The ITR forms for the financial year 2019-20 have gone through numerous alterations. These forms have been made far more detailed with an attempt to plug tax leaks. For instance, this year onwards you no longer can repost a consolidated figure under the head ‘income from other sources’. Incomes from sources like income tax refund, interest income from deposits (fixed and recurring), bank accounts and pass-through income have to be declared separately under each head this year onwards.
Here’s listing down a few points to keep in mind while filing your ITR:
- Sale of immovable property:
Mention the buyer’s PAN details; address and percentage share in the property, among other details in case you have sold immovable property.
- Unlisted shares:
Details of unlisted shares held at any time during the financial year must be provided. Those who hold employee stock options or ESOPs in their unlisted company will get affected by this.
- Disclosure of foreign assets:
The scope of disclosure for foreign assets has been expanded. Under the new columns of depository and custodian accounts, one must report assets and bank accounts where one is a beneficiary or signing authority. Failure to report any information will amount to concealment of income and shall be liable for stiff penalties.
- Misreporting LTCG on equity:
This is the first year when taxpayers will report long-term capital gains (LTCG) from equity investments. LTCG above Rs 1 lakh in a year will be taxed at 10%. These gains are to be reported in schedule CG, section B4. You don’t need details of dates or name of the security transferred, but have to key in accurate details about total consideration value, fair market value and cost of acquisition. You can easily get the statement on capital gains from your broker or mutual fund house. Take the help of a qualified professional to sail through the process. In online portals that allow free self-filing, you just have to upload the capital gains statements that will automatically populate your LTCG.
- TDS on property deals:
From 1 June 2013, any buyer who has purchased an immovable property worth more than Rs 50 lakh has to deduct 1% TDS from the payment to the seller and deposit it in the government account. However, just a timely payment may not be enough to save you from the taxman.
TDS has to be deducted on each payment, including advance, instead of the final payment. This is where most taxpayers go wrong. In the case of staggered installments, you will be required to deduct TDS on each payment and pay it through Form 26 QB within 30 days of the date of deduction. You have to get correct PAN details of the seller and issue Form 16B to him in time. Delay in filing or submission of either form will not only get you a notice but also attract interest and late fees of Rs 200 per day.
- Not deducting TDS on rent:
The government extended TDS on rent to all salaried individuals and HUF in 2017. If you pay rent above Rs 50,000 per month, you have to deduct 5% TDS from the rent paid to the landlord and file it at the end of the financial year. The rule should not be taken lightly. Non-deduction of TDS is non-compliance with the tax law. The tax filer may have to pay a penalty equal to the TDS amount. One common mistake is to calculate TDS on the total rent paid in a financial year instead of every month.
- Mismatch in income, expenses:
The IT Department will now pry into your social media accounts to detect any gap between your expenses and reported income. If there is a mismatch you could be in trouble. Whether by mistake or deliberate, not reporting all income sources while filing an income tax return can attract a tax notice. The income tax department is likely to treat the mistake as a violation of the I-T Act and you may end up getting a notice.
Nobody wants the taxman knocking on their doors. There are many things that can go wrong while filing your tax returns. That is why you should not leave it till the last minute. Start the process now and get all your documents in place and take your time and file your ITR.
