The last date for filing income tax returns is 31 August. Even though the Income Tax Department has simplified the tax return forms, there are a number of things one should keep in mind.
Here is a brief checklist for those who haven't filed returns yet.
Identify All Taxable Items
A common mistake while filing returns is ignoring to declare a few income sources or assets, thinking they do not fall under the tax net. Failing to declare those items may invite trouble in future. One such source of incomes is interest earned on recurring deposits opened in the name of minor children. The interest accrued in such deposits is treated as the income of the parent.
Income Earned on Savings Account and Capital Gains
Interest earned on cash holding in the savings bank account is also taxable, which one should not forget to declare. Gains made through mutual fund investments should be declared if they are offloaded after one year from the date of purchase. Capital gains made while switching from one scheme to another should be declared, as they may be treated as default in future. Any gift above the value of Rs 50,000 received from persons other than relatives should also be declared.
Don't Worry About Mistakes in Filing Returns
Any mistake committed while filing returns can be rectified any number of times under the tax laws. Failing to declare certain income, discrepancies in postal address and bank details, or filling a wrong Income Tax Return (ITR) are some of the mistakes, which can be corrected later. The time allowed to correct such errors is 24 months from the last date of the financial year. For the financial year ending 31, March, 2015, tax payers can make corrections unlimited times before 31, March, 2017.
Delay in Filing Returns
Those who miss the August deadline can do it by March next year. Delayed returns can be filed within 24 months from the end of the particular financial year. For example, if an individual delays returns for income earned during the financial year 2013-14 or assessment year 2014-15, he or she can do it on or before March 31, 2016. However, missing this deadline will invite a penalty of Rs 5,000.
Filing Returns in Case of Below Taxable Income
Filing returns for income falling below the taxable limit of Rs 2.5 lakh will be helpful in future if an individual applies for home loan, vehicle loan, etc. It will also be beneficial while applying for visa.