Tying up loose ends after filing your income tax returns
(Any opinions expressed here are those of the author and not of Thomson Reuters)
There was a record increase in tax returns filed electronically this year after new rules made it mandatory for taxpayers with a taxable income of more than 500,000 rupees to file returns online. This change added to the last-minute rush, with the government extending the deadline by five days to Aug. 5.
SUBMISSION OF ITR-V
Do not forget to mail your signed ITR-V acknowledgment form to the Central Processing Centre (CPC) in Bangalore within 120 days of filing your return, else it shall be treated as if you never filed it. Check the ITR-V status online. If it has not been received, you have to send it again within the same time period. The tax filing process is completed only once your ITR-V reaches the CPS.
FILE RETURN EVEN IF YOU MISSED DEADLINE
If you still havenâ€™t filed your tax return for 2012-13, no need to panic as long as the taxes have been paid. There will be no penalty if the return is filed before March 31, 2014. Missing that deadline may cost you 5,000 rupees. But if there are unpaid taxes left, you need to rush as interest will be charged till the time you pay those taxes.
REVISION OF TAX RETURN
If you notice any error in your tax return, revise it immediately. Revisions are possible within a year from the end of the financial year in which you filed the return or before it is assessed by tax authorities, whichever is earlier (for example, returns filed for the year 2012-13 can be revised up to March 31, 2015). You need to be extra careful while filing returns after the due date, as these cannot be revised later.
Although documents are not attached with tax returns, itâ€™s important to preserve them. These include Form 16 (if you are a salaried employee) or Form 16A, a copy of bank statements (note down details of deposits and withdrawals), proofs of exemptions or deductions claimed. If you have reported foreign assets, preserve the documents and sources for them as well.
TIME LIMIT FOR AUDITS
Under existing rules, returns can be picked up for audit within six months from the end of the financial year in which the return was filed (for example, returns filed within July 31, 2013 can be picked up for an audit up to September 30, 2014). But in cases of income concealment, authorities can audit returns over the last six years, and a period of 16 years of overseas assets are involved.
WEALTH TAX FILING
Review your assets to ensure you did not miss out on filing wealth tax. This tax is levied at the rate of 1 percent if the individual has net taxable wealth exceeding 3 million rupees. Taxable wealth includes cash in hand in excess of 50,000 rupees, jewellery, motor cars, houses or land. Any money borrowed to acquire these assets is deductible from taxable wealth. Also, a residential house or a plot up to 500 square metres and a house rented out for more than 300 days are excluded from taxable income.