We are now just few weeks away from the tax return filing deadline of July 31 and you need to be careful while you file your tax return this year as things are not necessarily be the same as these were last year.

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The very first thing is the return form. ITR form-1 can be used only by ordinarily residents having income up to Rs 50 lakh. Further they can use this form only if they have income from salary, one house (except loss carry forward cases), income from other sources (except winning from lottery, horse races, dividend income exceeding Rs 10 lakh etc). Non-residents or not ordinarily residents can no longer use the simplified one page ITR Form-1 (Sahaj) which they used to do until last year.

Do you need to fill additional details this year? Yes, this year salaried taxpayers using ITR Form-1 are required to give the break-up of their salary: allowances not exempt, value of perquisites, profit in lieu of salary and deductions claimed under section 16 of the Income Tax Act, 1961.

You need not to worry as these details are already at hand. Just refer to your Form 16 and Form 12BA and pick up these numbers from there. Similarly, for income from house property, you need to provide detailed computation in the form: gross rent received, tax paid to local authorities and interest paid on borrowed capital.

Now, you must be wondering why you are being asked these details. The government has computerised the processing of tax return. Your return filed is cross checked with the withholding tax (tax deducted at source) returns filed by employers for income as well as taxes paid. If there is any discrepancy, you are likely to be asked to clarify. It is better to be careful now rather than wasting time and energy in proving those clarifications later on.

Carefully report your exempt income including exempt long term capital gains transactions. Even if these may not have an impact on your return, a non-disclosure may unnecessarily result in an enquiry. The same applies to disclosure of your assets and liabilities in case your taxable income exceeds Rs 50 lakh or if you have any foreign assets to report.

Non-residents would be happy to know that they can now receive tax refunds in their overseas bank accounts. They just need to mention it in their tax returns forms while filing it.

Multinational companies generally offer shares of the overseas parent company to its employees under stock option plans. Such employees will face a challenge as new ITR forms require taxpayers to disclose the fair market value (FMV) while reporting capital gains on sale of unlisted shares.

Computing the fair market value of unlisted shares is a real challenge as the valuation methodology refers to the balance sheet audited by auditors appointed as per the provisions of the Indian Companies Act to value such shares.

For foreign companies not carrying on any business in India and not having a place of business in India, this valuation mechanism will not work. So, would a foreign company listed on overseas exchanges constitute an unlisted company as it is not listed on Indian exchanges? This is something tax authorities should clarify immediately to avoid any confusion for the benefit of such tax payers.

If you have paid all taxes and nothing is due to the government don’t remain under a notion that you may file the return at your convenience after the due date. Starting this year, this delay will cost you money. You will end up paying Rs 5,000 if you file the return after the due date but before December 31 and Rs 10,000 if you file it afterwards. If you fail to file the return by March 31, 2019, you will not be able to file a return thereafter.

Non filing of income tax returns may lead to a levy of penalty if there is any tax payable. In extreme cases, tax authorities may even invoke prosecution provisions u/s 276CC of the I-T Act subject to certain conditions contained therein. Therefore, one should ensure filing their returns on time.

A few practical tips to file your return accurately. Do reconcile your taxes with form 26AS. Consider clubbing income of your spouse and minor children if you made any investments in their names. Don’t forget to account for the interest on fixed deposits, recurring deposits or post office deposits. Include notional rent in your income if you own two houses - one in which you are staying and the other which is lying vacant or occupied by your parents etc.

Carefully maintain supporting documents of your tax return. Later on if any queries arise, it will be easy for you to respond.

Disclaimer: The views and investment tips expressed by investment experts are their own and not that of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

Source: Moneycontrol.com