Samarth is a busy professional; between his official and family responsibilities, he has little time to prepare and file his income tax return. As a salaried individual, he mistakenly believes that he has discharged his obligation to the exchequer and is sufficiently compliant once his employer has deducted taxes on his salary even if he does not file his tax return. While he may see the glass as ‘half full', the tax authorities will certainly see it as ‘half empty'. Here are a few simple steps that can help Samarth or any taxpayer in finalising one's tax return.

Collation of documents

Documents (illustrative) that one needs to collate to finalise tax returns:

Form 16 provided by the employer, Form 16A downloaded from the NSDL Web site and verified as prescribed, Form 26AS downloaded from the income tax Web site;

Advance tax challan/s;

Lease deed for rental income and receipt for municipal tax paid;

Certificate from the bank evidencing interest payment for claiming interest deduction. A deduction of up to Rs 1.5 lakh is allowed for a self-occupied property and the entire amount for let-out property;

Details of brought-forward loss from previous year;

Sale and purchase bills/ documents for investments/ assets sold;

Investment proof such as PPF receipt, life insurance premium receipt, medical insurance premium paid for self or family, loan taken for higher education, investment in infrastructure bonds and so on;

Receipts for donations made that are eligible for exemption under Section 80G;

Bank statement for interest on savings account and fixed deposits, and other income credits;

Demat account statement for short-term/ long-term capital gain or loss;

Details of exempt income such as dividend income, interest income on PPF and so on;

If claiming foreign tax credit for taxes paid in a foreign country, a copy of the foreign tax return/ proof of such tax paid and tax identification number in the foreign country;

Details of assets held abroad such as bank accounts, financial interest in an entity, signing authority for a bank outside India, immovable property, any other assets in case of a ‘resident individual';

Statement of affairs, and income and expenditure account, as this may be handy in case of a scrutiny.

Payment of Self-Assessment Tax

Compute the final tax liability taking into account the income, eligible deductions and loss from house property/ other loss, if any. From the tax liability, deduct the TDS, advance tax and determine the balance tax payable. Interest would be payable if there is an advance tax liability (that is, tax liability on income after TDS exceeds Rs 10,000) that was not discharged as per the prescribed due dates. Taxes can be deposited either online or through cash/ cheque at authorised banks.

Find out which form is for you?

ITR 1 (Sahaj) — for individual with income from salary, one house property and other sources. For a resident individual with foreign assets/ financial interests, ITR 1 cannot be used;

ITR 2 — for individuals/ HUF (Hindu undivided family) that have no income from business/ profession;

ITR 3 — for individuals/ HUF who are partners in firms and not carrying out any other business/ profession;

ITR 4 — for individuals/ HUF with income from business/ profession under proprietary concern.

If Samarth is a salaried individual with other income and loss from house property, but no income from business/ profession, ITR 1 or 2 would be relevant. ITR 1 can be used where he does not have any capital gain/ loss/ foreign assets to report, else ITR 2 should be used.

Mandatory e-filing

An individual with taxable income exceeding Rs 10 lakh or assets located abroad (irrespective of the taxable income) should mandatorily file the return electronically. Only in other cases can a hard copy of the return be filed with the tax office.

How to e-file

If Samarth has income only from salary and interest from savings bank account not exceeding Rs 10,000 (and no loss from house property or otherwise to be claimed), a tax return is not required provided the taxable income does not exceed Rs 5 lakh and tax has been deducted at source.

Filing your tax return on time is an important obligation for every assessee. Delays attract interest of one per cent if any tax is due post July 31, and penalty of Rs 5,000 if tax return is not filed within March 31 of the following year. Further, no revision of the return will be possible. Hopefully, these simple steps will help Samarth realise the ease with which this obligation can be discharged and get everyone to see the glass as ‘full'.

Deepika Mathur is a Senior Manager with Deloitte Haskins & Sells.

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