Income Tax Return filing: The deadline for filing Income Tax Return (ITR) for the financial year 2019-20 is till the end of this year i.e. 31 December 2020. It is not right to wait for the last time to file tax return for assessment year 2020-21, but it is better to complete it as soon as possible. However, many people face problems in filing ITR, so here are some ways to make this process easier for them, which can be done in an easy way keeping this in mind.
Download Form 26AS for FY20 and Tax Return for FY19
Form 26AS contains information about fixed income and TDS (tax deducted at source) in FY 2019-20. Apart from this, there is also information about advance tax (self assessment tax) paid for the financial year 2019-20. In this form, there is also information about transactions of real estate, payments exceeding the prescribed limit of credit card etc. If the income and reported tax in Form 26AS are found to be different from the ITR, then the tax authorities will seek an answer. In such a situation, it is necessary that the complete details must be matched with the Form 26AS before filing ITR.
Downloading the tax return for the financial year 2018-19 will make it easy to list all the important documents like bank stents, interest certificates etc. Apart from this, if there is any forward loss, then it can be offset by gains according to tax provisions.
Find your residential status
According to the Indian tax law, the tax liability of an individual is determined on the basis of residential status. For example, if an individual has stayed in the country for most of the time and has traveled abroad for only a short period of time, then he will be considered as resident and ordinarily resident here and tax will be made on his global income.
That is, if that resident has any income from abroad, then there will be tax liability on it. Conversely, if an Indian has been abroad for most of the time, he can be non-resident or resident but will not be ordinarily resident and will only have tax liability on the income that has been made in India.
Choose the correct tax form
While filing ITR, it is most important to choose the correct ITR form. The same depends on many factors such as income head, residential status of individual, etc., choosing the wrong ITR form will make the tax return filing either defunct or illegal.
Fill in the basic details
Nowadays income tax authorities contact taxpayers through e-mail address, mobile number. In this case, fill not only your communication address but also the email address and contact number by verifying. Taxpayers are advised to update this information on their profile page on the income tax portal as well.
Keep all documents ready
Form 16, Rental Agreements, Property Tax Receipts, Interest Certificates for Home Loans, Bank Statements, Interest Certificates of Bank Loans, Bank Statements, Interest Certificates, Capital Gains Statements, Tax Saving Investments (eg Mediclaim, Insurance Premium, Donations) Keep documents ready. It is necessary to check the bank statements once if any income or asset is not exempted from appearing in the tax return. It also has to show the interest received on the savings account.
How to show cryptocurrency income in ITR, what do experts say?
Also show exemption income
According to tax provisions, there is no tax liability on the exemption income (tax-deductible income). However, this income should be reflected in the tax return. Proper documentation is necessary for this type of income because the tax authority can also scrutinize if this amount becomes more.
Pre-validation of bank account
Income tax authorities refund those bank accounts that are pre-validated, ie, validate your bank accounts before filing ITR. So if you want to get refund, then validate them before filing ITR.
Foreign income and assets
If an individual has a property abroad or an account with any bank outside India and comes as a resident and ordinarily resident, then the income from abroad will have to be shown in the tax return as tax liability will be incurred on it.
Knowledge of assets and liabilities
If the income of an individual is more than 50 lakhs, then it is mandatory to mention the information of all its assets and liabilities till the last day of the financial year. In this, not only real estate has to be given but also information about movable assets like bank balance, loan and advances, cash in hand, shares and securities.
E-Verification
If any return has been filed without verification, then it will be considered invalid. In this case, after filing the online return, he has to verify through Aadhaar / Net banking option within 120 days. If this is not possible, then ITR-5 acknowledgment has to be signed and sent to Income Tax Authorities (CPC Bangalore) within 120 days.
Source: www.financialexpress.com