The taxpayers are supposed to be extremely careful while filing Income Tax Return, as a small mistake can invite a tax notice for them. Here are a couple of tax basic that you must know before you file your ITR for the Financial Year 2017-18, as the last date to file ITR for F.Y. 2017-18 is 31st July 2018.
Know the Financial and Assessment Year that is applicable for you.
Financial Year is that year in which you have earned the income and the assessment year is that year in which your pay tax for your Income. For example, you will file Income Tax Return in the assessment year 2018-19 for the income that you have earned in the Financial Year 2017-18. So, while filing your Income Tax Return you must fill the year correctly.
Select the correct ITR Form.
Basically, your income can be from one source or more than that, it can be from Income from Salary, Income from House Property, Income from Capital Gains, Income from Business and Income from Other Sources. In case you have Income from Salary, Income from house property and other sources, then ITR-1 is applicable to you. If you have capital gain over and above the sources of income mentioned above, then ITR-2 is applicable for you. Profits arising from the sale of shares, mutual fund and real estate are all clubbed as capital gain and are included in an Income Tax Return-2 form. In case you have business income, over and above sources of income mentioned in Income Tax Return-2, then ITR-3 will be applicable to you.
Know the Penalty for late filing of ITR.
In case a taxpayer files his/her Income Tax Return after 31st July 2018 but before 31st December 2018, then in that case the taxpayer will have to pay a penalty of Rs.5000. Furthermore, if a taxpayer files his/her ITR after 31st December 2018, then they will have to pay a penalty of Rs.10,000. If the taxpayer’s income is upto Rs. 5 lakh then late fee will not be more than Rs.1,000.