If you’re but to file your earnings tax return (ITR), you’re reducing it moderately shut. The tax submitting deadline for the evaluation 12 months 2021-22, which has been revised twice, is 31 December. As of 27 December, 46.7 million ITRs for the present evaluation 12 months have been filed. Simply three days earlier than the deadline, that is far lower than the entire 73.8 million ITRs that had been filed for evaluation 12 months 2020-21.
Late-minute tax submitting runs the chance of incorrect submitting or defaulting on deadline. For one, chances are you’ll not collect all paperwork on time and miss reporting incomes. Or, on discovering a discrepancy between Kind 26AS and TDS types or between pre-filled info and the types accessible with you, there may not be sufficient time left to hunt a clarification from the earnings tax (IT) division earlier than the deadline.
The penalty for submitting a tax return after the deadline is ₹5,000 for taxpayers with whole earnings above ₹5 lakh and ₹1,000 for these with an earnings under this restrict. To not neglect the 1% month-to-month curiosity that must be paid on tax legal responsibility above ₹1 lakh after deducting TDS and advance tax paid.
To take the stress out of last-minute tax submitting, Mint lists out the most important adjustments in tax submitting launched for the present 12 months and the vital features to be careful for.
Adjustments in tax guidelines
Dividend earnings: Till final 12 months, solely dividend earnings above ₹10 lakh needed to be declared and was taxed at 10%. This 12 months onwards, this threshold is eliminated and dividend earnings shall be fully taxed at slab charges.
“Since all dividend earnings will now be taxable, the column for disclosure of dividend earnings beneath the exempt earnings schedule has been eliminated. Quarterly breakup of dividend earnings is to be given beneath ‘earnings from different sources’ head,” mentioned Shailesh Kumar, accomplice, Nangia & Co LLP.
Deductions accessible beneath new tax regime: That is the primary evaluation 12 months the place taxpayers have to decide on between new and previous tax regimes. The brand new regime forgoes 70 tax deductions and lowers tax legal responsibility for incomes between ₹5 lakh and ₹12.5 lakh. Nonetheless, the brand new regime nonetheless permits sure tax deductions.
One, you possibly can declare deduction on all the curiosity quantity paid on a house mortgage taken for a rented-out property, mentioned Karan Batra, founder, charteredclub.com. “The brand new regime does away with tax advantages on a house mortgage on a self-occupied property,” he mentioned.
Two, deduction on employer’s contribution in Nationwide Pension Scheme (NPS) beneath Part 80CCD (1B) is obtainable.
Three, the brand new regime has foregone deduction on contributions made in PPF and Sukanya Samriddhi Yojana, however the maturity proceeds and amassed curiosity from the 2 choices proceed to be tax exempt.
It needs to be famous that if a taxpayer with earnings from enterprise or occupation (consists of freelancers) opts for the brand new tax regime, she could have the choice to change again to the previous regime solely as soon as in her life. As soon as again to the previous tax regime, she can’t go for the brand new regime once more. However, salaried people and pensioners with no enterprise earnings can swap between the 2 regimes each evaluation 12 months. Kumar mentioned taxpayers choosing the brand new regime ought to file Kind 10-IE.
Reconcile AIS
Launched this 12 months, the Annual Info Assertion (AIS) incorporates particulars of all monetary transactions associated to investments, earnings and even expenditures executed in a monetary 12 months. It’s suggested to match info accessible in AIS with the TDS certificates, funding statements and financial institution statements accessible with you earlier than submitting tax returns as any mismatch shall be flagged by the tax division. Any error within the AIS needs to be reported to the tax division.
On condition that taxpayers have only some days earlier than the deadline, getting decision on errors in AIS might occur after the deadline.
On this case, the taxpayer mustn’t watch for the decision and file the tax return earlier than the due date, mentioned Ritesh Kumar, Accomplice, IndusLaw. “The taxpayer ought to file ITR throughout the prescribed deadline, which is able to enable them to revise the tax return in a state of affairs the place the decision asks for a revised tax return,” he mentioned.
“If the taxpayer thinks the knowledge talked about in AIS shouldn’t be right, then she might report the right knowledge within the ITR since there are excessive probabilities of error or mistake being rectified subsequently on a decision of the request. As there’s enough time for info in AIS to be rectified earlier than the abstract evaluation, it’s unlikely that abstract evaluation could also be made with out contemplating the rectified knowledge in AIS. In any case, an software for rectification of any order should still be made by the taxpayer thereafter,” mentioned Kumarmanglam Vijay, accomplice, JSA.
“In case the knowledge shouldn’t be corrected within the AIS, then mismatch could also be flagged by the earnings tax division and the taxpayer ought to preserve documentation supporting the knowledge furnished within the earnings tax return,” he added.
Supply: Live Mint