Income Tax Return filing or ITR filing as it is commonly called seems like a huge task to be accomplished. It need not be that way. In this post, we will be discussing the important steps which will simplify the process of ITR filing. We have also provided a list of ITRs so you will be able to understand which ITR you should be filing.
Firstly here is a list of things that will be useful at the time of ITR filing:
- Must have
- Contact details
- Bank details
- Basic information about income
- Good to have
- Form 16
- Form 26AS (Downloaded)
- Savings or investment details
- ITD account password
- If applicable
- Housing loan details
- Asset or liability details
Once you have these basic details in your hand the next step is to know which ITR will be applicable for your income.
|ITR||For whom it is applicable||For what incomes|
|ITR1||Individual/HUF||salaried income, single house property and other sources of income (Excluding casual income and income from horse races)|
|ITR2A||Individual/HUF||Salaried income, income from single or multiple house property, other sources of income and agricultural income exceeding Rs.5000|
|ITR2||Individual/HUF||Salaried income, income from single or multiple house property, other souces of income, agricultural income, capital gains, foreign assests and relief U/S 90, 90A, 91|
|ITR3||Individual/HUF||Salaried income, income from single or multiple house property, other souces of income and agricultural income, capital gains, foreign assests, relief U/S 90, 90A, 91 and Income from partnership firm|
|ITR4S||Individual/HUF||Salaried income, income from single house property, other source of income (Excluding casual income and income from horse races) and presumtive income|
|ITR4||Individual/HUF||Salaried income, income from house property (single or multiple), income from any of the other sources, capital gains, income from partnership firm, presumptive income, business/proffesional income, agricultural income, foreign assests and relief U/S 90, 90A, 91|
|ITR5||firms, LLPs (Limited liability partnership), AOPs (Association of persons) and BOIs (Body of Individuals) etc.||Any income from the business|
|ITR6||Companies claiming exemption under section 11||Any income from the business|
|ITR7||Trusts||Any income from the business|
Before you proceed to your ITR filing there are some things you should know:
- Difference between a financial year and an assessment year: Financial Year is the duration between 1st of April and 31st of March in which income is obtained. Assessment Year is the corresponding year in which the income from previous financial year is assessed and taxed. In simple terms, Financial Year is when you earn and Assessment year is when you file the tax return for what you have earned.
- Currently, we are in the assessment year AY 2016-17 and you will be filing your ITR for the previous financial year i.e, FY 2015-16.
- Form 16 and Form 26AS:
- Form 16 is the TDS certificate provided for salaried individuals by their employer for the tax deducted from their salary.
- Form 26AS also called as Annual statement contains all tax details associated with a particular PAN. It includes details such as TDS, TCS, Tax refunds, advanced tax, self-assessed tax details etc.
Tax saving details such as investments in insurance, mutual funds and donations have to be furnished at the time of ITR filing as well. The following are the various sections available in which investments are done:
- Deductions under Section 80C: A deduction of Rs. 1,50,000 can be claimed on your total income u/s 80C. This deduction is allowed to an Individual or a HUF.
- Investment in Public Provident Fund (PPF)
- Purchase of NSC
- Investment in Sukanya Samridhi accoun
- ULIPS or Unit Linked Insurance Plan
- Fixed deposit with a bank and many more
- Deductions under Section 80CCC: Deduction for Premium Paid for Annuity Plan of LIC or Other Insurer The deduction is allowed to an Individual for any amount paid or deposited in any annuity plan of LIC or any other insurer. The plan must be for receiving pension from a fund referred to in Section 10(23AAB). If the annuity is surrendered before the date of its maturity, the surrender value is taxable in the year of receipt.
- Deductions under Section 80CCD: Deduction for Contribution to Pension Account
- Employee’s contribution – Section 80CCD(1): Allowed to an Individual who makes deposits to his/her Pension account.
- Employer’s contribution – Section 80CCD(2): Deduction is allowed for employer’s contribution to employee’s pension account up to 10% of the salary of the employee.
- Deduction for self-contribution to NPS – Section 80CCD(1B): A new section 80CCD(1B) has been introduced for additional deduction for amount deposited by a taxpayer to their NPS account.
- Deductions under Section 80TTA: This section allows deduction from gross total income for Interest on Savings bank account. A deduction of maximum Rs. 10,000 can be claimed against interest income from a savings bank account.
- Deductions under Section 80GG: Deduction is allowed for House Rent Paid where HRA is not received as a salary head. Condition to claim this deduction are as below:
- Deduction can be claimed minimum of:
- Rent paid minus 10% of total income
- Rs. 2000/- per month
- 25% of total income
- Deduction can be claimed minimum of:
- Deduction under section 80EE: This Deduction is allowed on Home Loan Interest for First Time Home Owners. This section was revived in Budget 2016 and is applicable starting FY 2016-17.
- The value of the property purchased must be less than Rs. 50 Lakhs and home loan must be less than Rs. 35 lakhs.
- the Loan must be taken from a financial institution and must be sanctioned between 01.04.2016 to 31.03.2017. Under this section, an additional deduction of Rs. 50,000 can be claimed on home loan interest.
- This is in addition to deduction of Rs. 2,00,000 allowed under section 24 of the income tax act for a self-occupied house property.
- Deductions under section 80D: This deduction is allowed for premium paid for Medical Insurance. This deduction is available up to Rs. 25,000/- to a taxpayer for insurance of self, spouse and dependent children. If individual or spouse is more than 60 years old the deduction available is Rs. 30,000.
- Deductions under section 80U: This deduction is allowed for Person suffering from Physical Disability. A deduction of Rs. 75,000 is allowed for an individual who suffers from physical disability (including blindness) or mental retardation.
- In case of severe disability, deduction of Rs. 1,25,000 can be claimed. A Certificate should be obtained from a Govt. Doctor as specified in Rule 11D. This is a fixed deduction and not based on bills or expenses.
- Deduction under section 80G: The deduction claimed for donations towards Social Causes is under this section. The various donations specified in Sec. 80G are eligible for deduction up to either 100% or 50% with or without restriction as provided in Sec. 80G. Sec. 80G deduction is not applicable in case donation is done in form of cash for amount over Rs. 10,000.
If you want to read complete information regarding the various deductions applicable under chapter VIA then read this PDF.
So these are some of the basic information regarding the filing of ITR.