Myths about Income Tax Return Filing, Best Taxsaving Plans In india, best financial Planing in india,
Myths about Income Tax Return Filing, Best Taxsaving Plans In india, best financial Planing in india,

Many myths prevail pertaining to Income tax filing leading to wrong filing of the same. Some such myths are enlisted below for clarity of all Income Tax Return filers.

Myth 1

If the Annual salary of a person does not exceed 5 Lakhs, it is not necessary to file Income Tax Return.

It is true that prior to assessment years 2013-2014, the Income Tax Department had given an exemption from filing Income Tax returns if the annual income of a person did not exceed 5 Lakhs. Another exemption provided during the above said assessment year was Interest earned on Savings when it did not exceed Rs. 10,000/- The current practice insisted by the Income Tax Department is to file Income Tax Returns even if the total taxable income per year is less than 5 Lakhs.

Myth 2

Individuals Assessees need not file Tax returns separately since the Employer deducts tax from the salary and remits it to the Tax Department

Salaried class individuals must understand the basic difference between Paying Income Tax and filing Income Tax return. Filing Income Tax Return encompasses all heads of income that comprise the annual incomes. Payment of Income Tax by the Employer includes only the salary the individuals earns form the organization and the details he provides to the Employer pertaining to Tax savings. This means, even if the Employers remits tax in the Assessees Tax account to the Income Tax Department in a periodical manner, individuals Assessees must file return. He can adhere to Taxation rules by paying advance tax at the beginning of the Fiscal year and filing Income Tax returns at the end of the period.

Myth 3

When I miss to file my Income Tax return by the stipulated date announced by the Income Tax Department, I cannot pay it later

This is not true. If you have missed to file your Income Tax returns by the due date announced by the Income Tax Department, you can still file the same later. Under Section 139(4) of Income Tax Act, Tax Assessees can file their Income Tax returns beyond the filing date announced by the Department. If the Assessee who files Income Tax Returns in a belated manner has tax to be remitted for the fiscal year, 1% penalty charges will be laid on the actual amount to be paid for every month of delay.

Myth 4

Digital signature is a must for filing Income Tax returns online

This is false. Even those without a Digital Signature can file E Returns but ensure to submit the filled ITR V duly signed with 120 days of E Filing. Many people misunderstand this fact and so opt to continue with their old time practice of manual filing. Take the advice of your Tax Consultant who will guide you through the process of creating your Digital Signature.

Myth 5

As soon as I complete my e Filing process, Income Tax returns filing process gets over. I need not do anything else towards the same.

E Filing of Income Tax Returns can be done in two ways. One is with Digital Signature and the second way is without Digital Signature. When you file Income Tax returns online with Digital Signature, the filing process ends there. However, when you file Income Tax Returns online without Digital Signature, there is one more activity that needs to be carried out to make the filing process complete. After E Filing Income Tax Returns without Digital Signature, ensure you fill in the ITR V Form. Sign in the appropriate column provided for the same and send the same through Speed Post to the Income Tax Department or everify the Return. This must be done within 120 days from the date of E Filing, failing which the same will be considered void and be rejected.

Myth 6

Failure to provide proof of investments to the Employer closes the door permanently to claim deductions on the investments made by Assessees.

Form 16 is never the end of the world. You can attach the proof for your investments when you file your Income Tax returns online if you fail to submit proof of investments to your Employer. If the tax deducted earlier without taking into consideration your proof of investment is higher than the actual tax due after considering the investments, the same can be claimed as refund. You are eligible to get back the excess amounts of tax deducted from your income as refund. 

Myth 7

The tax already deducted from source can never be recovered at any point of time later.

This is not true. Any tax deducted at source is calculated based on the source and proof of investment as produced by the Income Tax Assessee. However, there may be situations that you never fall in to the tax bracket owing to the investments you have made and missed to produce proof of investment. In such cases, the excess amount deducted without taking into consideration the proof of investment can still be received back in the form of refund. When you file your Income Tax Return online or manually, you can specify the excess tax amount deducted at source in the Refund column available for the purpose and claim the same.

Myth 8

Manual filing is safer than E Filing

Many people think that manual filing is safer than E Filing. This is not true. When you file your Income Tax returns online, your details reach the concerned computer in the Income Tax Department safely. Income Tax Department has a fool proof application which cannot be hacked by the best of technical brains

Myth 9

Errors made in Income Tax Returns Filing cannot be revised later

This is not a fact. It is absolutely common for many Income Tax Assessees to miss out on some heads which may result in wrong filing of returns. Such faults may lead to excess payment of tax which is not a huge problem since refund can be claimed towards the excess amount deducted. If the tax filed is lesser than the actual taxable amount post recalculation of the same, then the Assessee must ensure that the shortfall amount is immediately highlighted by filing a revised return before 31st of July the following year for the completed fiscal year.

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