Seven key things to know before filing income tax return (ITR) for FY21

 







The last date to file income tax return for the financial year 2020-21 has been extended to September 30, 2021. Although there is more than two months left for the deadline to end, it is always recommended to complete the task as soon as possible and not to wait for the last minute. Worth mentioning here is that the income tax department last month launched a new e-filing portal (www.incometax.gov.in) to speed up the processing of tax returns. The I-T department will soon launch a mobile application, having all the features of the new portal. This year taxpayers have to take care of the following changes in the ITR filing process.

1) A new utility named JSON has been launched for filing tax return forms for FY21. At present, only three forms, ITR 1, 2 and 4 have been released. These new forms will import pre-fill data such as personal details, salary income, dividend income, interest income, capital gains and all the information available in Form 26AS.

2) Taxpayers will have the option to choose from the old and new tax regimes while filing tax return. Salaried taxpayers can also change the regime, which they have already declared to their employer at the time of filing ITR.

3) Before filing the ITR, collate all the relevant information and documents required for filing the tax return and reconcile all sources of income with the data shown in the pre-filled ITR form. This will ensure seamless processing of tax return.

"Its important that you have all the necessary documents like a form 16, 26AS, bank statements, rent receipts, investment proofs, donation receipts etc when filing the tax returns. Also one must start the process in time to ensure that the timelines are met for filing," said Aarti Raote, Partner, Deloitte India.

4) Before filing return, calculate your tax liability if any, and pay in advance within the due dates to avoid levy of interest applicable on delayed tax payments.

5) Use the correct tax return form based on your sources of income. Using a wrong tax return form may lead to a defective return notice from the tax department.

"When filing the tax return one must be careful to select the right tax form. For example, ITR 1 is applicable to only those taxpayers having income from salaries, one house property and other sources. This form cannot be used where the individual taxpayer has income from capital gains," said Raote.

If a taxpayer misses the extended deadline for filing ITR, then he can file a belated return before December 31, which has recently been extended to 31 January 2022. But in this case, a late fee of Rs 5000 will be applicable along with interest on tax due amount. Worth mentioning here is that CBDT has clarified that the due date for filing the tax return shall not absolve the taxpayer from paying tax before the original return filing date. Any delay in tax payments beyond the original date of ITR filing will attract additional interest.

7) The CBDT has, however, provided relief from levy of interest if self-assessment tax payable by a taxpayer does not exceed Rs 1 lakh. This relief is also available for resident senior citizens not carrying on business or profession.



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