The Indian tax system is a compliance-oriented tax system. Which means, after completion of a financial year, a person who has earned any income (i.e Salary | House Property| Business and Profession | Capital Gains |Other Income), must file an Income-tax return to declare such income and assets. Such a compliance is necessary so that the Government could assess whether you have paid the right level of taxes corresponding to the income earned.
While the return season is around the corner, we highlight 5 top points that need to be ensured by every person filing the return:
- Respect the due date: The due dates for filing of return could vary depending on the class of person you are for example individual, company, firm etc. It is a good practice to file returns 15 days prior to the due date. Regular year on practice to file returns before the due dates keep you in good books of tax authorities and financial institutions.
- Belated return just got shortened: There was an option for the taxpayers to file the return as belated returns until 2 years from the end of the financial year. The same has got reduced to 1 year now. This means for FY 2017-18, no return could be filed after 31 March 2019.
- Refunds: You can claim your excess tax deductions, as refunds, only when you file the return of income. There is no other way.
- Take real positions: Do not take unnecessary aggressive positions in the Income-tax to claim refunds or losses. If any position is taken, document the rationale behind the same. It would help you if the case is selected in scrutiny. The PAN connectivity and AADHAR linkages assist the tax department to keep track of your transactions.
- Get Professional help: If your income is higher than the average income in your fraternity, it is important that you engage a professional (online or offline) to address the tax declarations. You should consider this as an investment to mitigate future tax risk.
In case you need any more information on the tax declarations (return of income), you can get in touch on the mail below.
CA. Akshay Kenkre