Tax Archives -

Five Deductions That Can Help You Saving Tax Without Making Investments

Sun, 16 Apr 2023 12:40:07 +0000

The Buyt Desk

Several deductions are available under different sections of income tax to reduce taxable income. Most people attempt to make the best use of Section 80C limit with investments in several popular schemes like ELSS (equity linked saving scheme), PPF (public provident fund), and NPS (national pension system). But if you want to save tax without any investment then these 5 deductions will be helpful –

EPF Contribution

You can get deductions for saving tax with EPF (employee’s provident fund) contributions made towards a recognized provident fund. EPF is deducted from monthly salary and shall be allowable as a deduction under section 80C with a total limit of INR 1.5 lakhs.

Tuition Fees

Payments towards tuition fees of your ward are a comparatively less-known tax-saving option under Section 80C. Any individual taxpayer (salaried as well as non-salaried) can get this tax deduction rather than HUFs. It helps in saving tax towards tuition fees paid on the education of two children.

Under section 80C, tuition fees paid to any reputed college, school, university, or other educational institution located in India, for any two children’s full-time education are eligible for a tax deduction.

A taxpayer is eligible to avail of this tax deduction if a tuition fee is paid for his or her children. The tuition fees would not consist of payment in the form of donation fees, capitation fees, development fees, or payment of the same nature. No deduction will be available for payments made in a foreign educational institute.

Home Loan Interest

A person who is taking a home loan for purchasing any residential property can get a deduction for repayment of the home loan principal under section 80C and for interest payment done on the loan u/s 24. For a self-occupied residential property, a later deduction would have a maximum limit of INR 2 lakhs yearly.

If a person has purchased a home in the affordable segment, he or she will claim a deduction of INR 1.5 lakhs in FY under section 80EEA. The individual taxpayer will get INR 3.5 lakhs total deductions on the loan’s interest payment for purchasing a reasonable home.

Preventive Health Check Up

Under section 80D, a taxpayer can get a deduction with respect to preventive health checkup expenses, medical insurance premiums paid, and more medical investments related to conditions. You can get a deduction of up to INR 5,000 for preventive health checkup investments.

Up to INR 25,000 can be claimed for medical insurance premiums paid for dependent kids, parents who are less than 60 years old, spouse, or for self. If the insured is a senior citizen, the limit extends to INR 50,000.

Note that this expense is added to the complete limit, as applicable. All health expenses given above with an exception of preventing health checkups can be incurred by any mode excluding cash. Preventive health checkup expenses can be earned in cash.

Employer Contribution towards NPS

Another option to avail of deductions under section 80CCD(2) is the employer’s contribution towards National Pension Scheme (NPS). This deduction is along with the deduction under section 80C. However, under this deduction option, the taxpayer, who is a central government employee, will get a maximum of 14 percent of the basic salary and DA.

Deduction under section 80C has an overall limit of INR 1.5 lakhs and 80CCD(1B) has INR 50,000 overall limit. Any other employee will just get 10% of their basic salary, subject to the combined upper limit of INR 7.5 lakhs. Dividends, interest, etc. gained on the higher contribution will also be taxable.

Alongside these deduction options, there are some more ways to claim deductions. For example, up to INR 50,000 standard deduction for salaried employees, a deduction for house rent allowance or rent paid, a deduction of interest income, and a deduction for LTA (leave travel allowance) under section 10(5) of the Income Tax Act.

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9 Investments That Will Help You in Saving Income Tax

Mon, 10 Apr 2023 18:39:25 +0000

The Buyt Desk

Right Investment can help you in saving income tax under the Chapter VIA of the Income Tax Act. There are various deductions that can be claimed under Section 80C, Section 80CCC, 80CCD & Section 80D that will reduce your income tax obligation. But do watch out for associated risks and understand the returns.

If you’re a small investor, you must take into account the tax-saving investment that offers tax exemption benefits and helps in earning tax-free income. Start investment in the starting quarters of the financial year to sensibly plan and enjoy the maximum ROI (returns on investment) from numerous investment options.

Invest in tax-saving instruments

Tax calculations depend on what is submitted by an employee and then taxes are deducted accordingly. One can claim a duction of Rs 1.5 Lakh in a financial year by various investments under Section 80C of the Income Tax Act. An additional Rs 25,000 to 50,000 can be saved by buying health insurance.

Let’s look at some of the best tax-saving instrument options.

