FILE YOUR IT RETURN
AS THE Income tax return season is approaching fast, it is the time when the tax payer should become diligent and get the necessary documents ready for filing the income tax return. The deadline to file the income tax return for the financial year 2017-18 is 31 July. The cut-off date becomes more critical this year onwards as filing of the income-tax return beyond this date would attract mandatory levy of penalty, which can go upto Rs 10,000. Timely filing of the income tax return further facilitates the scope for revising the return in case any error gets encountered later. Many times salaried taxpayer ends up paying more taxes by way of excess deduction of TDS. Filing the income-tax return beyond the due date would result in loss of interest of income tax refund in such cases.
Introduction of additional penalty for delay in filing the return is a result of the government becoming more stringent towards income-tax compliance to regularise the system of direct taxation in India. Its vigilance towards the tax evader has increased the disclosure requirement for the salaried taxpayer this year by widening the scope of Income Tax Return (ITR) forms.
India earns major portion of its taxes from its salaried class population. In Budget 2017, finance minister reported that out of the 76 lakh individual assessees who declared income above Rs. 5 lakh for the year 201516, 56 lakh were salaried class. In spite of sincerity of the salaried class towards its income-tax compliances, the government is acting proactively to identify the salaried tax evaders who strive to save taxes on their salary income by illegal means.
Unevenness in the taxation system which burdened the salaried class lured such tax payers to adopt the various unlawful measures to avoid payment of taxes. Many taxpayers resorted to furnishing false claim like HRA, medical expenses, 80C deductions, not reporting interest income and income from different employers etc. These malpractices made the government more vigilant and resultantly increased the disclosure requirement to ensure the adherence of law while filing the income tax return.
The government going digital desires to capitulate the maximum data through its electronic ITR forms to keep a close eye on the salaried tax evaders. Tax payers would now be required to provide the breakup of salary such as taxable allowances, value of perquisites, deduction for professional tax etc., and details of income from house property such as gross rent received, tax paid on property, interest payable etc. With this wide range data in hand, the incometax department will have more clarity regarding the computation of tax liability.
In contrast to last year’s ITR form, the tax payer would be required to furnish the PAN of the tenant while claiming the HRA exemption. This requirement was optional till last year. Despite the fact that salaried taxpayers are one of the major contributor in the government’s kitty, the government is making an attempt to not spare the exceptional tax payers in the said class.
The revenue department has already warned the salaried tax payer against furnishing the wrong or false claim in order to seek tax refund. It clearly mentioned that the defaulting tax payer would be liable to penalty and prosecution. Advisory was issued to inform the tax payer not to fall prey to false promises or illadvice by unscrupulous intermediaries and submit wrong claims in their ITRs, which would be treated as cases of tax evasion. The government has become cautious towards the salaried class tax evaders. To avoid the hassles, it becomes all the more important to timely file the income tax return to prevent any last minute rush.
Preparation would require discharge of tax liability, if any, and compilation of different documents to furnish the information in the income tax return. Basis the information contained in various documents like Form 26AS, Form 16, housing loan certificates, investment proofs and bank statements, one must proceed to calculate the tax and pay the liability. The government through Budget 2018 has provided relief to the salaried tax payer in the form of a standard deduction of Rs. 40,000 in lieu of transport and medical allowances. Income tax compliances hold utmost important for the government and no defaulting tax payer would be excused.