The due date to file income-tax returns for the financial year 2019-20 was extended to January 10, 2021. So, you would do well to get started with your return filing process right away.
Here’s a quick guide to help you sail through the tedious process with minimal hassles, while avoiding mistakes that can delay refunds or, worse, invite notices from the tax department.
Why is it important to select the right income tax return form?
Depending on the category you fall into, there are seven Income Tax Return (ITR) forms for you to choose from for filing your return for the assessment year 2020-21 (financial year 2019-20). Out of these, five are meant for individual taxpayers, depending on their income level, sources of income and other rules. Selecting the correct ITR form is critical, as filing a wrong ITR form is considered an invalid return.
I had forgotten to submit investment proofs to my employer for claiming deductions in January. Can I claim these while filing returns?
Yes. The deadline set by employers for submitting investment declaration to avail of deductions under section 80C, 80D, 80E and so on usually falls in January and February. However, despite multiple reminders from employers, many tend to skip submission of proofs for tax-saver investments. As a result, a higher amount of tax is deducted from the salary during the last three months of the financial year. If you missed submitting the proofs, you can enter the details in your tax return form and claim the deductions and tax refund.
What are the most common errors made while filing income-tax returns?
Errors could be as simple as not choosing the right assessment year. Remember, you will be filing income tax returns for the financial year 2019-20 and, thus, assessment year 2020-21. You must also double-check your bank account details. Entering incorrect details could lead to a delay in getting your tax refund.
This year, you will have to make scrip-wise disclosure of long-term capital gains made on sale of equity-oriented mutual fund units or shares. You must ensure that you compute these gains correctly by taking into account the market value of these investments as on January 31, 2018. You must obtain the NAV of the correct plan (growth/dividend and direct/regular) of the mutual fund scheme.
What if I forget to disclose some income that I had earned in the past financial year? Will the income-tax department send me a notice?
It’s possible that some of us forget to disclose certain incomes, even if unintentionally, in the rush to file our tax returns. This is the case particularly with salaried individuals who rely on their Forms 16, which does not contain details of capital gains made, fixed or savings deposit interest income, for instance. If the income tax department detects this missing income, you could end up with a notice.
Do I need to complete the verification process after filing tax returns?
Yes. Simply because it won’t be considered complete until you verify the returns within 120 days of having filed it. And, many forget to do so even though the electronic process can be completed in a matter of minutes. You can also download the ITR-V, or acknowledgement form and send it physically to the tax department’s CPC in Bengaluru.
Should I opt for the e-verification process or the physical mode?It is best to take the online route. The physical process is more laborious – you have to download, print and sign the hard copy before sending it to Income Tax CPC, Bengaluru, by post. On the other hand, e-verification takes just a few minutes. You can use Aadhaar-OTP or your internet banking account, your pre-validated bank or demat account to generate an electronic verification code (EVC) to complete the process.