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4 Point Checklist While Filing an Income Tax Return

4 Point Checklist While Filing an Income Tax Return

Filing ITR | Income Tax Return Checklist
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Dread filing your income tax return and falling under scrutiny for incorrect ITR? Worry not. Here is the step-by-step process to file your income tax return. Apart from filing necessary details, you should also check if your investments fall under tax saving schemes or not. Some of the best tax-saving investments will allow you to claim a deduction of up to Rs. 1.5 lakhs under section 80C and 80D.

4 Quick Steps to File an Income Tax Return

Step 1 - Collect All Relevant Documents

Ensure the following documents are ready before you start filing your income tax return:

a) PAN Card (Permanent Account Number): This document will work as a User ID for you at the time of signing on the income tax website.

b) Aadhaar Number: The second important document you require to file an income tax return is the Aadhaar number. This is applicable for Individual taxpayers only.

c) IT Return Copy: The third essential document for filing an income tax return is a copy of your last year's tax assessment.

d) Form 16 & TDS Certificates: The fourth important document is Form 16 issued by your employer.

e) Fixed Deposits’ Statements & TDS Certificates: The fifth required document required while preparing IT return is the interest certificate to show the amount of income you earned during the said financial year on balance in the saving accounts/Fixed deposits/Recurring deposits etc

Step 2 - Prerequisites for Filing the Return

a) Visit the website http://incometaxindiaefiling.gov.in and create your profile

b) Keep your operational email id and mobile number ready to verify the profile through OTPs

c) Add your Aadhaar number in the form and verify the same

d) Choose the form according to your type of employment such as salaried, self-employed, businessman, corporate. ITR 1-SAHAJ is the application that a salaried individual is required to fill.

Learn the precautions that you need to take while filing an ITR form.

Know Your ITR Form

ITR-1 SAHAJ form is for individuals being a resident (other than not ordinarily resident) having total income upto Rs.50 lakh, having Income from Salaries, one house property, other sources (Interest etc.), and agricultural income upto Rs.5 thousand

ITR-2 is the ITR form for an individual or a Hindu Undivided Family who have an income by any other source apart from "Profits and gains of business or profession".

ITR-3 is the form for individuals and HUFs having income from profits and gains of business or profession

ITR-4 SUGAM form is for Individuals, HUFs and Firms (other than LLP) being a resident having total income upto Rs.50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE

ITR-5 is for persons other than- (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7

ITR-6 is for Companies other than companies claiming exemption under section 11

ITR-7 is for persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) only

Step 3 - Filing the Return

a) You can e-file the income tax return. Also, save the draft every time after updating details to avoid loss of data.

b) For filing income tax returns offline, download the Java or Excel Utility available under the ‘Download’ section of the income tax website

c) Click the Prefill option in the Java Utility once you are connected. The system will capture your details automatically.

d) Download Form 26AS from the income tax website to view your tax credit. This form shows the overall amount of tax that is deducted along with the paid amount.

e) If you are a salaried individual, then your IT return will look similar to that of Form 16 offered by your employer.

f) Make sure the deductions you claim while filing the IT return are as per Form 16.

g) Make sure you mention income from other sources.

h) Make sure you have included the interest income earned during the said financial year on the balances in all saving accounts. You are eligible for a deduction of up to Rs. 10,000 as per Section 80TTA.

i) Ensure that all your insurance policies are entitled to deductions under the IT Act.

Step 4 – Electronic Verification of the Return

a) The income tax return is valid only after the completion of the verification process

b) You have two options to verify the same. One method is to perform physical verification and the second is e-verification through adhaar otp or net banking login

c) In the case of physical verification of the return, you need to print the acknowledgement of ITR-V and sign the same with a blue ball pen. You will need to send the signed copy to the Centralized Processing Centre in Bengaluru through courier

This process must be completed within 120 days of filing your return

After receiving your physical verification request, the Income Tax Department will send you an e-mail as an acknowledgement of your request. This email will be sent on the email that you have filled at the time of filing income tax. The Income Tax department will also send SMS as an acknowledgement of your physical verification on the mobile number you have mentioned while filing the income tax return.

Tax Saving Investments

To lower your tax outflow, you can invest in multiple tax saving schemes every year. These schemes will allow you a tax rebate under section 80C and 80D. Some of the best tax-saving investments are:

a) Term Insurance Premium: Term life cover is one of the essentials of your financial plan. The premium is eligible for section 80C deduction.

b) Unit Linked Insurance Plans (ULIPs): Invest in equity or debt or a mix of both. Five-year lock-in period and tax-free withdrawals and maturity for investments up to Rs. 2.5 lakhs a year (w.e.f. 1st Feb 2021).

c) Life Insurance Savings Plans: One of the safest long-term investments with guaranteed returns. These schemes also offer completely tax-free maturity value.

d) Retirement Plans: Your investments in any retirement plans whether from life insurance companies or Employee Provident Fund Organisation (EPFO), like NPS and PPF, will also avail you the tax benefits within section 80C limits.

e) Health Insurance Plans: Paying premiums for a health insurance cover for your family and parents are eligible for deduction under section 80D. You can claim a deduction of up to Rs. 75,000 if your parents are senior citizens. In the case of senior citizens section 80D also allows medical expenses within the year for the deduction.

f) Other Small Savings Schemes: Post office schemes like a senior citizen savings account, National Saving Certificate (NSC), 5-year tax-saving deposit, also allow deduction under section 80C.

g) Tax Saving Mutual Fund: Equity-linked saving scheme or ELSS is a pure equity mutual fund that also falls under the purview of section 80C. The scheme has a short lock-in period of 36 months. However, this lock-in period will be counted separately for each investment, even if you invest in the same scheme.

Apart from these investments, you can claim the following expenses as deductions from your gross total income:

  • Tuition fees for a full-time education course
  • Home loan principal repayment

With these steps and these many tax-saving schemes, you can not only save money on tax but also file your tax return with ease.

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