Your Guide To Filing I-T Return

Many changes have come about in income tax-filing rules, but digitisation has simplified the process


It’s that time of the year when individual taxpayers have to file their annual income tax return (ITR), the last date for submission being July 31. Various changes in tax returns were introduced in the Budget and ITR forms have accordingly changed. ITR filings have been increasingly getting digitised and user-friendly. Scores of taxpayers who were earlier reluctant to file ITRs on their own are now doing the process by themselves. Here’s all you need to know to be able to file your ITR on your own this year.



For assessment year 2019-20, you will be filing the ITR on the income earned during financial year 2018-19. All individual taxpayers are required to fill their ITRs electronically, except very senior citizens (above the age of 80), who also have the option of filing ITRs in hard copy format. Your Form 16 will have greater details of income, allowances and deductions, and it will be synced with the ITR form so that the form fetches these details automatically. This year, providing details of your salary income will be easier. However, this would be subject to detailed scrutiny from tax officers. Thoughtful changes have been made in TDS (tax deducted at source) returns, which would allow tax officials to cross-check the ITRs of salaried employees in the blink of an eye. Besides, you will also need to give a detailed break-up of interest earned from savings bank accounts, fixed deposits and income tax refunds. If any rent arrears have been received in FY 2018-19, you need to report them property-wise as received. You will also have to give greater details of capital gains if you sold equity shares, equity mutual funds or property. In case of sale of property, you will have to give complete details of the buyer. You also need to share other financial details as well. For ‘resident and ordinarily resident’ (ROR), the foreign bank account details have been re-framed to include information about foreign custodian, depository, equity and debt interest accounts.




Delaying your ITR can prove to be costly. If you file your ITR after July 31 but by December 31, then you may end up paying a penalty of up to Rs 5,000. If you delay further and file your return by March 31, 2020, the penalty will go up to Rs 10,000. However, if your taxable income is below Rs 5 lakh, the maximum penalty will be Rs 1,000. If you have unpaid taxes, you will have to pay a penal interest of 1 per cent for each month of delay. Any loss incurred (except house property loss) during the financial year will not be carried forward to future years, which earlier could have been forwarded up to eight assessment years.




The challenge faced by most individual taxpayers is in identifying the right ITR form for use


If you are salaried: A typical salaried person, without any other source of income, should file ITR-1 provided his income is less than Rs 50 lakh in FY 2018-19. Individuals with a salary income of more than Rs 50 lakh need to use form ITR-2 this year. Individuals who have one house property can use ITR1. If you have more than one house property, use ITR-2.


For those filing ITR-1, there is a change in the way the details are given. Individuals will have to provide details of allowances, such as House Rent Allowance (HRA), Leave Travel Allowance (LTA), exempted from tax partially or fully, separately in the return form. Also, deductions from salary income, such as standard deduction, entertainment allowance and professional tax, need to be separately furnished in the new ITR-1. Similar details have to be furnished in ITR-2 as well.


The new forms also require information on residential status in greater detail. ITR-1 can only be filled by a person who is an ROR in India. The new ITR-2 form asks individuals not only to specify the residential status as resident, ROR or nonresident, but also provide details of residential status, such as the number of days of stay in India in the relevant tax year and previous years.


There are cases in which you may not be eligible to file ITR-1. If you are a director in a company or have held unlisted equity shares at any time during the financial year, you cannot use ITR-1 form. ITR-2 or ITR-3 are the relevant forms for you in that case.


If you are self-employed: A self-employed individual will have to file ITR using the ITR-3 or ITR-4 form, depending on the type of income in FY 2018-19. A resident individual who has opted for presumptive taxation scheme under section 44AD or 44ADA of the Income Tax Act and has a total income of up to Rs 50 lakh can file ITR-4. Otherwise, he will have to file ITR using the ITR-3 form.




While filing ITR, make sure that the information you are providing is accurate. Form 26AS records all taxes deducted during a given financial year against your Permanent Account Number (PAN). Ensure that the details mentioned in this form match with your ITR, not only regarding the TDS amount but also income as discussed by the deductor. Before starting the tax-filing process, you have to make sure that all the receipts are readily available with you. While filing the return, you are not required to upload these documents, but do keep them in a file so that they can be produced if the tax authorities demand it for scrutiny. The income-tax department has decided to issue only e-refunds from March 1, 2019, which will be credited to taxpayers’ bank accounts linked with PAN. So if you want a timely refund without any hassle, you need to double-check your bank details linked to your PAN.




ITR-1 Sahaj: For individuals who are residents (other than not ordinarily resident) and have a total income of up to Rs 50 lakh, have income from salaries, one house property, other sources and agricultural income up to Rs 5,000


ITR-2: For individuals and Hindu Undivided Families (HUFs) not having income from profits and gains of business or profession. The form also applies to people with more than one house property and individuals with a salary income of over Rs 50 lakh annually


ITR-3: For individuals and HUFs having income from profits and gains of business or profession



ITR-4 Sugam: For individuals, HUFs and firms other than LLP (Limited Liability Partnership) who are residents, have a total annual income of up to Rs 50 lakh and income from business and profession, which is computed under sections 44AD, 44ADA or 44AE of the I-T Act