(Source: BloombergQuint)

BQPortfolio: This Year, You May Need Help To File Your Tax Returns

If you ask someone to explain the process for filing income tax returns, chances are they would be intimidated a bit unless they're a chartered accountant or a student of finance. Still, concerted effort and a little courage would probably help them muddle through.

But experts say that this year it’s better for individuals to approach a professional to file their tax returns. The reason is the requirement for additional information.

You can read about the changes in the ITR forms here.

Also read: BQ Big Decisions: Think Again, A House May Not Be The Best Investment 

“...I believe that filing tax return is an extremely important process in one’s professional life and one should not take it lightly,” said Ameet Patel, partner, Manohar Chowdhry & Associates.

Individuals often invite the attention of tax officials because of errors of omission, he said. And with the need for more information, chances of such errors cropping up are higher.

What Should You Do?

The first thing you should know is the deadline for filing tax returns is July 31. It’s a good idea to begin collecting necessary documents in advance to avoid scrambling against time.

The first item on your to-do list, after finding a chartered accountant, is to get a copy of your bank statement. Patel calls this the “master document”.

“Apart from the bank statement, we also ask for explanation for every single entry in the bank statement, particularly the credit entry or deposits and then we prepare a bank summary,” said Patel.

Then, your chartered account will probably ask you for all your investment related documents. This is the first assessment year in which long-term capital gains on equity and equity mutual funds will apply. Till this year, many people didn’t keep detailed records of their investments, because these were exempt from long-term capital gains tax.

Going forward, it will be a good idea to maintain detailed investment record throughout the year, Patel said. This will allow you to keep a track of events such as stock splits and bonus share issues in later years.

Apart from this, tax that has been deducted at source over the year will reflect in Form 26A, which your chartered accountant can access from the Income Tax Department’s e-filing website.

In the event the tax filer has sold property during the year, they would also need to keep the agreement handy. This document usually contains the PAN of the buyer, which is required to be furnished in the new form.

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