Before we begin with the step by step process to help you file the e-return well before the deadline of July 31, 2019, here are discussed some key changes which need to be kept in mind.
Well this time, to clamp down shell companies and also check on various false deductions being claimed, the tax department has notified a slew of changes that need to be kept in mind.
Who was allowed to file ITR 1 until last year i.e. for FY 2017-18 (Ass yr. 2018-19)?
Until now salaried individuals with income up to Rs. 50 lakh in a year or those with income from single house property or income from other sources were allowed to file their tax returns in the simplest ITR1 or Sahaj form.
Investors who redeemed their investments in equity, ELSS or equity-oriented MFs also were allowed to file ITR despite implication of LTCG gain. Because the LTCG was exempt from LTCG tax if the transfer or sale was made one year hence from the date of acquisition and security transaction tax or STT was paid during the transfer. And this transaction until last year had to be reported as tax-free LTCG as exempt income on the column of ‘taxes paid and verification.
What changes in ITR 1 for FY 2018-19 (Ass yr- 2019-20)?
Salaried individuals who have directorship in some companies will no longer be able to file their returns in ITR1.
Those with investments in listed and unlisted shares are also debarred from filing ITR1.
Also, the column for reporting tax free LTCG after LTCG on equity investments has been reinstated as per the Finance Act, 2018 has been removed in the new ITR 1 form for FY 2018-19. So, now even a salaried individual who have made redemptions in FY 2018-19 and accrues LTCG on equity shares exceeding Rs 1 lakh is required to report the same in ITR-2.
Also, as with the other ITR forms, this time in case of ITR 1 also you need to give the break up of interest income along with the source. This is done to check false claims on interest from savings account which is Rs. 10,000 as per Section 80TTA. For seniors aged 60 years and above, the deduction in respect of interest from banks savings, deposits etc. has been hiked to Rs. 50,000 for the financial year, so this reduces their tax liability.
Note for each of the interest income source, the amount as well as the source has to be entered separately.
So, despite the rebate being extended to up to Rs. 5 lakh income, all Indian residents with gross income exceeding Rs. 2.5 lakh in the last fiscal year need to file their return. Individuals with gross income up to Rs. 50 lakh , whose accounts are not required to be audited can file ITR 1.
Documents required for filing ITR 1
To correctly assess your tax liability for FY 2018-19, you need to collate all important documents such as expenses, bank account statements, supporting against investments made during the year etc.
Also, other income sources such as that from pension, rental income from house property, interest from different investments or refunds also needs to be added to calculate the total tax liability as per the slab of the taxpayer.
After the SC verdict on Aadhaar, PAN-aadhaar linking rule still needs to be followed to e-file return for the processing, though the deadline has still been extended by another six months to September 2019.
Employer issued Form 16 to know tax deducted at source
Form 26AS from Traces that provides for tax deducted on other investments such as bank FDs etc.
Process to e-file ITR 1
The first time income tax return filers need to first get their PAN registered on the income tax e-filing website and for it in the field for USER ID, one needs to give in the PAN number and create a password for future filing etc.
1. Visit the e-filing portal of the income tax department.
2. After you have created the user ID and Password, it will be authenticated through an OTP.
3. In the next step, you need to click on the link for ‘ income tax return'
4. Choose relevant financial year or assessment year, ITR form plus the mode of submission
5. For e-filing, you need to select the ‘prepare and submit online' option.
6. Click on the correct e-verification option, email, mobile number, etc.
7. On the income tax computation page, provide the required details.
8. The generate tax payable amount can be cross-checked.
9. Pay the tax using any of the payment methods such as debit card, net banking etc.
10. Submit the income tax return.
Note verification is an essential part of income tax return filing and without it your ITR filing process remains almost undone.