Form 16 is usually issued by employers to employees and provides a summary of the salary income earned and the taxes deducted at the source (TDS). However, some salaried individuals, as well as freelancers, consultants, and those with income from multiple sources, may not receive Form 16. This can cause confusion when filing the Income Tax Return (ITR) without this essential document.
Certain Considerations for ITR Filing
Deadline: Taxpayers (not subject to audit) must ensure to file their ITRs on or before the due date, typically July 31 of the assessment year, to avoid penalties and interest.
Accuracy: Taxpayers should cross confirm the information entered in the ITR form with those in Form 26AS/ Annual Information Statement (AIS)/ Tax Information Summary (TIS) etc. to avoid errors or discrepancies.
Documentation: Maintain records of investment proofs, bank statements, rent receipts, and other relevant documents to substantiate claims made in your return. Taxpayers need to ensure that all deductions claimed are supported by valid documents.
Filing of income tax return without Form 16
Here is a step-by-step guide on how taxpayers can file their income tax return if they don’t have Form 16.Collate relevant documents
Firstly, the taxpayer gathers all the necessary documents to accurately report their income as below:Salary slips and income statements: The salaried individual should gather monthly and/or yearly salary slips with details of one’s earnings, deductions, and TDS. For non-salaried individuals, they should collect income statements or invoices for services rendered during FY 2023-24.Bank statements: Obtain bank statements for all your accounts where income has been deposited. This includes interest earned on savings accounts, fixed deposits, and any other income sources.
Investment proofs: Collect proofs of investments made during the financial year under various sections such as 80C (e.g., LIC premium receipts, PPF contributions), 80D (e.g., health insurance premium receipts), and other eligible deductions. This will be needed if the taxpayer opts for the old tax regime.
Rent receipts: If applicable, gather rent receipts to claim House Rent Allowance (HRA) exemption. Again, this will be needed if the taxpayer opts for the old tax regime.
Compute total income
Computing the gross total income: Once the relevant documents are collected, the individual should compute their gross total income. The taxpayer has to total the income from salary based on salary slips or income statements received from clients or employers (if applicable). If salaried, then standard deduction of Rs 50,000 as well as HRA tax exemption and LTA tax exemption will be deducted from the salary income here.
Other income: Include interest income from various sources such as fixed deposit, savings account, RBI floating bonds, post office savings scheme. Also, include rental income, capital gains from investments, or any other sources of income you may have earned during the financial year. If you have rental income, then claim 30% deduction from rental income as well as deduct municipal taxes paid. If there is any interest paid on home loan, same has to be deducted from the rental income.
Deductions: Once the gross total income is calculated (after deducting tax exemptions), it’s essential to understand the eligible deductions that can be claimed under various sections of the Income Tax Act. Common deductions include investments under Section 80C (e.g., PPF, NSC, ELSS), health insurance premiums under Section 80D, donations under Section 80G, etc. Ensure you have valid proofs for all deductions claimed. Remember, deductions can be claimed depending on the tax regime chosen.
Determine tax liability
To determine your tax liability for the financial year, begin by calculating the total taxable income after taking into consideration all income sources such as salary, investments, and any other earnings, any TDS (Tax Deducted at Source) already deducted and deposited by your employer, as indicated on your salary slips as well as deductions and exemptions. For additional sources of income other than salary, be sure to account for any advance tax payments made.
It’s essential to accurately assess and account for all incomes and deductions to compute your total tax liability correctly. Once such taxable income is determined, use the prevailing income tax rates for the financial year to calculate your tax slab. This would enable one to ascertain the exact amount of tax you owe.
To lower the amount of tax payable, one should compare the tax liability under both the old and new tax regimes. You should opt for the tax regime that results in lower taxes.
Choose and fill the appropriate ITR form
The taxpayer needs to select the appropriate ITR form based on their income sources, residential status, and eligibility criteria. Commonly used forms for individual taxpayers generally include ITR-1 (Sahaj) and ITR-2. Choosing the incorrect ITR form will lead to one filing a defective ITR. Hence, one should be careful with choosing the correct ITR form. There are various ways to file ITR — One can file ITR online on the e-filing website, partially offline via JSON utilities and via third-party websites.
Submission of ITR form
After filling your ITR form, proceed to submit it online via the Income Tax Department’s e-filing portal available at https://www.incometaxindiaefiling.gov.in/
Once successfully submitted, download and retain the acknowledgment receipt (ITR-V). This document serves as confirmation that your tax return has been filed with the Income Tax Department.
Verification of ITR form
Verify your ITR-V, either electronically (via Aadhaar OTP or net banking) or by sending a signed physical copy to CPC Bangalore, within 30 days of e-filing to complete the filing process. Timely verification of your ITR is essential as this process initiates the assessment of your tax liability or refund, ensures compliance with tax laws, and enables you to claim any refunds due. Failure to verify your ITR within the specified timeframe may render the return invalid, resulting in penalties and delays in processing your tax return.
Post-filing procedures
Taxpayers should monitor the processing status of their filed ITR through the Income Tax Department’s e-filing portal. Once the ITR is processed, the tax department credits the tax refund (if any) directly into your bank account. Further, taxpayers should be prepared to respond promptly to any communication or notices from the Income Tax Department, especially if your tax return is selected for scrutiny.
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