“The hardest thing in the world to understand is the income tax.” — Albert Einstein
It's that time of the year when the tension of filing one's IT returns can get to the sanest of us. In this blog post, I have attempted to bust the myth that tax filing is only for CAs!
The IT department has been one of the top adopters of technology in the otherwise decrepit government institutions. They have endeavoured to make filing as painless as possible. Till last year, one had to download an excel with macros and do a jugglery with generating an XML extract and uploading the same.
Introducing Quick E-Filing! This is the new method of filing income tax return without hassles. The caveat is that this is only available for ITR-1 people (income from salary and interest; sorry stock market punters!). Other category of users (with more varied sources of income) have to file using other ITR forms using the old excel based method).
To file income tax return through this method, log-in to your account (create one of you don't have; it's free!) with the income tax department https://incometaxindiaefiling.gov.in/e-Filing/UserLogin/LoginHome.html?nextPage=efile
The login screen looks like this. If you select option "From PAN Database", your personal details like name, address will get pre-populated from your PAN registration details. If you have filed online returns previously, select accordingly (also populates your previous salary etc.). If you are a newbie, use the third option.
If you have a digital signature, use the first option else if you want to sign manually, select the second.
- Once you submit, the instructions page will open up; you can read them once to understand the working of the site. The instructions provide guidelines on the significance of colour and the format of the dates.
- Please do not press the BACK button to goto any previous page. Use the ARROW buttons provided on the bottom of each tab to proceed or go back.
- Be careful not to press ENTER button as it will submit the form.
- The first tab captures your personal information. Most of the fields are compulsory. After filling in personal details, proceed to fill in the tax return category identification related fields. For a normal salaried individual like most of you, the status is INDIVIDUAL.
- The Income tax ward/circle is the one where your PAN is registered. You can know it by entering your details at https://incometaxindiaefiling.gov.in/e-Filing/Services/KnowYourPanLink.html
- Address field is meant to capture your address. It is pre-populated if you had used the option of using previous year's data during login.
- Filing status employer category is 'Others' for private individuals like most of us.
- Tax Status for salaried people is mostly Tax payable (hold on before you beat me up! We have to account for your interest income on you savings account or your FDs). We have to make this as 'Nil Tax Balance'. Select 'Tax Payable' for the time being.
- Residential status is RESident if you normally stay in India.
- Return filed under section is typically 11-Before due date if you are going to do this before Income Tax cut-off time of July 31. After due date typically entails payment of late penalty/interest too!
- Original/Revised is typically Original if you have not made mistakes in filing earlier.
- Portuguese civil code section is NO unless you live in Puducherry!
- We will not discuss revised returns assuming all of you are doing it correctly this first time itself.
Let us now go to the next tab of Income Details. Keep your Form-16 handy for reference.
- Income form Salary/Pension is the income chargeable under he head 'salaries' in your Form-16 (last page). You can also confirm the same by viewing your tax credit statements as For 26AS (TRACES website). Most companies also provide an extract of the same with the Form16. Keep in mind that this is the income BEFORE any exemptions. If you have other income form house/property, enter accordingly. Income from other sources are typically interest income from your savings account and interest on Fixed Deposits (If interest on FD is more than Rs. 10,000 then the bank itself deducts a TDS and gives you a certificate).
- Deduction section is where all your investments eligible for deductions will fall under. If you had already declared these in your company, your form 16 would already have them listed out. For example, Employee PF, ULIPs, LIC premium etc would fall under section 80C with a maximum exemption limit of Rs. 1 lac.Similarly other instruments would qualify under Section 80CCC/D etc. There are several sections for deductions and if you have any instrument that qualifies under these sections, then I assume you know the correct section to identify your exemption. Fill in the space for section 80G if you had made donations eligible for tax exemption (you will have to provide the proof in the 80G Tab). Fill in the exemption amount from your Form-16 (or accordingly if you had not declared earlier but the payment has been in the financial year, but you will have to send them physical proof of the same at the time of filing the return).
- The next section on Tax computation is auto-populated except if you have any penalty interest to pay.
Let us now go to the TDS tab. Again your Form-16 is needed.
- The first schedule is for your salary income. From our Form-16, get the TAN number (typically mentioned on the last page of the Form-16) of your employer and enter it. The income under head 'Salaries' goes next (the same amount as you had entered in income details tab). The tax deducted at source goes in next. This is also mentioned on your Form-16 under details of tax paid (typically the last page).
- The next schedule is for income other than salary. In typical IT people, it is generally when your bank has done a TDS for interest on your FD and you have the certificate to fill in the details. If not, it is left blank.
- The next schedule is for the Self assessment Tax. This is where you will pay the extra tax for your interest income or FD interest (if the bank has already not done a TDS). Look at your bank statement and get your total interest income for the financial year. You would have added this income to your 'income from other sources' in the income details tab. We will talk about how much and how to pay this additional tax after the next section.
Now we will go to the final (for most people) section where the numbers add up.
The schedule for Taxes paid adds up all the TDS and self assessment taxes you have paid (not many people pay advance tax or are not eligible). Based on your total income (salary+others) and the tax slabs, this has computed your total tax liability. The total tax paid by you is deducted and the balance is what you have to pay (or be refunded of you have already paid more tax). We have to aim to get this balance tax payable to 0.
Let us come back to the payment of additional taxes. The difference that showed up as Balance Tax payable is what you will need to pay as Self Assessment Tax. This can be paid online using the E-Pay tax link located on the left pane (quick links) of the e-filing website where you are currently on. Choose Non TDS/TCS ITNS 280 for payment of Income tax. Select 0021 Income Tax Other. Fill in your details, choose 300 Self Assessment tax as Type of Payment and perform this transaction using your Bank's Netbanking.
You will get a BSR Number, Date and Challan Number from your bank. Go back to the TDS tab and enter all these details in the Schedule for Advance/Self Assessment Tax. Now go back to your taxes paid and Verification Tab. Voila! You have fulfilled your tax payment obligations. The balance tax payable is 0 now. Enter the your bank details and unless you are using the services of a TRP (in which case you would not be reading this!), leave the remaining schedules blank.
Go back to your 'Personal Information' tab and get the pride of setting the tax Status as 'Nil Tax'.
Now click on Submit at the bottom and there you go! Your IT returns have been filed. Print the ITR copy and post it to the CPC cell as instructed.
© Bhawik Raja
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