FREQUENTLY ASKED QUESTIONS

How do I figure out which ITR I need to file?

Different tax returns are recommended for filing by individual citizens relying upon their kind of revenue and private status. You can refer to our blog to determine the Return applicable for you: https://tobewrittenbyshefali/

1. What precautions should I need to take while filing the return of income?

• Track your details like PAN, permanent address, contact details, bank account details, and so forth are right in the pre-filled information.
• No document should be attached with ITR-1 but you should keep handy all the documents with you in case you need to present them during verification.
• You should identify the correct ITR for you to be filled i.e. ITR-1 to ITR-7. You should provide all the details like total income, deductions, interest, taxes collected or paid if any.
• Once you have e-filed, e-verify the return to ensure its correctness. If you want to manually verify your return, send a signed physical copy of ITR-V to CPC, Bengaluru within 120days.
• For transparency, download the 26AS form to check TDS and TCS or tax paid if any. If any issue arises, you can confirm it with your employer/tax deductor/bank.
• Carefully go through the documents required while filling the form like your bank passbooks, investment evidence, interest certificates, receipts to claim deductions or exemptions, contents of form 16 and form 26AS, etc.
• File the returns before the due date as the delay can charge you late filing fees, losses not getting forward, and other deductions and exemptions not available.

2. If I have selected a new regime in the last year can I switch to the Old regime or vice versa?

A person earning income from salary and having no income from Business and profession can pick between the old and new tax regimes every year by filing 101E every year to select the new tax regime.

An individual having income from business can switch tax regimes twice in his entire lifetime. First, to select a new tax regime and the second to select the old tax regime again.

NOTE: Income of Consultants and Freelancers are charged under profits and gains from business/ profession and thus, such individuals are not eligible to change their tax regimes every year.

3. My Income is over Rs.50 Lakhs, can I file ITR -1?

No ITR-1 cannot be filed in this case, you should file ITR-2.

4. Few common terms to understand.

• Assessee

An income tax assessee is an individual who pays tax or any amount of cash under the provisions of the Income Tax Act, 1961. The term ‘assessee’ covers every individual who has been assessed for his income, the income of someone else for which he is assessable, or the profit or loss he has sustained.

• Assessment year

The assessment year is the year that comes just after the financial year (FY). Both financial year (FY) and assessment year (AY) begins on the first of April and finishes on the 31st of March. The assessment year is the period where income acquired during a specific financial year is taxed and evaluated. For instance, thinking about the ongoing situation; for the period 1st April 2020 to 31st March 2021, the assessment year will be the following one that is from first April 2021 to 31st March 2022.

• Advance Tax

Advance tax is how much income tax ought to be paid in advance rather than a single amount installment at the year-end in portions according to the due dates given by the income tax division. Advance tax is otherwise called ‘pay as you earn’ tax and should be paid around the same time the income is received.

• Self-Assessment Tax

Self-assessment tax alludes to any balance tax that must be paid by an assessee on his assessed income after the TDS and advance tax have been considered before filing the return of income. The IT return can’t be submitted to the IT Department till the time the taxes have been paid. Toward the year’s end, assuming there is any tax that is forthcoming before filing the ITR there is a final amount that must be determined.

To lay it out plainly, Self-Assessment Tax is the balance tax that an assessee pays on the income that has been assessed, solely after taking into consideration the TDS as well as advance tax before the person files the returns of his income.

• Deductions

Tax deduction alludes to claims made to diminish your taxable income, emerging from different investments and costs caused by a taxpayer. Subsequently, income tax deduction lessens your general tax liability. It is a sort of tax benefit which assists you with saving tax. In any case, how much tax you can save relies upon the kind of tax benefit you claim.

• Return

Returns are filed to detail and report to the government regarding the income earned during the year. There are three types of returns: Original, revised, and belated.

• Original Return vs. Revised Return

5. Can I revise ITR-1 if I have filed already?

As per section 139(5) of the income tax act, any taxpayer can file a revised return if he discovers any wrong or omission in the return filed at any time before the end of the relevant assessment year or before the assessment order passed by the Income Tax Department, whichever is earlier.

Whoever has filed a belated tax return that is returns filed after the due date can also file a revised tax return.

6. There is no tax payable for me, should I still file my returns?

It is a most common understanding that if you are earning below 2.5lakhs then you do not have to file an income tax return. This is a total misunderstanding, instead of filing ITR even showing your taxable income as 0 can benefit you in long run. Following are the benefits that can be derived from filing ITR:

• For taking loans. As all the banks ask for a copy of tax returns with other documents.
• If you want to claim refunds from the Income-tax department, filing returns is important.
• Carry Forward Losses: The upside of filing ITR is that you can carry forward capital losses to eight progressive years promptly following your losses (in that specific year.) This way, every time you have capital gains, you can adjust the sum, and you will not need to pay taxes in the year you had capital losses. Without filing ITR, losses cannot be taken forward.
• Visa processing: During interviews for your visa, unfamiliar offices confirm your ITR receipts from the most recent few years. By showing ITR receipts, you affirm that you have an authentic type of revenue in India and are not intending to leave the country for good. In this way, while going to outside nations, specialists recommend that one must constantly convey ITR receipts.

7. Is putting in bank details mandatory?

To process your refunds, the income tax department requires at least one bank account. Therefore, the income tax department has made it mandatory for all the citizens to report all the bank accounts they possess which also includes joint accounts.

8. Do I need to attach proof for the deductions that I am claiming?

No, you do not need to attach any proofs for the deductions you are filing with returns. However, we suggest you keep those securely, in case you get an Income Tax notice, and the Assessing Officer calls for them. You should hold these verifications for 6years.