PPF (Public Provident Fund)

This is a long-term tax-saving investment option that helps investors to have a financial cushion after retirement. This scheme’s interest rate resets every quarter. All the contributions made towards this scheme, earned interest, and maturity proceeds, are tax exempted. PPF has 15 years maturity period with an extended duration of 5 years. A maximum of INR 1.5 lakhs can be claimed under section 80C of the Income Tax Act.

NPS (National Pension Scheme)

This scheme provides a pension to an investor from his or her retirement age. Investments made in this scheme are eligible for deduction under Income Tax Act’s Section 80CCD (1). A maximum deduction of INR 1.5 lakhs can be claimed. The minimum contribution amount is INR 500 while there is no maximum limit.

Equity Linked Savings Scheme (ELSS)

This is one of the common tax-saving investment options with three years lock-in period. One can get a maximum deduction of INR 1.5 lakhs. But, it is also one of the risky options because these mutual funds invest in equity and have market-associated returns earned. There is no maximum investment amount limit. Withdrawal is not possible before the successful completion of three years from the investment date.

Sukanya Samariddhi Account

This small deposit scheme is specifically launched for the girl child as the part of “Beti Bachao Beti Padhao” campaign with an 8% interest rate for the Apr-May-Jun 2023 quarter. The investments are eligible for tax exemption with the maximum amount of INR 1.5 lakhs under section 80C of the IT Act. The minimum investment amount is Rs. 250. The account can be opened after the girl child’s birth till she becomes 10 years old.

Unit Linked Insurance Plan (ULIP)

This is another tax-saving investment option that offers life insurance coverage as well as the advantages of investing equity. This is an insurance product with 5 year lock-in period and market-linked return earned. A candidate can withdraw the funds after expiring their lock-in period. The investment amount can vary based on numerous factors including the policy term, the candidate’s age, and the sum insured. The total premium paid should be less than Rs 2.5 lakh to gain tax exemptions on maturity.

Senior Citizen Saving Scheme (SCSS)

This scheme comes with a 5-years lock-in period and presently offers an 8.2% interest rate on the deposit which can be paid quarterly. The scheme can be further extended by 3 years. A senior citizen can make the maximum investment of INR 30 lakh and claim a deduction of up to INR 1.5 lakhs yearly under Section 80C.

Bank Fixed Deposit (FDs)

These are the security deposits much similar to other options of guaranteed return investment. The only differentiating factor is the tenure of investment applicable. Only 5-year tax-saving FD offers tax-free income. Hence, people with a low-risk appetite can invest in this option to save money over an extended period.

Insurance Policies

This investment option is recommended not just to save the tax but get excellent insurance coverage. Purchasing a life insurance policy provides great benefits on income taxability under sections 80C and 10(10D) of the Income Tax Act. Both premium paid and maturity proceeds towards the insurance policy are completely tax-exempted. A candidate can get tax exemptions with a maximum limit of INR 1.5 lakhs.

9. Health Insurance

Alongside the above-mentioned tax-saving investments beyond section 80C, there are some other investment options to save taxes. Health insurance premiums can also help with tax savings. Section 80D of the Income Tax saves your tax when you pay the health insurance premiums. An individual can get a deduction of up to INR 25,000 for their own, spouse, and children’s insurance premium. If you pay an insurance premium for parents aged less than 60 years then an additional deduction of Rs 25,00 is available. If self, spouse and parents are above 60 years of age then limit of deduction increases from Rs 25,000 t0 Rs 50,000.

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Capital Gains on Property Capped

Mon, 13 Mar 2023 04:20:35 +0000

The Buyt Desk

Buying property and selling it after a few years is a sort of investment that a lot of us do. It is considered a less volatile and secured investment. While working on this strategy, people forget associated tax exemptions. So, if you are planning to sell your luxury home and earn a large profit, then think again. Want to know why? Here, you’ll get the answer.

Any reinvestment of the sale proceeds going more than Rs. 10 crores will not provide you with a tax deduction. There is a cap on the tax-free capital gain on selling an expensive property.

It was noticed that high net-worth individuals were making claims of large deductions under these provisions by buying deluxe homes, eventually beating the very objective of the deduction. Applying this limit will discourage the practice of claiming a tax deduction on high-value sales. The government is hoping that this move will alleviate the extreme housing shortage and provides a push to the house-building activity.

The step to withdraw capital gain tax benefit on the sale of property or fixed assets, over Rs 10 crore, may disincentivize families from purchasing several residential properties as a security provision for their kids.

