Remember July 31?

Riken Mehta
Wednesday, 11 July 2018

A step-by-step guide to filing your returns

You can file your income tax returns without a Form 16 

The deadline for filing income tax returns (ITR) — July 31 — is fast approaching and most of you will be scouting to get your Form 16s from your existing employer or from an old employer if you have switched jobs in the previous financial year. If you manage to gather your Form 16, it’s great, but if that activity has proved to be futile, you can still file your ITR. 

Guide to filing your Income Tax Return in absence of Form 16
The first step is to collect all your salary slips of the last financial year (April 2017 to March 2018). Calculate your gross salary for the entire year. If you receive any allowance from the company, deduct that from your gross salary. Examples of allowances are conveyance, food coupons, fuel allowance, child education, etc.  

The cap for transport allowance is Rs 19,200 while that for medical allowance is Rs 15,000. One should make a note that from financial year 2018-19 (AY 2019-20), you will be able to take the benefit of the standard deduction of Rs 40,000 instead of the existing transport allowance and medical expense reimbursement.

After deducting your allowances, you can deduct House Rent Allowance (HRA) from your gross salary to save tax. Ensure you read up on the criteria to be fulfilled for claiming your HRA.

Under Section 80C of the Income Tax Act, you can further reduce your net taxable salary by Rs 1.5 lakh if you have invested in any of the tax-saving instruments specified under this section. An additional benefit of Rs 50,000 can also be availed under Section 80CCD (1b) if you have subscribed to the National Pension Scheme. 

Premium paid towards health insurance can be claimed up to Rs 25,000 for self and family. An additional deduction of Rs 25,000 can be claimed for insurance towards parents if their age is below 60 years and Rs 30,000 for parents above 60 years. There are other sections as well where one can claim tax deduction on interest paid towards education and home loan.

After all your deductions are made, you can derive the net taxable salary and the income tax to be paid. This figure can be verified with Form 26AS and if there is any shortfall/excess, one can pay/claim refund on it. 
Once you have paid/claimed refund, they you can e-file your tax returns without Form 16.

After filing your ITR, you need to get your ITR-V (return filing acknowledgement) verified. Previously, it was mandatory for taxpayers to send the physical copy of the duly-signed ITR-V to Income Tax Department in Bengaluru within 120 days of e-filing income tax return. Now, taxpayers can e-verify it in minutes in five different ways as explained here.

How to e-verify ITR? 
Once your return is filed, it needs to be verified digitally by generating an Electronic Verification Code (EVC) which is a 10-digit alphanumeric code and unique to each PAN number. If you are filing a revised return, then you need to generate another EVC as only one online ITR can be verified on one EVC code. After verifying your return via EVC, you are no longer required to send the physical ITR-V to CPC Centre, Bengaluru. There are 5 ways to do e-verification.

E-verification through Net Banking, Aadhaar OTP
First way is to log in to your primary bank account via net banking and then selecting e-verify option which will take you to the government e-filing portal to generate EVC. The EVC will be sent on your registered email ID and mobile number. 

The second way of e-verifying it is by using Aadhaar OTP which will be sent on the mobile number registered with your Aadhaar card.

Government e-filing portal, bank’s ATM and demat account are the other three ways through which e-verification can be done.

Hope this eases your tax filing journey. Make sure you file your returns before the July 31 deadline in order to avoid late payment fine of up to Rs 10,000 besides interest.

(Riken Mehta is an independent financial consultant with over 10 years of experience in the finance industry)

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