It is important to keep certain things in mind when filing past due tax returns. This is because this procedure is not a walk in the park. It is, of course, a daunting task to keep in mind all of the rules and regulations. Here is a guide to the difficult process of tax filing:
- Report Bank Accounts: It is mandatory for all taxpayers to report all of the bank accounts to the Income Tax Department. The necessary details are IFSC code, bank account number, and the type of account.
- To Carry Forward Losses: It is important that the losses incurred (Stock Market losses) be carried forward in a timely manner. This is important because it gives the filer the advantage of making it possible to carry forward his/her loss. Thus, timely filing past due tax returns is certainly advantageous to a stock market wizard investor!
- Reporting Foreign Assets: Even if you do not have any taxable income, you still have to report foreign assets and then tax returns should be filed on them. With all Governments tightening their noose around foreign assets, it is very important that all assets be disclosed Tax preparation.
- Section 80C: This section allows for expenses and investments. It is necessary to fill your 80C cup to the brim. In simple terms, what this means is that a deduction of 1.5 lakhs can be obtained from the total taxable income using this rule! For those people filing past due tax returns, it must be noted that for the year 2017-18 the deductible amount is still 1.5 lakhs!
- Forms to be filled: In an online system, the correct ITR form gets selected by the online procedure automatically. In case of the Government website, what’s important is to know which form is for you! If you have more than one house or have credited from shares…then you can’t file the ITR1 form. However, if you have more than one house, but have not gained from shares then the ITR 2A form is for you. It has to be additionally noted that the ITR 4S is much simpler than the ITR 4 form! This is considering you have income from a business or are a freelancer payroll outsourcing services.
- Tax Relief on Arrears and Form 10E: Under section 89(1) a person filing past due tax returns can opt for tax relief if he/she has received arrears/pension(s). This is claimed under the Income Tax Act, and it is mandatory to fill the Form 10E. If taxpayers are claiming relief but have not filled 10E, they will be given a non-compliance notice.
- E-Verification: Traditional process involved sending a signed copy of the ITR-V to CPC, Bangalore. It was a complicated and time-consuming process. In today’s digital age, it is possible for online checking via OTP via the Adhaar card linkage. This is the last but not the least step, and unless verified, the filing past due tax returns process may remain uncompleted!
- Upholding Standards: It is necessary to uphold professional standards, whenever the chance may arise. Professionalism defines the standard way of operation that is expected out of anyone. Here, the accounting and tax services personnel must keep in mind that not just their’s but the reputation of a lot of people is at stake here!