The budget has prohibited the clubbing of interest payments on the loan bought to get a property with its acquisition cost. So, when the purchased property is sold, the interest cost further can’t be an aspect of the acquisition cost in computing the capital gains.

The current provisions under Sections 54 and 54F facilitate deduction on the capital gains getting up from sending long-term capital assets if an assessee, within 1 year prior or 2 years after the transfer date bought any residential property in India. Or, it might be within 3 years after the construction date of any residential property in India.

At the bottom line, the budget has given that the acquisition cost or the improvement cost shall not comprise the interest amount claimed under Section 24.

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How Your Interest Earned on Various Investments is Taxed?

Tue, 14 Feb 2023 17:01:30 +0000

The Buyt Desk

According to the Income Tax regulation, the interest you earn from different investment instruments is taxable. It is considered your gross income and taxed according to your tax bracket. It applies to all instruments like fixed deposits, bonds, stocks, recurring deposits, etc. But Income Tax Act has some provisions using which you can save taxes on interest earned from different sources.

To know about these options, understand how earned interest is taxed and how to save tax on these earnings.

Taxability of Interest Earned from Savings Account

The Income Tax Department has bifurcated how interest will be charged on the savings account and fixed deposit. The interest income coming from the saving account, co-operative society saving account, or post-office saving account is taxable under section 80TTA of the Income Tax Act, 1961. The maximum deduction amount is Rs. 10,000 per year. It is not applicable to interest earned from all savings accounts. It confines only to the above-mentioned banks.

On the other hand, if the total interest earned from all saving accounts is more than Rs 10,000, which generally does not happen as most people invest their extra amount in investment instruments that ensure better returns. The deduction can be availed only for Rs 10,000.

The same deduction is different for senior citizens. For senior citizens, if a senior citizen has earned less than Rs. 50,000 through an interest in totality, then it will not be taxed and claimed as a deduction. If the income is more than Rs. 50,000, then tax relief will be given only up to Rs. 50,000, and over and above this will be taxed.

Taxability on Interest Income Coming from Fixed Deposit

The interest earned on a fixed deposit is fully taxable as it is considered income from other sources by the bank. Therefore, the interest sum gets added to the gross income. The banks deduct the TDS (Tax deducted at Source) if the interest earned is more than Rs. 40,000. And for senior citizens, the cap is Rs 50,000. If the interest earned is more than the cap amount, it comes in the taxable category. Banks deduct the TDS at the rate of 10%, and if the depositor does not have a Permanent Account Number (PAN), it is 20% TDS.

Paying TDS is not enough for those having higher incomes and falling in any tax bracket. For these individuals, the income earned through interest is added to the gross income of that person and taxed accordingly.

If any person’s total income is below the tax slabs, he can request tax exemption from the banks by filing form 15G. It is 15H for senior citizens.

Senior citizens can claim a deduction on interest income earned above Rs 50,000, according to section 80TTB.

Taxability on Interest Income Coming from Bonds

Any income gained from a bond gets taxed on an accrual basis, considering it as income from other sources. And the profit and loss coming from the bond are considered capital gains. One can take benefit of the Income Tax Act section 10(15)(iv)(h) to get an exemption in this tax.

Income From Public Provident Fund

The interest earned from PPF is tax-free. PPF falls under the category Exempted-Exempted-Exempted (EEE) category.

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7 Allowances that Save Your Tax

Wed, 01 Feb 2023 17:01:16 +0000

The Buyt Desk

You may consider allowances as financial benefits that a salaried employee gets from his employer which assists the former in dropping its tax load. Allowances are partitioned into several categories. An employee can claim the allowances every month. They will find these allowances helpful when filing income tax returns (ITR).

The ITR has details like a complete view of gross taxable income, net tax liability, and claiming of tax deductions. It is essential for taxpayers to file an ITR every year. Since the New Year has started, it is crucial to know about various allowances and their tax benefits for reducing income tax liability when filing ITR.

Remember that allowances are of three types – taxable, non-taxable, and partly taxable. Most people don’t aware of which allowance will help them claiming maximum benefit. The most popular allowance is one which comes under section 10. Its details are given in Form 16 which salaried employees get from their employers.

Form 16 is a certificate with information on tax deducted at sources (TDS), salary breakup, and exempted allowances under section 10. Form 16 is essential for filing ITR on a scheduled period. For the fiscal year 2022-2023 or the assessment year 2023-24, taxpayers need to file their ITR by 31st July of the present year.

