The last date to file your tax returns, without a fine, is on July 31. While those with perceived numerophobia (fear of numbers) tend to hand over this duty to tax practitioners or CAs, you can file your returns on your own by logging onto the Income Tax Department’s website. (https://www.incometax.gov.in/iec/foportal/) However, you must choose the correct form while filing the returns, otherwise your returns may become ‘defective’. If you are a salaried individual, you can choose between ITR-1 and ITR-2.
Sahaj, the simplest form
Sahaj in Hindi means easy. This is the name of the ITR-1. It is a simple form for a resident salaried tax-payer or pensioner without any complex financial dealings. This form is for people with income of not more than Rs 50 lakh per annum (or less than Rs 4.16 lakh per month), including income from salary/pension, one house property, agriculture (up to Rs 5,000), and income from bank or other savings, fixed deposits, dividends and family pension.
Once you log in with our personal details, you will see that this form is pre-filled with personal information, income details, and financial transaction data to enable quick and easy filing. (You can actually check the pre-filled data with your Form-16 provided by your employer, bank account statements or statements of tax deducted or collected at source (Form 26AS) before completing the filing online.)
However, if you are a non-resident salaried person or an an NRI visiting India and spending more than 120 days (but less than 182 days) — classified as not ordinarily resident — you should use ITR-2 not ITR-1. Even if you are a resident salaried person, but have made capital gains or losses during the relevant financial year, then you have to use ITR-2, not ITR-1.
Similarly, if you are a director in a company, own unlisted shares or ESOPs, or maintain a foreign bank account or any other assets outside India, you will have to use ITR-2 and not ITR-1.
Checks while filing
ITR-1 has five pre-filled sections that you need to verify before submitting the returns. These are personal information, gross total income, total deductions claimed, taxes paid, and total tax payable.
As described earlier, you can check your Form-16 to ensure that the information reflected in the ITR-1 is accurate. Likewise, compare the pre-filled data on interest income from fixed and saving deposits with your bank’s TDS certificates.
ITR-3 for professionals
For professionals like chartered accountants, doctors, lawyers, engineers, whose income is calculated based on actual profits, the tax returns can be filed using ITR-3. As per the Income Tax Department, individuals and Hindu Undivided Families engaged in business or profession, necessitating the maintenance of comprehensive books of accounts must use ITR-3. Moreover, individuals earning from salaried employment and additional sources like freelancing or part-time business activities can also use the ITR-3 form to file their returns.