We have reached that time of the year again when we need to file Income Tax Returns. The time when the day is fast approaching and you start hearing conflicting things from your colleagues, friends and family about what to do and what not to do when filing your taxes. Often the reality is far more simple and different from the hearsays. This article is about 10 myths about ITR Filing for salaried employees busted.
There are a lot of misconceptions about various deductions, exemptions, and Income Tax Return filing requirements that may leads to incorrect filing of Income tax returns, unnecessary delay in processing of Income tax returns and also might result in taxpayers paying more taxes that the actual liability.
So, in an effort to save you from doing bigger mistakes we are sharing Top 10 Myths about Income Tax Return Filing for Salaried Individuals.
10 Myths about Income Tax Return Filing for Salaried Individuals
Myth 1: TDS has already been deducted by the employer, so there is no need to file the Income Tax Return
Fact: Even if the entire tax has been deducted at source by the employer and there is no more tax liability, you still need to file your tax return.
Payment of income tax and filing of income tax returns are two different set of liabilities and are independent of each other. In case your total income exceeds, the basic exemption limit, you have to discharge your tax liability that can be either by way of TDS or by payment of advance tax.
However you are liable to file your income tax return if all your income before deductions is more than the basic exemption limit.
Myth 2: No need to file Income Tax Return if salary income is not exceeding Rs 5 lakh.
Fact: The Income Tax Department (IT Dept) has made it mandatory now for individuals earning up to Rs 5 lakh annually to file income tax returns.
From the assessment year 2013-14, e-filing Income Tax Return has been made compulsory for those earning a total assessable income of more than Rs 5 lakh.
Hence if your income is below the limit of Rs. 5 lacs you can either file a manual or an online return. However, from the financial year 2013-14, if your taxable income is Rs 5 lacs or less, you would be entitled to an additional rebate of Rs 2000 or actual tax payable (whichever is less). Sec (87A)
Myth 3: Since I am filing my Income Tax Return online, there is no need to send any kind of physical document.
Fact: E-filing your return without a digital signature requires you to file ITR V. ITR V is Income tax return Verification form. It is your e-filing acknowledgement and should be signed and posted within 120 days of e-filing.
Signing is a vital requirement to be undertaken by an assessee. Generally, assessees are in a hurry to file income tax return and they forget to sign & submit the ITR in case of manual filing and ITR V in case of online filing of income tax return without DSC.
Not sending ITR V or sending it without your signatures may lead to rejection of the ITR filed.
If you miss submitting your ITR-V within 120 days, your e-filing will be considered as null and void. It means that it will be considered that you have not yet filed your return. In such a case you will have to file revised return, get a new ITR-V and submit the same within 120 days.
Myth 4: If I have not filed my Income Tax Return by the due date, I cannot file it later.
Fact: You can file a return even after the due date. You can file a belated return u/s 139(4). However, if any tax is payable by you will have to pay penal interest for delayed filing @ 1 % per month from the due date of filing till the date you actually file.
Myth 5: Once the tax has been deducted it cannot be recovered later on.
Fact: If your income is below the taxable limit, then you can claim the refund for the TDS by filing your income tax return. Even in case your tax liability is lower than the tax actually deducted you can claim the refund for the excess tax deducted from your income.
Myth 6: I forgot to submit proof of my tax savings investments to my employer, now I cannot take deductions for my investments.
Fact: Form 16 is not the end of the story. You can declare such investment in your return and reduce your taxable income. You need to recalculate tax and claim refund. This is true even for HRA and LTA.
Myth 7: The Income Tax Return once filed, cannot be revised
Fact: For salaried and self employed (whose accounts are not audited), the normal due date of filing of income tax returns is 31st July of the year. However, in case you find any error or omission in the return filed, you can revise your return of income if the same was filed by the due date i.e. 31st July.
Myth 8: E-filing of Income Tax Return is unsafe
Fact: E-filing is safer than paper filing as your return is going directly into Tax Authorities’ Computers. But you must check the trustworthiness of the site you choose to prepare your income tax return.
Myth 9: I cannot cross check the details of tax deducted/collected from my income
Fact: Income tax department facilitates every PAN holder to view its Tax Credit Statement (Form 26AS) online. Form 26AS contains following information:
- Details of tax deducted on behalf of the taxpayer by deductors;
- Details of tax collected on behalf of the taxpayer by collectors;
- Advance tax/self assessment tax/regular assessment tax, etc. deposited by the taxpayers (PAN holders);
- Details of paid refund received during the financial year;
- Details of the High value Transactions in respect of shares, mutual fund etc.
Myth 10: I need a digital signature to file my Income Tax ReturnÂ online
Fact: IT act gives you two options for filing your online return i.e with digital signature and without digital signature. If you are filing your IT return using your digital signature then the ITR filing will be completed at the moment you upload your IT return file to the website. However, if you are filing without digital signature, you need to send a signed copy of ITR V to IT office, CPC, Bangalore.
To conclude: It’s true that no one enjoys filling out their taxes. But at the same time it is also true that no one would want to pay extra taxes in terms of interest and penalties. With the numerous options, including online, available to make filing your return easier than ever, it is advisable to file your return on time to avoid hassles later.
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This articles was originally published by Alok Patnia on Taxmantra.com.