What is an Allowance?

Salaried people make the most contribution towards complete tax collection. In their salaried part, a monetary benefit given over the basic salary is known as allowance. For tax liability, claim more allowances. Some expenses are partially taxable while some are exempted.

7 Different Allowances and their Benefits for Tax Saving

In this post, you will find 7 important allowances you can opt for to save your tax.

House Rent Allowance (HRA) (Sec. 10(13A))

This allowance is for a salaried employee who live in a rented house. They can claim tax exemption on this allowance. The exemption amount shall be lower for various things. The total HRA amount will be received. 40% of salary when living in non-metro cities or 50% of salary including dearness allowance and basic salary when living in metro cities. Excess of yearly paid rent over 10% of year salary including dearness allowance (DA) and basic salary.

Children Education Allowance

In this allowance, an applicant receives up to INR 100 on a monthly basis for each child. It will be exempted up to a maximum of 2 children.

Books and Periodical Allowance

An employee receives a tax-free reimbursement based on the income tax law on the investments made towards journals, books, newspapers, periodicals, journals, etc. The reimbursement given is the lower of the bill amount / the amount given in the salary package.

Leave Travel Concession or Assistance (LTC/LTA) (10(5)):

Under LTC/LTA allowance, an employee gets a tax-free expense for the traveling costs incurred on a leisure trip in India. Hence, they can take a leave from work and travel on vacation in the country. The fare costs incurred would be allowed by the employer as a tax-free allowance. The traveling transportation mode could be public transport, air, or railway. But, note that just two journeys in a block of four calendar years will be exempted. Also, this exemption is restricted to LTA given by the employer.

Uniform Allowance

The investment in keeping or buying the office or employee’s duties uniform is exempted from the limit of the real amount spent.

Helper Allowance

When the employer facilitates you to appoint a helper for performing the official duties, you will receive the helper allowance.

Relocation Allowance

Many companies ask employees to switch to another city for official or business purposes. The expenses made on various relocation aspects such as car registration charges, starting 15 days accommodation, car transportation costs, train/air tickets, and packaging charges are reimbursed by the employer. All of these reimbursements are tax exempted.

Rounding Up

All of these allowances and many others can assist salaried employees to make the most of their income tax deductions. So, be sure when you have interaction with your employer next time, you will receive the salary structure with more allowances included, which are completely tax exempted.

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How Does Debt Mutual Fund Help You In Saving Tax?

Fri, 27 Jan 2023 16:09:27 +0000

The Buyt Desk

Fixed deposits (FDs) and debt mutual funds are among the most prominent debt investment options for conservative investors. Compared to FDs, debt funds come with low risk. However, for regular investment options and liquidity, debt mutual funds steal the show.

The short-term capital collected on debt fund investments for under three years is liable to be taxed as per your tax slab rate. However, long-term capital which is gathered on debt fund investments held for over three years is accountable to a 20 percent tax rate with indexation benefits. Capital collected on FD returns is subject to tax slab rates.

According to financial advisors, if investors fall into a higher income tax bracket then debt funds are a more tax-efficient investment as compared to FDs. Want to know how? Keep on reading.

Bank FDs and Debt mutual funds are perfect for investors having low to moderate risk profiles. In terms of taxation, Debt mutual funds provide much better tax efficiency than bank FDs. The reason is that income from debt mutual funds is taxed differently. The interest income gained from bank FDs is taxed according to the tax slab of an individual. On the other hand, the income earned from debt mutual funds is taxed depending on the short-term as well as long-term Capital Gains.

When debt mutual funds are used after holding it for over 36 months then long-term capital gain is taxed at the rate of 20% with indexation benefit. However, when debt mutual funds are held for less than 36 months, a short-term capital gain is taxed at the tax slab of an individual.

Let us assume that you spend INR 1 lakh in a debt mutual fund for 4 years. It has generated a CAGR of 8%. After 4 years, your investment value will be approximately INR 1,36,000. You will have about INR 36,000 gain. When you consider the indexation benefits i.e. inflation adjustment, tax liability you will get on selling the debt mutual funds will be ₹3,566.

When you invest the same amount in FD, with similar return and tenure, you would have to pay a tax of INR 10,800 seeing the investor falls in the 30 percent tax bracket. The tax implications on Debt mutual funds and bank fixed deposits would be the same when investments are held for less than 3 years. Debt mutual funds are comparatively beneficial investment options in the higher tax bracket with an individual’s tax bracket and long-term gain taxation.

