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Tips to file your tax return
April, 04th 2009

At the outset a common misconception that a taxpayer may carry is that he is not required to file any return because his employer has deducted he requisite tax at source from his salary. Every person, however, is supposed to file a return even if the entire tax has been deducted and paid to the government by employer.

The first step in filing of a tax return is to select the correct form of return. It should be noted that the Forms of return may be changed in the middle of the year. The taxpayer, therefore, need to file in the new form. There are eight Forms of return notified by the tax authorities. Out of these, four are applicable to individuals/HUFs. Therefore, correct form needs to be filled in.


1. Interest from bank deposits or NSC certificates should be disclosed

Even though the deduction for interest incomes was withdrawn three years back, many people still do not disclose the interest which they may have earned from their bank deposits or NSC certificates. No matter how small the amount is, such interest should be disclosed in the return. One should not make the mistake of skipping the interest income altogether on the basis that it is not shown in Form 16, as in many cases, the employer may have not at all considered the interest income for computing the TDS of the employee.

2. Deduction for investment made under 80C, 80CCC & 80 CCD is restricted to Rs 1 lakh

Further, it should be noted that deduction for investment made under Section 80C, contribution to pension fund under Section 80CCC or for contribution to pension scheme of the employer under Section 80CCD is restricted to an overall limit of Rs 1 lakh. Benefit under Section 80C can also be claimed for tuition fees paid by an individual for their children and for the repayment of principal amount in respect of home loan taken by him.

3. Income of spouse or minor child may have to be clubbed with the income of taxpayer

There can also be cases where the income of spouse or minor child of the taxpayer may be liable to be clubbed with the income of the taxpayer as per provisions of tax laws. In such a scenario, it is pertinent that the correct Form of return is used to file the return of income.

4. Be cautious while calculating surcharge and education cess

It is common to make a mistake while calculating the amount of surcharge and education cess on the amount of tax payable. It needs to be noted that surcharge of 10% is not required to be added to the tax if the total income does not exceed Rs 10 lakh. However, education cess should be added to the amount of tax at the rate of 3% even if the total income is less than Rs 10 lakh. The correct method is to first add surcharge of 10% to the tax, if it is applicable, and thereafter, add education cess at the rate of 3% on such aggregate of tax and surcharge.

5. Safely file all relevant documents for future needs

Though the requirement to attach various certificates, documents, etc., along with the return has been dispensed with, one should not commit the mistake of trashing away such documents on the premise that these would not be required in the future. The tax authorities might require any document to be furnished by the taxpayer in case a scrutiny proceeding is initiated for verifying the claims made in the return.

6. Double check all key information like PAN No., bank account details, communication address etc

Some taxpayers may commit error in quoting the correct Permanent Account Number (PAN). The correct 10 digit PAN should be filled in legibly. Appropriate care is required while filling in the address as all the notices and other communication from the tax authorities is posted to this address.

In case of a refund, the bank account number needs to be filled in accurately. In case the refund is opted to be received via ECS direct into the bank account, adequate care should be taken to correctly fill in the MICR code. Any mistake may lead to problems in credit of tax refund and consequent inconvenience.


1. File the return in time

Taxpayers often tend to wait too close till the last day to file the return. This often leads to a lot of inconvenience. And even if, in order to avoid the long queues at the counters receiving the paper returns, a taxpayer plans to file the return online, filing very close to the last day is not advisable given the fact that peak load on the servers of the e-filing website during the last few days may make the whole online filing experience quiet frustrating. If the clock on the last day ticks beyond 12 at midnight, any return filed thereafter would be treated as having been filed on the next day.

Filing return after the due date may prove to be a costly mistake for a taxpayer who has incurred losses which he wants to carry-forward to future years (e.g., house property loss, short-term capital loss, long-term capital loss, etc.). Under the tax laws, such losses are not allowed to be carried forward for being set-off against the income of future years unless the return has been filed by the due date even though all the taxes have been pre-paid. Mostly, the taxpayers filing a loss return for the first time commit this mistake.

2. Online filing of returns

Many taxpayers, opting to file their return online, are of the perception that having filed the return online without a digital signature, submission of Form ITR-V is a mere formality which can be completed anytime. This is a misconception. If the return is filed online and the taxpayer does not have a digital signature, he should take two printouts of Form ITR-V, verify them and submit to the tax authorities within 15 days of filing the return online. The taxpayer would be returned one copy of Form ITR-V by the receiving official after affixing the stamp and seal, which he should preserve carefully. If Form ITR-V is filed beyond 15 days, it would be deemed as if the return was not filed online in the first place and it might be too late by then.

Similarly, if a paper return is filed, the acknowledgement slip should be preserved carefully.

Thus, a little extra precaution on the part of taxpayers can help them avoid committing mistakes while filing of the tax return and keep them away from taxman.

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