eFiling Income Tax

Income Tax Filing in India for a Hassle-Free New Year

As the New Year gradually unfolds its magic on the people of the nation, a fresh set of rules, regulations and income tax guidelines pave way for an easier, more convenient financial year 2018. As we carefully tread forward to the first month of the year, it almost seems like a painful reminder to file income tax returns for the year. Income tax in India comes with its own set of hurdles and hassles, although if taken care of in a timely manner, one can easily avoid additional tax payments in the future.

Income tax efiling is basically filing income tax returns on an online portal that encompasses all documents, and is therefore relatively more convenient than manual filing. Timely income tax efiling in India ensures that one accounts for incomes that might not be subjected to tax, in the future. A year old stock investment can be proposed as an example in such a scenario.

Ways Through Which One Can File Income Tax Returns

• Manual Filing : A traditional procedure, wherein you visit the branch and file your returns. This process, evidently requires your physical presence.

• Digital Signature : Ensuring that you don’t have to be physically present at the venue, this procedure involves using an e-signature on an e-form. Quick and convenient.

• Intermediaries : This procedure includes the participation of a third-party entity that helps you file your returns. A small firm, a chartered accountant or an agent helps you file your returns and submit the same at the required window.

• E-filing : If an e-signature (digital signature) is nonexistent in a certain scenario, you may complete the e-filing process online and generate a single page receipt cum verification form. Subsequently, you need to sign and submit the said form to the income tax office. To avoid the many hassles of Income tax in India, a high proportion of the nation have started using the e-filing facility to file their income tax returns.

Attributes Surrounding Income Tax in India

• Forms Are More Comprehensible : New times, new changes. With the commencement of the new year, Income tax authorities have made slightly different, yet life-altering changes to the form. Introduction of a one-page ITR form makes it easy for individuals earning upto Rs.50 lakh and owning a single house property to file returns without a hitch. Multiple ITR forms (ITR-1, ITR-2, ITR-3) have all been amalgamated to form a single ITR-2. The new year also makes it mandatory for all individuals filing tax returns to provide the 12-digit Aadhaar number. In case of an absence of Aadhaar card, it is important to show the enrolment ID.

• Income Tax Filing has Become a Mandate : Income tax laws of the recent times clearly make it mandatory for any and every individual to file tax returns, provided their income is above the basic exemption limit. Moreover, a person who can easily be qualified as an ordinarily resident of India under tax laws, has to file his/her returns. Furthermore, the person has to meet with any one of the two conditions before filing his return. One, if he holds an asset, either as a nominee or otherwise or if he holds a signing authority anywhere outside India. Two, if anywhere outside India he acts as a beneficiary for a financial asset or interest.

• Benefits have Increased in Number : Not only do the tax laws demand a timely filing of income tax returns, but an individual also stands to benefit in a huge way, from doing so. Applying for housing, education or vehicle loans are rendered easy, and your application is processed smoothly, if you have been filing your tax returns on time. Banks often hesitate to issue credit cards if the history of filing tax returns is distorted in any way. You may also find it difficult to apply for visa, if you have not been filing your returns regularly. By filing returns on time, you are essentially creating a brilliant track record with the income tax department. This in turn helps you obtain a loan in a hassle-free manner. Your returns can also be frequently used as standard proofs of income (whenever required).

Repercussions of Not Filing Returns on Time

Income tax in India is a concept often greatly misunderstood by its people. Not complying with tax rules could land you in grave troubles, including penalising. The Union Budget, last year, proposed a certain amount chargeable to individuals filing their returns late. If a person files their return after the due date but before December 31st, an amount of Rs.5000 is charged. For any other scenario, the fee amount shoots up to Rs. 10,000. For individuals earning less than Rs. 5 lakh a year, the standard fee is Rs. 1000. Therefore, it is of critical importance that you start collating all the required data and fulfill the necessary obligation by July 31st, following the end of the financial year.