Part 1 FAQ on Income Tax Return Filing

I have changed my job during the Financial Year. What should I do?

It is seen in most of the cases that when an individual switches a job, he/she forgets to mention income received from previous employment to the current employer. Each employer provides a Form 16 which contains the details of salary income received by the employee and tax deducted on it. Both current and previous employer prepares a Form 16 calculating taxable income in which it gives a maximum exemption limit of Rs. 200,000 (for FY 12-13 & FY 13-14). Thus it happens that one individual gets the benefit of exemption limit more than once. This often leads to less deduction of TDS due to which interest becomes applicable on remaining tax payable amount. You should always mention the below details to your current employer:

  • Income received from previous employment. This will help the current employer to calculate your consolidated income for the financial year.
  • Amount of TDS deducted on your income from previous employer. The current employer will deduct TDS accordingly.
  • Tax saving investments made on your behalf by the previous employer.

The return is prepared by consolidating all income received during a financial year. Gross Taxable Income (GTI) is calculated and taxes are paid after giving the maximum exemption limit only once.

I have forgotten to mention my tax investment details in Form 16. How can I claim it?

Often salaried individuals forget to provide their tax saving investment details to the current employer while preparation of Form 16 or deduction of TDS. Due to this excess tax is deducted from the salary and it leads to the problem of claiming refund of TDS. The tax saving investments made can still be shown while filing the income tax return and the excess TDS can be claimedEven if you have switched your job and made the tax saving investments during the financial year, the details of such investments can be furnished in the ITR Form. The maximum deduction that can be claimed on these investments cannot exceed the taxable income during the financial year. Please note that no documents for such investments are to be furnished while filing the Income Tax Return.

How should I plan my income and investments for the financial year and by when?

You should plan your taxable income and make tax saving investments before 31st March of the financial year. If the planning is done properly before time, it helps to reduce payment of unnecessary taxes. If the investments are not fully utilized i.e you still have options of making investment to save taxes, you can still get time to make such investments to reduce tax.  Further, if less tax is deducted from your salary and you still have some tax liability, you can make an estimate of the tax liability and make advance payment of it to be relieved from the interest which is applicable on less tax payment and when the tax payment is above 10,000.

What are the investments I can make under 80C? What is the maximum limit?

You can claim a maximum deduction of Rs. 1 lakh under 80C of Chapter VI of the Income Tax Act, 1961. If you are in the tax bracket of 30% then you can save taxes of up to Rs. 30,000 if investments are made in 80C. The following investments can be made under section 80C:

  • Public Provident Fund (PPF)
  • Voluntary Provident Fund (VPF)
  • Home Loan Principal Repayment
  • Life Insurance Premiums
  • Senior Citizen Savings Scheme (SCSS)
  • 5-year Bank FDs
  • 5-year or 10-years NSCs
  • Post Office Time Deposit Scheme
  • Term Deposit Schemes from Government Companies
  • Equity Linked Savings Scheme (ELSS)

What are the other investments that I can make apart from 80C?

Deductions under Chapter VIA of the income tax act can be claimed by salaried individuals if you make payment for the investments. The lists of common investments are shown below:

80 D – Medical Insurance Premium

80 E – Interest on Education Loan

80 G – Donations made

I receive HRA and also make payment of housing loan. Can I claim both benefits?

In the Income Tax Act, HRA and Interest on Borrowed capital (Housing Loan) are two different topics and has no interlink with each other. One can claim HRA if he satisfies the necessary conditions for claiming it. It has no interdependence on claiming of interest on housing loan. Further, Interest on Housing loan can be claimed if one makes payment for the loan interest during the financial year. The amount of exemption to be claimed depends if the house property is let out or self occupied.

Excess tax has been deducted from my salary. How do I claim the refund?

Sometimes employer deducts excess tax from salary. It may be when you fail to provide your tax saving investment details to the employer or by mistake excess TDS payment has been made. In such a case you need to file your Income Tax return in order to claim the refund of the amount. Also, you need to provide your Bank Account details (Name, Account no., Type & MICR) in order to get the refund credited. ECS option can also be selected and cheque is issued if payment is above Rs. 50,000.

Full TDS has been deducted from my salary and I have nil tax payment. Do I need to file my income tax return?

If your income is above Rs. 500,000 it is mandatory to file income tax return. In case your income is below Rs. 500,000 it is not mandatory to file income tax return but there are some conditions to it which needs to be satisfied. Further, it is always recommended to file your income tax return to maintain your income record for the financial year and to declare a valid proof of you income when needed.

Categories: Income Tax Return

1 reply »

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