As you near the deadline for filing your returns for FY-17 (AY 2017-18), make sure you pay attention to changes in filing requirements this year and avoid the common mistakes that tax filers often make. You may end up delaying your refund or even pay penalty for such mistakes. Here are some points worth keeping a tab of before filing your returns
E-filing or physical filing?
If your salary income is greater than Rs 5 lakh then you will have to mandatorily go for e-filing.
People whose salary income is less than Rs 5 lakh but have other sources of income that takes the total income to over Rs 5 lakh will also have to do e-filing. In other words, if your total income for the year exceeds Rs 5 lakh (excluding savings bank interest if it is less than Rs 10,000) you will have to file online.
But you may still opt to file online. Remember, refund claims etc, may be processed faster when returns are filed online. You don’t need a digital signature to file online.
Aadhaar number
If you have a Aadhaar number you ought to be providing it for all returns filed after June 30, 2017. Instead of waiting to match it at the last minute, make sure that you link it right away. That way you will have time to rectify any mismatch that may arise. Your returns will be invalid in the absence of a linked Aadhaar number.
Which ITR?
If you are an individual with salaried income then either ITR-1 or ITR-2 will apply to you. ITR-1 is applicable if you have an income up to Rs 50 lakh, one house property and other interest income. It will not apply if you have capital gains from property, gold, mutual funds or stocks or EPF/PPF withdrawals. In those cases, ITR-2 will apply. ITR-3 will apply for those individuals and HUF having income from a proprietary business or profession.
TDS deducted
Whether you are filing offline or online, you will likely have TDS deducted by various sources- your employer or bank or a company. You can verify these with the Form 26AS credit statement generated by the tax department. In case you have never heard of this, go and register with the tax dept. or simply login to your internet banking account and you will likely see it in the menu. Click it and it will link you automatically to the Income Tax website.
This statement will show the summary of all tax deducted, including advance tax paid or any refund to be made etc. by various entities. Ensure that the individual TDS certificates or the amount mentioned in Form 16 tallies with this.
‘Verify’ your tax return
If you are e-filing your returns, it is not enough that you have filled out all the details and submitted them. You need to ‘verify’ the returns and send the documents to the IT department. You can either -e-verify your returns (through your bank account) or get a printed copy of your filing (ITR-V) and sign and send it to CPC-Bengaluru. Only then is the process complete.
Mandatory disclosures
There are some mandatory disclosures that the (respective) forms warrant for FY-17. Some of the noteworthy ones are:
• Cash deposits exceeding Rs 2 lakh made between November 9 and December 30 of 2016 have to be disclosed. Make sure you have checked all your bank statements to get this number right
• A separate section 10 (38) has been inserted to mention exempt Long-term Capital Gains Tax.
• Section 10 (34) needs to be used for exempt dividend disclosure from Indian companies.
• Section 19 C has been introduced to mention the PAN of the buyer of the immovable property exceeding Rs 50 lakh.
Revised returns
Until last financial year, you had 2 years (from the end of the financial year for which the original return was filed) to correct your returns and file a revised return. From A.Y 2017-18, you will get only 1 year to revise your return.
Report correct income
Last though not the least, make sure you report all your income and report the correct income. Here are a few examples of where you may also unknowingly get it wrong:
– Not filing interest on bank deposits, corporate deposits or other interest income just because no TDS was deducted on the same or they are below the TD limit. All interest income is taxable and must be disclosed
– Disclosing an imputed rental income on property if you have more than 1 property and are not really letting out the property
– Disclosing capital gains, whether exempt or not, on shares, mutual funds, property or gold
- Merger of Navi Overnight Fund into Navi Liquid Fund and Navi Conservative Hybrid Fund into Navi Aggressive Hybrid Fund
- Intimation of suspension of subscription in Bandhan US Equity Fund of Fund
Winning Funds, Losing Streaks: Decoding the Mystery of Short-Term Underperformance
Wealth Conversations – November 2024- Notice of Change in Fundamental Attributes of DSP Equity & Bond Fund and DSP Quant Fund
I’m investing in mutual funds for years now, and am a salaried person. What would be the IT calculation for Mutual funds and when it should be declared and paid? Only when I redeem? Or every year even if I’ve not redeemed any?
Hello,
For both equity and debt mutual funds, tax applies only at the time of redemption and is called capital gains tax. Capital gain is the difference between your redemption proceeds and your investment cost. As long as you hold your investments and do not sell, you will have no tax implication. If you hold dividend option in a debt fund, then dividend distribution tax (DDT) is deducted by the AMC and the net proceeds are given to you. You do not have to pay tax additionally. You can read these two posts to understand mutual fund taxation in detail – Part I and Part II.
Thanks,
Bhavana
I’m investing in mutual funds for years now, and am a salaried person. What would be the IT calculation for Mutual funds and when it should be declared and paid? Only when I redeem? Or every year even if I’ve not redeemed any?
Hello,
For both equity and debt mutual funds, tax applies only at the time of redemption and is called capital gains tax. Capital gain is the difference between your redemption proceeds and your investment cost. As long as you hold your investments and do not sell, you will have no tax implication. If you hold dividend option in a debt fund, then dividend distribution tax (DDT) is deducted by the AMC and the net proceeds are given to you. You do not have to pay tax additionally. You can read these two posts to understand mutual fund taxation in detail – Part I and Part II.
Thanks,
Bhavana
Am a public sector employee….E file done and submitted…And aatharavu verification also over…On i ITR_5 copy i noticed amount entered on tax deducted was less what my form 16 indicated….What now i have do? Pl.guide me
Am a public sector employee….E file done and submitted…And aatharavu verification also over…On i ITR_5 copy i noticed amount entered on tax deducted was less what my form 16 indicated….What now i have do? Pl.guide me
Hi Bhavana,
Thanks your Blog 🙂
I have a query regarding ITR form selection could you please suggest on this.
I am a salaried employee till now filled ITR-1 but this year sold ELSS mutual funds and received interest for Investment in relatives business.
Please suggest which ITR i need to use this time based on above 2 incomes.
Thanks
Venkateswara Rao
Hi Bhavana,
Thanks your Blog 🙂
I have a query regarding ITR form selection could you please suggest on this.
I am a salaried employee till now filled ITR-1 but this year sold ELSS mutual funds and received interest for Investment in relatives business.
Please suggest which ITR i need to use this time based on above 2 incomes.
Thanks
Venkateswara Rao
Hi sir / madam,
I am currently not working and do not have a salary. However, I have been trading in F&O derivatives and have incurred a loss of Rs 42000 in the corresponding year. I have some fixed deposit and some money in my savings account, the interest which I get is below the taxable limit. Should I file my tax returns even if I fall outside the tax bracket? I read some where that if you are trading in derivatives, even if you do not have to pay any tax you have to file the tax returns and the ITR-4 form should be filled. Since I have incurred a loss in F&O should I get it audited by a CA?
Thanks
Hi sir / madam,
I am currently not working and do not have a salary. However, I have been trading in F&O derivatives and have incurred a loss of Rs 42000 in the corresponding year. I have some fixed deposit and some money in my savings account, the interest which I get is below the taxable limit. Should I file my tax returns even if I fall outside the tax bracket? I read some where that if you are trading in derivatives, even if you do not have to pay any tax you have to file the tax returns and the ITR-4 form should be filled. Since I have incurred a loss in F&O should I get it audited by a CA?
Thanks