Income Tax Return Filing – 7 Formulas for Error Free and easy filings

The Income Tax Return Filing season is upon us. Businessmen, professionals as well as Individual tax payers are starting to worry about their tax returns, as the due date for the tax returns for financial year 2011-12 (AY 2012-13) i.e. 31^st July 2012 nears.

Our experience suggests that this worry is caused due to improper planning and ignorance. The idea behind this article is to bring things into perspective, eliminating worry with brining-in more awareness about filing the tax returns.

7 key pointers for online Tax Return Filing to make filing error free and easy.

First collate all documents and details – Here is the list of documents one should be ready with before filing his tax returns.

1. Collect your Form 16 / Form 12BA from your current employer or previous employer in case of change of employment if any
2. TDS Certificates or Form 16A for self employed & professional:
3. Get Updated Bank statements of all the accounts;
4. Statement of transaction of Mutual Funds, Shares & Stocks and Property if any;
5. Full details of the Loan of House or Vehicle if any;
6. Proof of investments and expenses to claim deduction;
7. Advance tax challan and self assessment tax challan, if any;
8. Donation receipt, if any, to claim tax benefit;
9. Rental Income receipt, if any.

Next, Do a Tax Computation and pay due taxes, if any – ideally this exercise should be undertaken in the month of March, to know exact amount of total income and tax liability thereon. As in the month of March, as you are aware of the TDS deducted by the employer during the financial year and if there is short deduction of TDS then the additional tax liability should be paid within the financial year to avoid penal interest.

Third, please check tax credits in Form 26AS statement on the income tax website, before you upload your tax returns- as it ensures correct credit for the tax paid or deducted. Form 26AS contains details of TDS, Advance tax /self assessment tax /regular assessment tax and one should always check Form 26AS, infact periodically as it helps to take corrective measures if needed.

Select appropriate Income Tax Return Form applicable to you– based on nature of income. There are basically seven kinds of tax return filing forms released by the tax department based on different nature of income for different assessees.

Fill your Income Tax return Form Properly- providing all the details of income and investments. Missing tax investment deductions can make you pay unnecessary taxes. Claiming correct deductions ensures lesser amount of taxes.

In addition to above, one needs to provide all other basic details correctly as we have experienced from our experience that taxpayer’s often ignore to verify correctness of their basic details which leads to incorrect processing of return and delay in refund. Here are the some of basic details which one should verify before filing tax returns to ensure seamless processing of returns at the Income Tax Department and speedy issue of refunds.

1. Personal details like address, PAN number, date of birth;
2. Jurisdiction of Assessing Office;
3. Updated e-mail address as communications are now done via mail by the income tax department;
4. Bank account details with account number and MICR Code;
5. Validated TAN number of the Employer.

Generate xml and upload – After filling all the details in Income tax return Form, generate xml file, register and create a user Id & password in the income tax website then Login and Upload the xml file generated. Upon, successful uploading of the xml file, Income Tax Return Verification Form (ITR V) will be generated and if you have filed the Income Tax Return with digital signature then ITR Acknowledgement will be generated.

Wait, its not over, the process doesn’t end here, after that ITR V Form needs to be printed, signed and posted to Centralised Processing Centre at Bangalore within 120 days of uploading the same electronically. But, in case the ITR was filed with digital signature then there is no need to submit ITR Acknowledgement to the CPC, Bangalore.

This is it for today, for more on tax return filing, please feel free to visit Taxmantra.com . Tax Return Filing is hassle free with us