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Rules to know before e-file income tax return

Last date of filing income tax return is coming which is 31 July. Some people prefer to file income tax return through C.A. which is also an option but if we try, filing income tax return through the internet (e-return) is not a complex issue. E-return of income tax can be filed by income tax department website incometaxindiaefiling.gov.in which is free and some other websites too which charge a small fees for filing income tax return. Some chartered accountant also e-file income tax return but this also is a chargeable.

Filing of income tax return electronically is not hard but one need to know all the related things before e-filing of income tax return such as income, liability etc. These are the points which need to know properly before e-file of income tax return.

First one needs to analysis the details of income for e-filing the income tax return. For this one need to determine the source of income. If there is income from salary and saving account bank interest only or there is income from business or profession or income from other sources, capital gains or rental income.

If the assessee has one self occupied house and there is also a house with the assessee which is not given on rent, the assessee needs to pay the interest of that second house (Notional). If the assessee took the loan for construct the house, interest on home loan is deductible from the income. The restriction of 1.5 lakh for interest repayment in a financial year doesn’t apply to self occupied second house.

If the assessee received any gifts from the friends (not relative), anything above 50000 in a financial year is taxable. The gifts may be in cash or property like shares, jewellery, immovable property, bullion or any painting or art or craft etc. The relatives are restricted by income tax department and the relatives from which the gifts are allowed can be seen from here. Gifts received on marriage, through will or inheritance is not taxable.
Sometimes the person makes the investment with the name of spouse or children. One needs to include the interest income in his income for calculating the tax liability. In case of minor children, one can avail a deduction of Rs. 1500 per minor children.

Detail of income and taxes
One need to check the details of income in the form 16 and 16A which are the tax deducted certificate received from the deductor. One also should check it with form 26AS which is available with the income tax website income taxindiaefiling.gov.in. By this one can check the tax amount and any tax credit with your name. If there is some mistake, one needs to notify the employer to rectify, unless you may receive a notice from income tax department.
If the tax amount in previous financial year is more than 10000 Rs. And the assessee didn’t pay the advance tax; he needs to pay interest on the tax amount under section 234B and section 234C of income tax act.
Select the right form for return


For Individuals having Income from Salary & Interest
For Individuals & HUFs not having Income Business or Profession from
For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship
For Individuals & HUFs having income from a proprietor business or profession
For Individuals/HUF having income from presumptive business
For firms, AOPs,BOIs and LLP
For Companies other than companies claiming exemption under section 11
For persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 13(4C) or section 139(4D). (Not available for e-Filing)

One needs to file income tax return according to income sources. Also don’t forget to mention the MICR code on the return to get the refunds electronically.

One needs to notify income tax department by sending ITR-V by speed post or ordinary post. One needs to send this before 120 days from the day of e-filing of income tax return. One needs to check if it reached to income tax department Bangalore office or not from the same income tax website.
Wealth tax.

One need to know about the wealth tax too because the return of wealth tax deadline is also 31 July. Wealth tax is payable at the rate of 1% on the amount of wealth exceeding 30 Lakhs. Wealth tax is calculated on the last date of financial year like for the assessment year 2012-13, the date to calculate the wealth was 31 March 2012.

For wealth tax, these are included in wealth.
Motor car, land or building, jewellery, precious metals, furniture, bullion, cash in excess of 50000. However the cash at bank, shares etc are not included in the wealth. A housing property or a land which is not in excess of 500 square meters is not considered as wealth. Also a house which is rented out more than 300 days also not considered as wealth.

For foreign citizen, coming to India, wealth tax is exempted for 7 years on the assets or money fetched India from abroad.

One need to maintain the documents like form 16, form 16a, Balance sheet, income proof, any exemption claim certificate etc after filing income tax return electronically. Income tax department may ask for these documents anytime after the return filed.

If a person changes the residence, one needs to notify income tax department so the department changes it with the PAN card. 
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