Business

Checklist: Staying Tax Compliant in A.Y. 2017-18

Income Tax
Credits: Empowher.com

Hoping that the Financial Year 2016-2017 ended on a good note for all of you. Now buckle up and get ready to do the compliance part i.e. filing your Income Tax returns within time to prevent getting on loggerheads with the tax officials. Our proactive government has lived up to the promise of granting us sufficient window to disclose our details for the previous year by prescribing the ITR forms well within time.


Here, I would be discussing a few amendments that you should be well aware of before filing your returns:

  1. The following documents should be ready before filing the return:
  • Bank Statements for the previous year
  • TDS Certificates
  • Form 16 from your employer along with salary breakup
  • Rent receipts to substantiate rent paid during the year
  • Saving / Investment certificates
  • In case of Home Loan, interest certificate for the year
  • Audited/Unaudited Balance Sheet and Profit & Loss Statement
  1. Every person is required to quote his/her Aadhaar card number. In case, you don’t have one, make sure you apply for it before filing your return to prevent unnecessary delay. Ensure that your details in Aadhaar database (Full name/Date of Birth/Email/Mobile Number) matches with the PAN database.
  2. All taxpayers are required to disclose the amount of cash deposited in their bank accounts during the period of demonetization i.e. 2016 to 30.12.2016 if the aggregate cash deposit exceeds Rs. 2 Lakhs.
  3. People having unexplained income cannot file ITR-1 and have to file the correct ITR based on their source of Income. It will be taxed @60% along with education cess and surcharge, if applicable.
  4. Get hold of all the TDS certificates and verify whether the tax deducted is being reflected in your Form 26AS to ensure seamless refund. There are instances where TDS credit doesn’t reflect due to incorrect filing of TDS returns by the deductors.
  5. Verify whether the TDS Certificate issued by your employer reflects the correct amount of your Tax deducted. There are instances where TDS credit doesn’t reflect due to incorrect filing of TDS returns by the employer.
  6. It is impertinent to note that only the amount reflected in Form 26AS can be claimed otherwise you may have to visit your jurisdictional Assessing Officer for demand proceedings.
  7. In case your employer doesn’t give House Rent Allowance, you need not worry. There is a section 80GG in Income Tax Act, 1961 which allows you to claim deduction of rent paid up to Rs. 60,000 on filing declaration in Form 10 BA.
  8. Ensure that you avail the benefits of allowances like Travelling Allowance up to Rs. 1600 p.m., Children Education Allowance up to Rs. 100 per child per month, Hostel Allowance Up to Rs. 300 per child per month, Leave Travel Allowance etc.
  9. If you were unable to furnish your investment details to your employer, claim it at the time of filing of return. It is important to note that u/s 80 CCE, you can claim maximum up to Rs. 1.5 lakhs.
  10. If you have made an additional investment in National Pension Scheme, amount of Rs. 50,000 over and above Rs. 1.5 Lakhs can be claimed u/s 80CCD(1B).
  11. Assessees who are availing home loan facility from financial institutions, make sure you get annual interest certificate for claiming the deduction of both interest on borrowed capital u/s 24(b) and principal component u/s 80C.
  12. Medical reimbursements up to Rs. 5,000 can be claimed against preventive medical checkups.
  13. Health Insurance in case of individual/HUF can be claimed up to Rs. 25,000 and Rs. 30,000 for other than senior citizens and senior citizens respectively.
  14. Philanthropist people having made donations under specified organizations, keep your receipts handy and claim the amount u/s 80G.
  15. Tax rebate u/s 87A of maximum Rs. 5,000 will be allowed, for total income up to Rs. 5 lakhs.
  16. There isn’t any change in the exemption limit of Rs. 2,50,000 for individuals other than senior citizens, Rs. 3,00,000 for senior citizens and Rs. 5,00,000 for super senior citizens. 
  17. There is no change in the tax audit limit prescribed  for businesses u/s 44AB i.e. up to a turnover of Rs. 1 crore and  but it has been enhanced to Rs. 50 Lakhs from Rs. 25 lakhs in case of professionals.
  18. For people opting for presumptive taxation u/s 44AD and 44ADA, the turnover limit has been increased from Rs. 1 crore to Rs. 2 crore in case of business and from Rs. 25 lakh to Rs. 50 lakhs in case of professionals respectively.
  19. Professionals have to be get themselves audited on declaring a profit of less than 50% of Gross receipt/turnover u/s 40ADA.
  20. For people having presumptive income from business and profession u/s 44AD, a single cash receipt can deny you the benefit of 2% of gross receipt and you would have to pay taxes at 8% of Gross receipt/turnover.
  21. For people receiving arrears of salary, dearness allowance and other taxable allowances in the previous fiscal, verify whether your relief u/s 89(1) has been properly calculated and Form 10 has been correctly uploaded to get the benefit of relief.
  22. Ensure that you have disclosed the details of all active accounts held with banking company/post offices during the previous year.
  23. Refund can be credited directly to your bank account provided the account number and IFSC code mentioned is correct and active.
  24. Due dates for filing of return u/s 139(1):
  • Non Tax Audit Cases (salary, pensioners, turnover<2cr): 31stJuly
  • Tax Audit Cases: 30th September
  1. In case you inadvertently skip the due date, return can be furnished by the end of assessment year or before completion of assessment, whichever is earlier. Example – The return for the financial year 2016-17 can be filed up to 31st March 2018.
  2. In addition to original return, now belated return can also be revised up to the same period as mentioned in point 26.
  3. In case of failure in furnishing the return of income by the end of relevant assessment year, be prepared to bear a penalty of Rs. 5,000 u/s 271F.

Just take care of above and enjoy a good night sleep without the fear of taxmen knocking at your doorsteps. The author could be reached at amritaagrawalca@gmail.com.

About the author

Amrita Agrawal

Amrita is a finance professional, a qualified Chartered Accountant and Company Secretary with more than half a decade of work-experience. She is an avid reader and keen to be a full-time blogger.

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