The tax department has been working on improving the online filing infrastructure of both direct (income tax) and indirect (GST) taxes. The continuous improvements to move the tax filing system online, improving transparency and making returns filing system as user-friendly as possible has brought about changes in the way you will file your income tax returns (ITR) for the financial year 2018-19, that you need to file before 31 July 2019.
Here are three such changes you should note:
1. Delay in receiving Form 16
Your employer has to deduct tax on your salary (as per Income Tax Act limits) and deposit it with the government. This also involves submitting Form 24Q for the same.
However, the format for Form 24Q and Form 16 was recently changed to make ITR filing simpler. The tax department extended the deadline to submit Form 24Q from 31 May to 30 June.
Similarly, the last date for employers to issue Form 16 was also extended from 15 June to 10 July, leaving only 20 days for salaried employees to file their income tax returns (ITR), for FY 2018-19, before 31 July.
There are chances that the deadline to file one's ITR may be extended this year to avoid traffic load on the Income Tax Department's official website.
2. Section 80GGA
To curb false claims made for tax deductions, the CBDT (Central Board of Direct Taxes) has added a new section for 80GGA in the ITR-1 form.
If you have made any donations towards scientific research or rural development and wish to make claims, you have to provide additional details like name and address of the donee, PAN number of the donee, the total amount donated and amount eligible for the deduction.
3. Tax refund
Earlier, tax refunds were made via cheque as well. However, starting 1 March 2019, only e-refunds are being issued.
Further, these are only issued to those bank accounts that have been verified on the e-filing portal and linked to PAN of the taxpayer.
This change was introduced to bring transparency in the revenue system and improve the speed of refunds made. E-refunds are faster and eliminates any discrepancies.
To avoid issues and to receive your tax refunds early, link your PAN to your bank account. It doesn't have to be a savings account. It can be current, cash or overdraft.