Why Should You File Income Tax Return on Time?
The tax returns season is underway. You must take all steps
to ensure your return filing is error-free. For this, it is important to file
your returns punctually by the July 31 deadline and to keep yourself updated
about any changes in the tax filing norms.
If you wait till the last minute to file your returns, you
may commit mistakes in a hurry and will have to file a revised return by March
31, 2019. From assessment year 2018-19, if you file your income tax return
(ITR) after the due date, you may have to pay a penalty up to Rs. 5,000 if you
file by December 31 and Rs. 10,000 thereafter. For those whose income is under
Rs. 5 lakhs, the penalty is Rs. 1,000.
Take a look at some
of the important changes to ensure an error-free filing well within the July 31
- Income tax slab rates have changed for AY
2018-19. For individuals whose taxable income is between Rs. 2.5 lakhs and Rs.
5 lakhs, a rate of 5 percent would be applied. The tax slab of 20 percent
remains the same for individuals earning Rs. 5 lakhs to Rs 10 lakhs, and 30
percent for income above Rs. 10 lakhs.
- If you own more than one home, then till AY
2017-18 the entire interest paid on the home loan was allowed as deduction
under Section 24B. But now it has been restricted to Rs. 2 lakhs in a financial
year. Earlier, the complete loss from house property was allowed to be set-off
without a ceiling, but it is now restricted to Rs. 2 lakhs in a financial year
and the remaining loss can be carried forward for the next 8 years.
- Earlier, the holding period to claim long-term
capital gain tax on immovable property was 3 years, but from AY 18-19 the
holding period has been reduced to 2 years.
- The Base year to calculate the indexation for
ascertaining LTCG was 1981-82 earlier. It is 2001-02 from this Assessment year.
- Earlier, there was no surcharge on an
individual’s income, but from this year a 10 percent surcharge will be
applicable if the total income exceeds Rs. 50 lakhs up to Rs. 1 crore. If the
income exceeds Rs. 1 crore, a surcharge of 15 percent will be applicable.
- Section 87A earlier provided a rebate up to Rs.
5,000, but the same has been slashed to Rs. 2,500.
- Changes in ITR form Sahaj or ITR-1 form will now
require additional details related to salary break-up. It would need details of
perquisites, allowances, et al. It would also require detail of income from the
property including rental income, tax given to local authority, etc.
- In the new ITR form, you need to mention the
details of exemption from capital gain separately. For each section such as Sec
54, 54 B, 54 EC, 54 GB, etc. you have to mention the details in the relevant
- ITR 4 has also changed, as it would now need
additional details such as secured/unsecured loan details, fixed assets,
capital account, etc.
- GST details are required while filing ITR
starting this year, you have to specify the exact turnover details mentioned
while filing Goods & Services Tax. This can be cross-checked by the Income
Tax Department. You also need to mention the GST detail in ITR.
Tips for an error-free
- Depending on your mode of filing returns -
either through a private tax filing portal or through the government one, you
should be aware of the form you need to fill. In case it is done through a
private portal, the correct form will be chosen for you. If you file via the
government website, you will have to manually choose it.
- Since the IT Department has introduced 7 new
forms this year, it is wise to have some time in hand to pick the correct form
and avoid mistakes.
- Keep all important documents handy and do your
calculations beforehand while filing returns to save time and to keep errors
- Claim all tax benefits and deductions properly
-even the ones you forgot to mention in your tax declaration
- Take note of important details like interest
earned from recurring deposits and fixed deposits, which are fully taxable at
the applicable slab rates. Interest earned up to Rs. 10,000 from savings bank
account is exempt under Section 80TTA.
- While filing your returns, you would also require
time to verify your tax deducted at source details in Form 26AS. Any mismatch
should be brought to the notice of your employer. Again, you need time to make
rectifications, therefore plan ahead to avoid last-minute rush which can cause
By being aware about the changes and updates in the tax
filing norms discussed above, you can avoid the last-minute hassle and have an
error-free filing process.
Any assistance or guidance needed in relation to Income Tax
E-Filing or any other matters, please reach out to us at firstname.lastname@example.org