Saturday, August 17, 2013

Filing income tax returns in 8 easy steps

If you earn above Rs 5 lakh, you have to file returns electronically this year. That means you can file your returns even in the last two days from your home computer. You can seek the help of a professional or do it yourself by using the official website of the Income-Tax department or a host of private websites.

Before we proceed to how to use these portals effectively , let us address a major source of ambiguity this year regarding the applicability of forms ITR-1 and ITR-2 to salaried individuals or pensioners with one house property and interest income. Tax consultants are divided on the interpretation of new provision on exempt income , introduced this year.

According to this provision, those with exempt income exceeding Rs 5,000 cannot file their return using ITR-1 (Sahaj). While some feel that all salaried individuals who have tax-exempt income like House Rent Allowance (HRA), Leave Travel Allowance (LTA) and transport allowance have to use ITR-2 this year, others argue that they can continue to use the much simpler ITR-1 (Sahaj).
Filing Tax Return
Before you start the process, keep your bank statements, Form 16 issued by your employer and a copy of last year's return at hand. Next, log on to www.incometaxindiaefiling .gov.in. Follow these steps:

Step One

Register yourself on the website. Your Permanent Account Number (PAN) will be your user ID.

Step Two

View your tax credit statement  Form 26AS  for the financial year 2012-13 . The statement will reflect the taxes deducted by your employer actually deposited with the I-T department. The TDS as per your Form 16 must tally with the figures in Form 26AS. If you file the return despite discrepancies, if any, you could get a notice from the I-T department later.

Step Three

Under the 'Download' menu, click on Income Tax Return Forms and choose AY 2013-14 (for financial year 2012-13 ). Download the Income Tax Return (ITR) form applicable to you. If your exempt income exceeds Rs 5,000, the appropriate form will be ITR-2 . If the applicable form is ITR-1 or ITR 4S, you can complete the process on the portal itself, by using the 'Quick e-file ITR' link.

Step Four

Open the downloaded Return Preparation Software (excel utility) and complete the form by entering all the details , using your Form 16.

Step Five

Ascertain the tax payable by clicking the 'Calculate Tax' tab. Pay tax (if applicable) and enter the challan details in the tax return.

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