and tax authorities to resolve the discrepancy. You can download Form 26AS from the TRACES website.

Keep bank account details handy: Keep details of bank account numbers and the IFSC codes when filing ITR. Having a bank account statement is good as you can easily declare interest income from SB accounts.

Keep documentation of tax saving investments and expense: Keeps your tax saving investment and expenses documents ready to ensure accuracy in the filing. This makes sure you don’t miss any information that might help save tax in the form of lower tax payouts or higher tax refunds.

Some common Tax saving proofs:

## EPF, NPS, ELSS, PPF, NSC, SCSS and other tax saving investments.
## Premium receipts on life and health insurance plans.
## Receipts of tuition fees paid for up to 2 children.
## Documents showing principal and interest paid on the home loan.
## Rent receipts and medical bills on self or dependents

## Donation receipts

--3-- Calculate Taxes

Compute Short Term Gains: If you are trading in shares or mutual funds, you must have made profits called short-term capital gains. The profits/gains got by selling shares/mutual funds within a year are called short-term capital gains. In case of debt funds, short-term capital gains are within 3 years or less.

“Short term capital gains are not subject to TDS and you have to calculate taxes yourself. You can download the capital gains statements from individual mutual fund houses and add them up to calculate short term capital gains,” said  Sudheer.

No long-term capital gains on equity: For the FY 2017-18 (AY 2018-19) there’s no tax on LTCG for equity-oriented funds if you have held them for a year or more. “The new rules regarding LTCG for equity schemes announced in Budget 2018 are applicable from AY 2019-20,” said Sudhir.

Standard Deductions is not applicable: The new standard deduction of Rs 40,000 a year on salary income is not applicable for FY 2017-18 (AY 2018-19). You can claim deductions on the transport allowance at Rs 19,200 a year and the medical reimbursement at Rs 15,000 a year.

Make sure you get all the calculations right. The wrong numbers could mean the wrong taxes and a lot of problems.

--4-- Choose the correct ITR Form

You have to choose ITR-1 (Sahaj) if you have income from salary/pension, Income from one house property, income from other sources other than winnings from lottery/horse racing. You can file ITR-1 only if income is less than Rs 50 Lakhs a year. If you satisfy all the previous conditions but have an income of more than Rs 50 Lakhs a year, file ITR-2. This is also used for income from capital gains, foreign income or agricultural income more than Rs 5000 or if income from a spouse/child is clubbed with your income.

If you have income from business or profession file ITR-3. If you have income from a business or profession and opted for the presumptive income scheme then file ITR-4 (Sugam).

--5-- Make use of Tax Deductions under Chapter V1-A

If you have invested in certain tax saving investments like PPF, NSC, SCSS, ELSS, your contribution to EPF, premiums paid on life insurance plans, tuition fees up to 2 children, repayments on the principal portion on home loan EMIs and some other tax saving investments, you are eligible for a tax deduction under Section 80C up to Rs 1.5 Lakhs a year. This is a collective deduction on all the tax saving investments/expenses.

You also enjoy deduction under various Sections like Section 80D, 80DDB, 80G, 80E, 80DD, 80GG, 80EE, 80TTA, 80U and so on. Section 80 deductions are called Chapter V1-A. Check your eligibility under various sections to avail tax deductions. You also enjoy deduction on interest repayments on home loan EMIs up to Rs 2 Lakhs a year under Section 24. There are other Sections too which help you save tax.

“You have to add up income from all the heads listed above.  This is your gross total income. From this gross total income deduct tax exemptions and deductions under Section 80C and beyond. The resulting number is the income you have to pay tax. An Indian resident earning more than Rs 3,50,000 / year, is entitled to claim rebate under section 87A. Rebate under section 87A is allowed up to a maximum of Rs 2500,” said Sudheer.

--6-- File ITR

## Log on to the and register on the website. You have to provide a PAN, Name and DOB, and choose a password. PAN is your user ID.

## Click on the relevant ITR Form and choose the Financial Year.
## Download the applicable ITR Form.
## Open Excel Utility and fill up the Form by entering details using Form 16.
## Check the tax payable by clicking ‘calculate tax’ tab.
## Confirm data by validating the ‘validate’ tab.
## Generate XML File and save it on your desktop.
## Upload the saved XML File on ‘upload return’ on the portal’s panel.

## A pop-up will be displayed asking you to digitally sign the file.

--7-- Verify ITR

Don’t forget to verify ITR after E-Filing through ITR-V. ITR-V is the Income Tax Return – ‘Verification’ Form. This can be done through Aadhaar Card, Net Banking, or the Electronic Verification Code process on your mobile number and email.
Navneet Dubey
first published: Jul 23, 2018 10:52 am

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