Remember that banks are regarded as almost risk-free based on the risk and return comparison because investment is insured up to INR 5 lakh extent. Even the returns are also pre-set. However, returns are market associated with debt mutual funds and are accountable for the risk of interest rate, inflation risk, and default risk.

In another interview, the spokesperson said that for taxation on FD and debt mutual funds, the latter gains a benefit for more than 3 years and above than that. Moreover, FDs earned interest is also taxed according to the income slab rate of the investors. But, no tax is charged on the bank FD’s maturity proceeds. TDS will be deducted by the bank at the rate of 10% when the paid interest amount on a fixed deposit goes beyond INR 40,000 or 50,000 in a senior citizen’s case.

For debt mutual funds, the taxation is based on the holding period (holding period of fewer than 3 years). However, when it comes to the working process of fixed deposits and debt fund taxation, there is not much difference between both. But, the profits or gains are taxed at 20 percent after indexation when you redeem a debt mutual fund after three years. The term indexation here refers to the process of adjusting the investment value in accordance with inflation to shield your capital gains against tax corrosion.

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One Common ITR Form – Will it Bring Ease in Filing Income Tax Or Make It Complicated?

Tue, 13 Dec 2022 04:10:03 +0000

The Buyt Desk

To make the ITR filing process easy for taxpayers the finance ministry has proposed one common income tax return (ITR) for all. At present, taxpayers have seven types of options for filing ITR. The income tax department is planning to merge all seven types of ITR forms, filled by taxpayers for different categories in one, except the ITR-7 form. The intention of ITR department is to make ITR filing less time-taking and easy for taxpayers.

This move will also help taxpayers in saving money as they don’t have to take paid service for ITR filing. The Central Board of Direct Taxes (CBDT) is taking this move positively, however, experts in the industry have a different opinion to share. According to experts, frequent changes in the ITR filing process and forms confuse people. Whilst taxpayers were already juggling between the old tax regime and the new one, the common ITR form for all will confuse them further. The income tax department had introduced a pre-fill option for taxpayers earlier and now comes the proposal to merge various forms into one.

Who Can File ITR Via This New Arrangement?

The option to file ITR via one common form will be available to all taxpayers except to non-profit organizations and trusts. The Central Board of Direct Taxes (CBDT) has even called for feedback from people using the new option to file ITR. The arrangement would become mandatory for taxpayer filing ITR-2 (ITR for capital gains) and ITR-3 (ITR for Business Returns) after it gets approved and implemented.

How Will One Common Form Help Tax Payers?

Though one common ITR form seems simple for taxpayers, for now, it is arduous as so many things have been introduced by CBDT lately, which sometimes confuses taxpayers. To avail of the benefit of these new arrangements, individuals have to be vigilant while choosing the options. However, as India is moving toward digitalization, we all should adapt to new technologies. Filing ITR automatically is one of them.

Seven Types of Income Tax Return

ITR-1 Form – It is the form called Sahaj. It is filed by an individual with income above 50 Lakhs, receiving income salary, one house property, and other sources.

ITR-2 Form – It is for people having income from residential property.

ITR-3 Form – It is for people earning income from the business profession.

ITR 4 Form – It caters to small and medium taxpayers.

ITR 5 Form – The form is for LLPs.

ITR 6 Form – It is filed by businesses respectively.

ITR 7 Form – It is for the trust.

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How to Harvest Your Capital Gains to Save Tax?

Wed, 30 Nov 2022 04:24:01 +0000

The Buyt Desk

The Capital Gains Account Scheme facilitates you to avoid taxes on your capital gains from the sale of stocks, mutual funds, and gold, if and only if you buy a house. The Indian tax book has a trick to avoid long-term capital gains (LTCG) tax on your capital gains but you have to reinvest your capital gains in buying a house or capital gains bonds.

You need to safely deposit all the taxable gains gathered from selling bonds, shares, debt or equity mutual funds, and diamond and gold jewels into a Capital Gains Account Scheme (CGAS). By doing so, you reduce taxes by about 10-20%. Not all gains can be transferred to CGAS but only LTCG earned on selling bonds, shares, debt or equity mutual funds, and diamond and gold jewels.

What are conditions applied?

