ITR Filing: Due to the Corona epidemic, many people are facing problems regarding filing income tax returns, in view of which its deadline has been extended. For individuals whose accounts are not to be audited under the provisions of the Income Tax Act, 1961, the deadline for filing ITR for the financial year 2020-21 (assessment year 20211-22) has been pushed forward by two months. Earlier it was to be filed by 31 July 2021 but now it can be filed till 30 September 2021. The Central Board of Direct Taxes (CBDT) has already notified the ITR forms (Form 1, 2 and 4) for the financial year 2020-21. Before filing ITR, it is important to take care of some things so that there is no problem later.
Choose the correct ITR form
The taxpayer should choose the correct ITR form based on his residential status and income from various sources so that there is no mistake in filing. For example, taxpayers who have income up to Rs 50 lakh from salary, a house property and other sources and are resident individual have to use ITR-1 form whereas taxpayers who are non-resident or not ordinary resident or have If there is income from capital gains, then they have to use ITR-2 form.
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Choose carefully new or old tax system
A new tax system was introduced for the taxpayers under the Finance Act, 2020. In this new system, tax slabs and rates were revised in lieu of exemptions and deductions. While filing the tax return, taxpayers should choose the option in which they benefit from the old and new tax regime. Those who have income from salary, they can also change the tax system they have told their employer while filing ITR.
Prefilled ITR Form
This year, certain data will be pre-filled in the ITR form such as personal details of the taxpayer, salary income, dividend income, interest income and capital gains, all these information will be available to the taxpayers in the form 26AS. This will make it easier for taxpayers to file ITR as most of the required details will be pre-filled. Individuals should verify all the information at the time of filing and add the income which is not shown. However, if any information is found to be incorrect, then contact your bank or employer so that the correct details can be shown in Form 26AS.
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Verification of prepaid tax in Form 26AS
Tax Deducted at Source (TDS), Advance Tax and Self Assessment Tax must be checked in Form 26AS. If any discrepancy is found in this, it should be reported to the employer (in case of salary income) or other payers (in case of other income) or banks (in case of advance tax / self-assessment tax payments). This will make the processing of tax returns easier.
balance tax payment
After computing the total taxable income, the tax liability should be calculated. After claiming the credit of prepaid tax, if there is any tax due on the tax return, it should be paid with interest before filing the tax return. It should be noted here that the last date for paying self-assessment tax exceeding Rs. 1 lakh The date was 31 July 2021 i.e. now the self-assessment tax due will have to be paid with interest and the last date for filing ITR is 30 September 2021.
show some important information
Several assets and financial investments are required to be shown in ITR filing. Indian bank accounts to taxpayers; unlisted equity shares; Details of directorship in companies domestic or foreign; Specific assets like land, building or movable property etc.; Bank deposits, shares and securities and cash in hand etc. and liabilities are required to be mentioned if their total income exceeds Rs 50 lakh. Resident individuals are also required to mention all assets (as ownership or beneficiary) outside the country.
Show exempt income information
Taxpayers are required to declare exempt income under Schedule EI. This includes agricultural income, exempt income of a minor child, income which is not taxable under double taxation avoidance agreement, etc.
Information on change of employment during the year
If a taxpayer has changed employment in any year, the salary, income from the previous employer has to be disclosed to the current employer and the present employer issues Form 16 and Form 12BA on the basis of this. ITR is filed on the basis of these forms. If this is not done, then there will be a reduction in TDS and in such a situation, the tax due on the return has to be paid along with interest before filing the return.
Compulsory filing in certain cases
Under the Finance (No. 2) Act, 2019, in certain cases, individuals whose income is not chargeable to tax are required to file ITR in certain cases. Under this, those who have paid an electricity bill of more than Rs 1 lakh, have deposited more than Rs 1 crore in one or more current bank accounts, and have to file ITR on foreign travel expenses of more than Rs 2 lakh on his own or other person’s foreign travel. mandatory.
What if ITR is not filed by the due date?
If a taxpayer is unable to file ITR by the due date due to lack of necessary documents/information, paucity of time, etc., late filing fee, interest on balance tax liability will have to be paid. Apart from this, some losses will not be able to carry forward.
(Article: Parizad Sirwalla, Partner and Head, Global Mobility Services – Tax, KPMG in India)