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A Step by step guide to filing your Income Tax returns online

Economy, ITR

It is that time of the year when everyone is rushing to file their Income Tax returns. Did you know that you can file your returns online by following a simple process? Filing income tax returns online has been possible for many years now. In 2013, it was made mandatory to efile your income tax returns online if your taxable income crosses Rs. 5 lakhs during the year. The Income Tax department has simplified the eFiling process considerably over the years. You may consider taking a professional help to file returns in case of complexities or when there are multiple components of income are involved. For a simple, straight forward filing (e.g. Form 16 based), you can consider filing returns yourself online. It is perceived that eFiling income tax returns is complicated and time-consuming. But this is really not the case. We have put together a step by step guide on the different aspects of filing income tax returns online.

What are the forms to be used in various cases?

The following are the forms to be used in different cases:

ITR 1 (SAHAJ) For Individuals having Income from Salary & Interest.
ITR 2 For Individuals & HUFs not having Income from Business or Profession
ITR 3 For individuals and HUFs having income from profits and gains of business or profession)
ITR 4S (SUGAM) For Individuals/HUF having income from presumptive business


Are documents required to be submitted while filing returns online?

No. It is not required to submit any kind of documents (investment proofs/income proofs) while filing the returns. However, keep these documents safely in case they are demanded at any point in time by the authorities.

What is different this year, while filing returns for Assessment Year 2019-20?

The Income Tax department has brought about some important changes this year, as under:

1) Standard deduction to salaried individuals and pensioners

Transport allowance and medical reimbursement are two tax deductions which almost every salaried taxpayer easily claims. The Finance Act, 2018 eliminated these two tax benefits. The tax benefit from the transport allowance is Rs 19,200 p.a. (Rs 1,600 p.m.), while from reimbursement of medical expenses, it is Rs 15,000 p.a. At first, it may appear to be a loss of Rs 34,200 to you (Rs 19,200 + Rs 15,000). But, you don’t need to worry as a standard deduction of Rs 40,000 has been brought in their place. This is, in fact, good news for you since the overall tax benefit has increased by Rs 5,800 (Rs 40,000 – Rs 34,200).

This tax benefit has also been extended to the pensioners. Pensioners were not allowed any tax benefit of transport allowance and medical reimbursement. Therefore, they can gain Rs 40,000 as tax-free income.

2) Enhanced deduction under section 80D

You must be familiar with this deduction under section 80D that you can claim when you pay a premium for medical insurance giving coverage to you or your family. The tax deduction currently allowed is up to Rs 30,000 of the insurance covers you, your spouse or your children. You can get an additional deduction of Rs 30,000 on premium paid if you have a medical cover for your parents aged 60 years and above. If they are aged below 60 years, then the tax deduction cannot exceed Rs 25,000.

However, if anyone of you, your spouse or your parents is not covered under any insurance policy, then you can claim a tax deduction up to Rs 30,000 for the medical expenses incurred on them. Union budget 2018 has extended this benefit to senior citizens as well and increased the deduction limit from Rs 30,000 to Rs 50,000.

3) Increase in the deduction limit under section 80DDB

The tax deduction given to taxpayers for expenses incurred on treatment of his own or any family member’s critical illness has also been raised. Currently, the tax deduction is Rs 80,000 for a super senior citizen, Rs 60,000 for senior citizen and Rs 40,000 in any other case.

The upper limit of deduction has been increased to Rs 1 lakh for both senior as well as super senior citizens but the limit remains the same for the taxpayers up to 60 years of age.

4) No capital gains tax if the variation in stamp value and the actual consideration is up to 5%

The taxpayers who sell an immovable property for a sale consideration which is less than the value adopted by the stamp authorities (circle rate), then the rec department considers the sales value as the actual sales consideration. This results in higher capital gains even if the taxpayer has not gained anything. Further, the buyer also pays tax on the amount resulting from the difference in the stamp value and actual consideration paid. This results in double taxation.

In budget 2018, the government has taken steps to help taxpayers making genuine transactions. The government has proposed that no adjustments shall be made where the circle rate is not more between the sale consideration and circle rate is not more than 5%.

All these new or amended benefits can be claimed by the taxpayers from AY 2019-20. Most of the tax benefits can be availed at the time of filing an Income tax return. Therefore, it is important to be aware of tax laws and file returns accurately. H&R Block India is the largest individual tax filing intermediary in India. The in-house team of tax experts at H&R Block can get your Income tax returns filed accurately providing you optimum tax benefits.

5) NPS withdrawal exemption extended to non-employees

Employees investing in NPS get exemption up to 40% of the total accumulated balance in their NPS account at the time of withdrawal when they opt out or close the scheme. The budget 2018 has extended this tax benefit to everyone investing in NPS.

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