You can harvest your capital gains from the sale of bonds, shares, debt or equity mutual funds, and diamond and gold jewels by keeping them aside and using them to buy a house later.

Only buying residential property is considered
You have to park the whole amount and not just gains
You must not own more than one house
You have to buy a house within 2 years or build one within 3 years

How long to hold an asset to claim LTCG?

You can avoid paying LTCG tax on the below gains that are transferred to the CGAS. Also the same must be used within 2 years of accrual to buy a house, or 3 years to construct a house to avoid paying LTCG tax.

Listed shares and equity mutual funds – at least 12 months before selling
Unlisted and foreign shares – at least two years before selling
Debt mutual funds, and gold and diamond jewels – at least 3 years before selling

What after transferring to the CGAS?

Within two years from the sale of capital assets, a new immovable residential property needs to be purchased to avoid LTCG tax on CGAS funds. If you opt to construct a house instead of buying, then you have 3 years to utilize the capital gains balance.

Park the entire sum, not just the gains

Consider your investment to be Rs 1 lakh in stocks through which you made a gain of Rs 80000. To save taxes you will have to park principal and gains in a capital gains account with any bank. In this case, you have to park Rs 1.8 lakh in CGAS. You cannot just park the gains made from the sale of the capital asset. Nor can you use just gains made in buying a new house. The whole consideration (principal + gains) has to be parked in CGAS. It applies to gains from the sale of both Indian and foreign shares and even gains from selling unlisted shares. All can be parked in the CGAS account. By filling out Form C and withdrawing the CGAS balance, within 2 years you can purchase a house or within 3 years, you can construct a house.

Terms and Conditions apply

Under the Income Tax Act of 1961, there are terms and conditions for availing of benefits under the CGAS.

On the day of selling the shares or mutual fund units, you shouldn’t be the owner of more than 1 residential property.
You need to use the CGAS amount only to purchase a residential property and not land or commercial property.
You would have to track the deadline for filing income tax returns to utilize the amount. You need to buy the property before filing your 2nd-year returns. The same cannot be reflected in 3rd-year returns.
Similarly, you have to reinvest in house construction before filing 3rd-year returns.

Staying invested in the house

Now that you have saved on your taxes by reinvesting in a house, the next moment you cannot just sell the house. Under Section 54 (F) of the Income Tax Act, you cannot sell the house for 3 years to save the taxes but for at least 3 years you have to stay invested in the house. The entire tax benefit would be reversed if you sell the house before the end of 3 years. And if you sell it before 3 years, you have to pay the tax along with penalty and interest on the LTCG from the date of the sale.

Joint ownership to buy houses

If you and your spouse jointly own mutual funds or shares, each of you can reinvest these capital gains to buy a house or build one. This doesn’t affect the taxation around house purchases. Each one can invest in different residential properties. Joint ownership of the asset will give maximum savings on LTCG taxes.

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Now You Will Get Less Time To Verify Your ITR Return

Wed, 24 Aug 2022 04:35:46 +0000

The Buyt Desk

For income tax returns filed on and after August 1, 2022, the Central Board of Direct Taxes has decreased the verification time limit from 120 days to 30 days.

The last day for filing individual Income Tax Returns for Financial Year 2022-23 was July 31st, 2022. Income Tax Returns verification is the last step to complete the process of Income Tax Return (ITR). Earlier the taxpayer had to do ITR Verification within 120 days from the date of ITR filing. ITR Verification is essential and the last step of ITR filing. ITR filing is incomplete and considered invalid if ITR Verification is not done within the stipulated time. There are different ways to do ITR verification. It is advisable to do ITR verification at the earliest and best when done along with ITR filing.

New rule : Time limit for ITR Verification is reduced

On July 29, 2022, the Central Board of Direct Taxes (CBDT) issued a new circular regarding ITR Verification. According to this circulation, the time limit for ITR Verification is reduced to 30 days from August 1, 2022. For returns filed until July 31, 2022, the old rule of 120 days time limit from the date of uploading or filing the ITR still holds good. To successfully complete the ITR filing process, after uploading or filing the ITR you need to stick to the timeline of ITR verification else it shall be deemed void. There are various ways through which you can verify your ITR.

What are different ways to do ITR verification?

There are three different ways to verify your ITR. Let’s look into each in detail.

