Simplified Laws Guide to Taxation and Legal Concern There is no rocket science involved in filing your tax returns. However, filing returns that is an annual activity coupled with frequent changes in the law, tax returns and formats may make the job bit complex. That’s it. In this article I wish to write about certain points which you can consider while filing the return.
- Check Tax Credit Statement (Form 26AS) – This is one of the most important documents that you should look at while preparing and filing your Income Tax Return. This is a tax credit statement which shows TDS payments done by your employer, by your banker on interest, advance and self assessment tax paid by you. The TDS amount appearing in your Form 16 and Form 16A (if any) must tally with the Tax credit in Form 26AS. If there is a discrepancy, we suggest you to sort this out before filing your income tax return. In case TDS as shown in 26AS is lesser than TDS in Form 16, there is every chance of getting notice from Income Tax department
- Interest earned on Savings Bank account and Deduction u/s 80TTA – Remember that the interest earned on savings bank account is taxable. Kindly check your passbook; add up all the interest credits, offer it for tax. Under Section 80TTA of Income Tax Act, up to Rs.10,000/- interest earned on SB account is tax free. So, you have to consider the interest as income and claim deduction up to Rs.10,000/-.
- Interest income from Fixed Deposit – Interest on Fixed Deposit is taxable on annual basis. So, you have to offer Interest income for tax and consider TDS done by the banker
- Payment of Taxes – In case you have to pay taxes at the time of filing the return; kindly choose the right challan (for Individuals it is ITNS 280 (0021); fill up the correct Assessment Year (for the financial year ending 31ST March 2014; the Assessment Year is 2014-15) and fill the type of payment as Self Assessment Tax.
- Amount of Tax– double check the tax payable! If you pay more to the department, it will take atleast one year to get the refund from the department and if you pay less; you will get a demand notice!
- Deduction u/s 80C – Investment or tuition fee up to Rs.1,00,000 is deductable from the taxable income. Check whether you have considered this aspect while preparing your IT return. If not, you can consider while filing the return and avail tax benefits.
- Interest paid on housing loan – In case you have housing loan and paying EMI towards housing loan, you have to collect interest certificate from Bank or Financial Institution. The Interest paid on housing loan is eligible for tax saving. The upper limit for tax saving is Rs 1,50,000/-
- Sale of property or stocks or Mutual Funds – In case you happened to sell any property or mutual funds or stocks during the previous financial year, then you might have had Capital Gain or Capital Loss. This has to be declared in your Income Tax Return. Even if there is no tax liability, you have to declare the same. You may collect Capital gain or loss statement from the stock broker.
- Donation – Your employer wouldn’t have considered donation given by you while issuing Form 16. While filing the return, you can consider the donation and avail tax benefits.
- Bank Statement: In case your file is taken up for scrutiny assessment by the Income Tax department, the first document which the income tax officer will ask is Bank statement! We suggest you to offer all income earned during the year to tax. Undeclared income, credited to the bank account may invite trouble later.
- As per my experience, the taxpayers spend very little time (and do it on the last day) in filing IT returns. I suggest taxpayers to spend some quality time to analyze, understand IT returns, the details to be submitted to the department and file the returns on or before the due dates.
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