The last date to file income tax returns (ITR) for FY 2019-20 is extended until November 30, 2020. Even though you have nearly 1.5 months for the whole process, it is important to begin now to avoid any last-minute complications. Moreover, the advantages of filing income tax returns in time include the ability to plan strategically, carry forward losses and also avoid late payment fees. You must be careful in your ITR process and ensure all details are true and valid.
Things to keep in mind before income tax filing:
Keep your documents handy: Before filing the income tax return, be sure to collect all necessary documents. These include Form 16, salary slips, as well as your interest in earning certificates. The documents will be used to compute your Gross Total Income and also to know any TDS (Tax Deducted at Source) details from your income in FY 2019-20. It is important to ensure that all TDS certificates, such as one from the bank, salary income, etc. are in the TRACES format. You should digitally sign and verify all copies. Moreover, if you have earnings from mutual funds or other equity-linked funds, you will require the statement for the same.
Assess Form 26AS: Form 26AS is a comprehensive statement of all tax deductions made from your income and deposited against your PAN during FY 2019-20. Verify all details of Form 26AS with your TDS certificates to ensure the TDS deducted is paid to the government and registered against your PAN. In case of discrepancy, approach the collector and rectify the details. If incorrect details are registered, you will not be able to claim any credit on the tax deductions against your PAN.
Measure your Gross Total Income: After verifying all details and collecting the documents, you must estimate your taxable income for the financial year. Remember to include income from all five heads of the income tax law and claim applicable deductions for each to minimise tax liability. Once you compute your taxable income, you should assess your tax liability according to income tax slabs. You can also use an online tax calculator for more accuracy.
Know the final tax payable: Post computing your taxable income, minus the taxes that you have already paid. These include TDS, TCS and any other advance tax. To this amount, add the interest payable under 234A, 234B and 234C. If the tax is higher than Rs. 1 lakh and the same was not paid before July 31, 2020, you will have to pay a charge. Calculating the final tax will provide details of tax paid, unpaid, excess money paid, etc.
Carefully file ITR: Once you know the tax amount, file for ITR by choosing the right forms. For each assessment year, the Income Tax Department notifies ITR forms. The assessment year is the year following the financial year for which the return is being filed. You can file for ITR online or seek help from a professional chartered accountant to do it on your behalf.
Verify your ITR: You can verify your income tax return electronically or physically. In the case of electronic verification, there is no need to send any documents to the tax department. You will simply need your mobile number linked to your Aadhar Card for OTP-based verification.
For physical verification, you will need to send a signed copy of ITR to:
CPC, Post Box no. 1,
Electronic City Post Office,
Once the verification is complete, you will receive an e-acknowledgement.
After the whole process, the Income Tax Department will process your return. Be careful to provide all authentic details, while filing income tax returns within the stipulated timelines.