How to e-file Income Tax Return (ITR) for FY2018-19
The Income Tax Act, 1961 mandates the filing of an income tax return (ITR) for each financial year from 1st April to 31st March by an assessee, under certain situations. The income tax return facilitates an assessee to report income under various heads like salary, profits and gain from business and profession, other sources, capital gains and house property. Additionally, the return as a form, enables carry forward of losses, refund claim, allowance of expenditure as eligible deductions, declare exempted incomes, investments and compute tax liability etc.  
 
The income tax (I-T) department provides convenient electronic or e-filing facility with paper filing being allowed only for certain eligible assessees. The following are the broad steps involved in e- filing the Income Tax return. 
 
1. Determine the income, the income tax payable, the eligible deductions with necessary supporting documents
 
The assessee needs to be aware of the tax provisions and recent amendments applicable to his/her income, the income classification, the suitable ITR and the available deductions as per the Budget clauses for the relevant Assessment year. It would be useful to collect the necessary documents to validate the entries and ensure completeness of the information in the ITR. Broadly the following documents may be kept handy: 
  • Permanent account number (PAN) card
  • Form 16 and Form 16A
  • Tax deducted at source (TDS) certificates
  • Details of investments eligible for deduction under ChVI-A
  • Home loan documents
  • Form 26AS 
  • Details of asset and liabilities in case of income exceeding Rs50 lakh
  • Other documents depending on the heads of income
 
2. Creation of online e-filing account
 
It is mandatory to have an account created with the income tax e-filing portal www.incometaxindiaefiling.gov.in in order to e-file one’s ITR. Thus, one needs to obtain a login (PAN is the login id) and password. First-time filers need to sign up and create a login using their PAN, Aadhaar number, mobile number and address.
 
3. Compute TDS from certificates and match entries with Form 26AS
 
To ensure smooth processing of the IT return, the IT Department has facilitated the form 26AS facility, whereby the assessee can check the TDS deducted during the financial year and report any discrepancies. After summarising the TDS amount from the TDS certificates obtained for the four quarters of the financial year, one can compare with the entries in the Form 26 AS. One can refer the Form 26 AS from the I-T e-filing portal by logging in with one’s credentials.
 
4. Selection of the applicable ITR and ITR preparation
 
The Income tax authorities allow online and offline mode of filing I-T returns. However, offline mode is permitted only for ITR 1 and ITR4S, not for other ITR categories.  
 
The ITR preparation software can be downloaded from the income tax website, which is available as an offline utility. The utility can be used to compute the final tax liability or refund claim. The assessee needs to enter relevant details in the green cells in the utility. 
 
The white cells with red colour text need to be mandatorily filled in. 
 
 
The income tax i.e. self-assessment tax may be paid online, and the challan details filled in the IT form. The IT return data may then be converted into XML format by clicking on validate and then Generate XML and saved to be uploaded in the Income Tax e-filing portal. 
 
5. e-filing of the IT return Uploading of the XML of the income tax return and filing
 
After generation of the XML format of ITR, the assessee can log into the e-filing portal.
 
Upon clicking on the e-file tab and selecting the Income Tax return option, the assessee would have to complete details of Assessment year, ITR form type and mode of submission.
 
 
After attaching the ITR XML file, the assessee needs to hit submit. One may choose to mode to verify the return, which may be done immediately or at a later point of time, before the due date of filing the IT return. 
 
Filing Income Tax return is the responsibility of every citizen whose cumulative annual income from various sources i.e. salary, house property, capital gains, business or profession and other sources is above the slab limit. 
 
The direct taxes are used for nation building activities and there is a notice served and penalty payable in case of failing to file the Income Tax return. 
 
Additionally, the IT return also serves to disclose the source of income and its associated legality. Further, being a mandatory requirement, filing IT return helps obtain loans and in registration of immovable property by being a legitimate income proof.
 
It is prudent to file one’s IT return before the due date (31st July for individuals for FY18-19) to avoid falling on the wrong side of law and to enjoy peace of mind!
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    KPR Mills withdraw share buyback proposal due to 20% proposed tax
    Garment exporter, KPR Mills on Friday became the first company to have withdrawn its buyback proposal due to the 20 per cent tax proposed on buyback obligations in the Finance Bill.
     
    The company had proposed a buyback offer( one of the preferred ways of paying share-holders as against dividends) of up to 37,50,784 equity shares.
     
    The buyback route would help companies avoid dividend distribution tax (DDT) until recently when an additional tax of 20 per cent in case of buyback of shares by listed companies was proposed in the Finance Bill.
     
    "We hereby inform you that we have today (Friday) filed with SEBI our communication conveying that the increase in the amount of buyback obligation due to the tax proposal in the Finance Bill 2019 was neither contemplated nor prevailing at the time of the consideration and the approvals of the Board and Shareholders," the company said in a BSE filing.
     
    "We are not permitted to meet the buyback obligations beyond the amount approved by the Board of Directors and Shareholders of the Company and the same can also be effected only with the borrowed funds, which is prohibited by law. In the above circumstance, we are unable to file the 'Letter of Offer ' and go forward with the proposal, which has been intimated to SEBI," KPR Mills added.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    Budget extends tax on NRIs for receiving gifts from resident Indians
    The expensive gift that you kept for your overseas cousin or friend may attract tax from this year with the Budget 2019-20 proposing to impose withholding tax all such transfers, plugging an earlier loophole that allowed its tax- free treatment.
     
    The Finance Bill 2019 has imposed tax on any sum of money paid or any property situated in India, transferred by a person resident in India to a person outside India, as it would be deemed to accrue or arise in India. The changes will be applied for all such transfers made on or after July 5, 2019.
     
    Currently gifts given by Indian residents to non-resident Indians - apart from the specified list of relatives - would be claimed as non-taxable. This is because the earlier tax put the onus on the recipient of the gift to make the disclosure and pay tax. As a gift to NRIs means that income is accrued abroad, it remained outside the tax net.
     
    But now, all gifts to NRIs will be income accruing in India and would be taxed as per the normal slab rates applicable to resident Indians. This means that the origin of the gift becomes important for tax purpose, instead of the destination of the gift abroad.
     
    The onus will be on the recipient (the NRI in this case) of the gift to disclose such gifts received if they originate in India and then pay a tax on it. 
     
    So, if the value of the gift is above Rs 10 lakh, the recipient will have to pay 30 per cent tax. The tax rate would get higher if the value of the gift, be it payment for studies or a house abroad, is more than Rs 2 crore or Rs 5 crore. In such cases, the highest tax rate for super rich, i.e. 35.7 and 42.7 per cent respectively would apply.
     
    For the purpose, gift will constitute shares, property, vouchers, cash etc exceeding Rs 50,000 made to anyone, apart from the specified relatives or blood relations.
     
    While making gifts to NRIs taxable, the Budget has proposed that in a treaty situation, the relevant article of applicable DTAA (double taxation avoidance treaty) shall continue to apply for such gifts as well.
     
    This amendment will take effect from April 1, 2020 and will, apply in relation to the assessment year 2020-21 and subsequent assessment years.
     
    The specified relatives list in terms of Section 56 of the Income Tax Act is fairly wide. It includes brothers and sisters, and their spouses. Gifts to this category will not attract any tax. But acquaintances, friends, and other close family relations would come under the purview of the tax.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
     
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