eFiling of IT Returns AY 2019-20

This blog will help you to file own IT returns online with ITR-1 form for Assessment Year 2019-20 (Financial Year 2018-19).

Last Date: 31st July 2019. Advised to file income tax in June to get ITR completely processed in July.
Penalty: After July 31 but on or before December 31 - Rs 5000
Between January 1 and March 31 - Rs 10000


ITR-1 form is applicable if you have income from following sources:

• Salary
• House rent / loan
• Interest on saving bank account / FD
• Agriculture income less than Rs 5000
• Shares dividend + Other non taxable income
• Income less than 50 Lac

Prerequisites for e-filing

• Form 16
• Form 26AS (refer Step 4 below)
• Interest from saving bank account / FD
• Any investment that is not declared with company or not reflected in Form 16

Follow below steps to e-file your IT Returns (click on pictures to enlarge)

Step 1 – Get Form 16 from your employer

Step 2 – Register yourself at site https://www.incometaxindiaefiling.gov.in/home

Step 3 – Login on site

User ID is your PAN

Step 4 – Download From 26AS
Follow link My Account --> View Form 26AS (Tax Credit), you will be redirected to TRACES site. Download form 26AS for current Assessment year.

Step 5 – e-File ITR-1
Follow link e-File --> Income Tax Return.
Select current Assessment Year and ITR form as ITR-1 and Submission mode as Prepare and Submit Online.

Step 6 – Fill Part A General Information
Personal information will be pre-filled. Validate and modify information.
Nature of employment: Others (for Private sector)
Filed u/s: 139(1)-On or before due date (if you file before last date)

Step 7 – Computation of Income Tax
Add Salary/ Pension Details from Form 16
Standard deduction: 40000
Professional tax: 2500

Income chargeable under the Head 'Salaries' must match with Form 16.

Type of House Property: Select 'Self Occupied' for property if you are residing. Select 'Let Out' for rented property and provide rent details.
Interest payable on borrowed capital: enter from Form 16 - point 7(a). Applicable for home loan interest. (max limit 2,00,000 for 'Self Occupied' property)
Income from Other Sources: Not available on Form 16
Enter interest earned from all saving bank accounts + interest from all FDs

Deductions
80C: Investments - enter from Form 16 - point 10 (a) section 80C (max limit 1,50,000)
In case investments are not declared with employer, enter actual amount invested.
80D: Health Insurance Premium - Select appropriate drop down option for self and parents.
Refer Form 16 - point 10. (g) - Add all 80D deductible amounts and enter total amount. (like 4000 for self + 26000 for parent = enter total 30000 for 80D)

80G: Charity Donations - Auto calculated from Donations-80G tab
80TTA: enter interest earned from all saving bank accounts (excluding interest on FD. Max limit 10,000)

Exempt Income For reporting Purpose:  Enter tax exempted income like Dividends form shares, PPF Interest  etc.

Computation of Tax Payable will happen automatically. Do not change anything here.

Step 8 – Verify Tax Details
Details of Tax deducted at source from Salary will be auto populated. Tax deducted must match with Form 26AS. If not matching them enter details from Form 26AS.

Step 9 – Verify Taxes Paid
Make sure Amount Payable is 0.
You can have Refund in case extra tax is deducted by employer

In case Total Amount Payable is more than 0, then cross verify all amounts entered from Form 16.
If everything is correct, pay remaining taxes by 'e-Pay Tax' action front of Amount Payable OR e-Pay Tax link on http://www.incometaxindiaefiling.gov.in/home. You will be redirected to NSDL website.

Select Challan No. 280 to make tax payment. After making payment BSR code and Challan number will be generated. Enter these details in Taxes Details tab Advance Tax and Self Assessment Tax section. Total Payable amount will become 0 now.

Step 10 – Enter all Bank account details

Step 11 – Verification and Preview
Make sure Total Tax Payable is 0 before you Submit.
Verify name / PAN Number. My Capacity as 'Self' for IT return.
Enter Place details
Select I would like to e-Verify option and Preview & Submit.

Step 12 – eVerify and Submit
Preview all details and Submit.
OTP will be sent on mobile linked to Aadhaar number. Enter OTP and Submit.
If you have selected EVC option. Enter EVC generated from Bank ATM or verify from online banking.

Step 13 – Acknowledgement

You are Done! You will get Return successfully eVerified screen. No further action required.

You will get acknowledgement email with attachment.

Password: Enter your PAN (in small letters) and Date of Birth or Incorporation (in ddmmyyyy format)

Do NOT send this Acknowledgement to CPC Bengaluru.

Please post your comments to improve this blog. You can also reach me at mihir.sdoshi@gmail.com.

Learn more on investing at Finology.

Thanks,
Mihir

Why I have zero FD ?

Hello All,

Welcome to my new personal finance and investment blog. This blog will focus on personal wealth creation over long term with modern financial instruments.

Many people get surprised when I say "My FD balance is zero". Lets understand rational behind it.

Fixed deposit is traditional saving instrument over the years, however certainly not tax efficient. Take a example. Consider 3 financial instruments FD, PPF and Equity Mutual Fund and amount invested is 1,00,000 for 1 year. For simplicity, we will assume annual returns at 8% for all.

Maturity amount is 1,08,000 and 8,000 is your profit. This profit is added to your annual income for taxation. In case your income is above 10 Lac, you are in 30% tax bracket. Lets calculate net income.
Net Income = Profit - Tax

FD Income = 8000 - 2496 (30% tax + 4% cess on tax)
FD Income = 5,504 

PPF Income is tax free (lock in period is 15 years)
PPF Income = 8,000 - 0 = 8,000

Equity MF Income is tax free after 1 year upto 1 Lac
Equity MF Income = 8000 - 0 = 8,000


It is evident that FD returns are only 5.5% while PPF and MF returns are much better.
In developing countries like India, inflation rate is around 6%, so FD is actually giving you negative returns and your wealth is diminishing gradually.

Hope now you understand  - Why I have zero FD !

I will continue to post more investment topics on this blog, provide your valuable comments to improve this blog.

Learn and invest with Finology

Thanks
Mihir Doshi