OTP on the mobile number registered with Aadhaar

This is the most preferred way for ITR verification. The prerequisite for this method of verification is that you should have an Aadhaar number and the same should be linked to your PAN and also the Aadhaar registered mobile number and the mobile number linked to the PAN should be the same. Here are steps to do it

Step 1 : Select ‘I would like to verify using OTP on mobile number registered with Aadhaar’ on the ‘e-Verify’ page and Click on ‘Continue’

Step 2 : Select ‘I agree to validate my Aadhaar details’ in the pop-up box and click on ‘Generate Aadhaar OTP’.

Step 3 : Enter the 6-digit OTP received on the registered mobile number. This OTP is valid for only 10 minutes.

Step 4 : ITR shall be verified and on successful verification you will receive a SMS on your registered mobile number from the Income tax department saying that your ITR is successfully e-verified.

EVC generated through pre-validated bank account

Electronic Verification Code (EVC) is generated through your bank account for this process of ITR verification. The prerequisite for this method of verification is a pre-validated bank account. This pre-validated bank account is also needed to receive income tax refund. Here are steps to do it

Step 1 : Select ‘Through bank account’ on ‘e-verify page’. Then click on ‘Continue’.

Step 2 : The EVC will be received on both registered email and mobile number.

Step 3 : Enter this EVC and click on e-Verify.

Offline route

This is least preferred as it is time consuming and takes a lot of effort. For this way of ITR verification, you need to follow the below steps.

Step 1: Download ITR-V which is the acknowledgement receipt

Step 2 : Duly sign this form. Now this is verified ITR-V.

Step 3 : Send the same to The Central Processing Center, Income Tax Dept, Bengaluru-560500 Karnataka, through post or courier.

For this process, the date of speed post of the verified ITR-V should be within 30 days from date of filing or uploading ITR.

Step 4: Once the Central Processing Center receives your package, they will send a confirmation of receipt to your registered e-mail ID.

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Can You Revise Your Income Tax Return?

Tue, 16 Aug 2022 16:17:17 +0000

The Buyt Desk

Revised Income Tax Returns can be filed prior to completion of 3 months of the assessment year under Section 139 (5) of the Income tax act, 1961. Let us understand in detail.

The last date for filing a revised Income tax return for Assessment Year 2022-23 or Financial Year 2021-2022 is 31st December 2022.

In India, Income Tax Return (ITR) is a form that a taxpayer uses to file their income and tax for the financial year to the Income Tax Department of India. July 31st, 2022 was the last date for filing unaudited individual ITR as set by the Central Board for Direct Taxes (CBDT) for the financial year 2021-22. One can file ITR after the deadline if he /she has not done so till July 31st, 2022. The concept of Revised ITR was introduced in the Financial Budget 2022. Through this, the taxpayer can file his/ her revised ITR after setting right the errors.

What are Revised Income Tax Returns?

The last date for filing an unaudited income tax return was July 31, 2022.You may discover some error on your part in the IT return. Some incorrect information or missed giving some information, incorrect data, selection of wrong ITR form, incorrect bank details, incorrect income details, incorrect TDS, missed adding an extra source of income and many more such mistakes could be done while filing ITR for Assessment Year (AY) 2022-23 or Financial Year (FY) 2021-2022. If you want to edit these mistakes then you need to file Revised Income Tax Returns and edit your returns for that financial year. The Income Tax Act, 1961 has a provision to revise the filed ITR under Section 139 (5).

What is the eligibility and deadline for filing Revised ITR?

Taxpayers who have already filed their ITR either before or after the last date of filing are eligible for revising their income tax return. If you have not filed ITR for the current AY then you cannot file the revised ITR.

Taxpayers can file their revised ITR anytime three months prior to completion of the assessment year. So for AY 2022-23, Assessment year completion is 31st March, 2022 and thus the last date to file a revised ITR is 31st December 2022. Taxpayers can file their revised ITR online on the income tax e-filing portal.

https://www.incometax.gov.in here you can file the revised ITR online by logging in to your account.

Summing up all details about the revised ITR filing for FY 2021-22 or AY 2022-23

Under Section 139 (5) of the income tax act, 1961 taxpayer is allowed to revise his /her income tax return when he / she wants to edit the already filed ITR for AY 2022-23.
Taxpayers who have filed their ITR on or before 31st July 2022 or even after the deadline are eligible for filing a revised ITR.
Taxpayers can file their revised income tax return three months before the last day of the assessment year. 31st December 2022 is the last day to file revised ITR for AY 2022-23 for both audited and unaudited ITR filing.

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