The deadline for the salaried class to file tax returns is approaching. Hence, it is very important that individuals complete the procedure in the right manner. Even though individuals could have filed their returns in late June or early July, many of them wait till the last few days to file returns. In case you are still struggling to get your returns in order, heres how you can go about it.
The process starts by selecting the right income tax returns form. The salaried class, which does not have income from business or profession, or capital gains, or income from agriculture, can opt for the Saral Form 2E, which is quite easy to fill and does not require additional calculations and disclosures. On the other hand, those who incur capital gains, or have business or professional income, have to fill Saral Form 2D.
While filling in Form 2D, investors must submit their bank details, along with the MICR code of their bank branch, which will be used to direct credit the tax refund, if any, to the bank. Most people run into problems on this front because they do not fill in the MICR code.
After selecting the returns form, individuals should collect the required documents. The most important document is Form 16, which is provided by the employer at the end of the year. If individuals have changed jobs during the year, they will have to submit two Form 16s. The next document is a certificate from the housing loan authority to classify the interest and capital repaid on housing loan. This will enable investors to calculate tax breaks in the form of division of amount repaid.
Individuals also have to gather the various proofs relating to their investments. In most cases, they dont need to do any additional work on this count, because the proofs would already have been generated when investments were made in the last financial year. Now, only the copies of the proof of payment have to be collected.
This includes premium paid on insurance policies, payments made to public provident fund (PPF) or copy of the National Savings Certificate (NSC) payment. At the same time, there is an ELSS investment and an account statement of the fund to show that investment made during the year is enough for the returns.
Individuals also need to consider any additional income, especially under the head of income from other sources, like bank interest, as this is liable to tax. There have been cases when individuals did not show bank interest earned on savings accounts, as it was a small amount; but more importantly, under Section 80L, an amount up to Rs 12,000 was allowed as a deduction, so there was no tax to be paid.
Now, this Section has been removed and the impact of this is that any amount will be liable to tax and hence, even small amounts will have to be shown while filing tax returns. Anyone who has a bank account will have this additional source of income, because every savings account earns some interest income even if it is only a few rupees and this will have to be shown as income.
Moreover, where there is additional income like dividends or long-term capital gains which is tax-free, and individuals do not have to pay any tax on this amount. But the amount under these heads which is claimed as tax-free, should be mentioned, so that no tax needs to be paid on that sum. If there is tax deducted at source (TDS) on interest payments or some other receipts, then the relevant TDS certificate should be attached with the tax returns.
Once all this has been completed, individuals wont face too much problem in calculating the final tax amount. If some tax needs to be paid, it will have to be done using a challan and the proof will have to be attached with the returns. Many banks accept I-T payments and hence, payment is no longer a troublesome exercise. However, completing the process before the last day should be the aim of individuals.