With tax-filing regulations changing every year, it can be a headache for filers as they have to keep themselves abreast of the latest rules to ensure an error-free filing. Many, therefore, end up making mistakes. That is, out of 67.5 million taxpayers who filed income tax returns in the last assessment year, 12.5 million received tax notices, according to Vishvajit Sonagara, founder of Quicko.com, an online tax filing website. A majority of these were salaried, and the details these taxpayers had mentioned in the income tax return
forms didn’t match with those in Form 26AS. “Over the years, the tax department has created a robust tracking system using technology. Taxpayers need to be sure that all incomes are included when they are filing returns are under the correct heads,” says Sudhir Kaushik, CFO and co-founder, Taxspanner.com.
With July 31 just a couple of weeks away, taxpayers should get ready to file returns as soon as possible. Using an online tax filing website can help in filing error-free returns at low cost. Every year, the tax department releases validations that these websites have to put in place. The validations crosscheck and verify the details that the taxpayer has provided. Based on their past experiences, most of these websites put in place additional checks to prevent errors.
Prices vary depending on complexity:
Some online tax filing websites, like ClearTax.
in and Hrblock.in, let you use their platform for free if you don’t want assistance. If the individual has Form 16
in electronic format, he can upload it on the platform. The software automatically reads the information and computes the income and taxes. If the taxpayer has changed job and has multiple Form 16, the platform can combine the data from various forms and calculate the total income and tax liability. Other platforms such as Taxspanner.com
charge Rs 249 for self-filing, and Quicko.com
charges Rs 299.
If a salaried person needs help in filing taxes, he can opt for a slightly more expensive plan called as assisted filing. It starts between Rs 499 and Rs 799 and goes up if there is foreign income, capital gains and so on. Most of the websites have partner chartered accountants (CAs) who file the taxes. Some such as H&R Block India
and Quicko work with in-house as well as CAs. If you are unhappy with the expert assigned, you can request for a change. The taxpayer also has the option to consult a CA on the phone for a limited time for tax matters. The price for talking to CAs ranges between Rs 499 and Rs 999.
Faster, easier filing:
As these platforms use technology, a salaried person can file returns within 10 minutes if all the required documents are uploaded to their platform. The computations for capital gains from shares, fixed deposit, house property, are automatically done once you key in the details.
To make it faster, most of these platforms start by asking you a specific set of questions. You are asked if you have sold a property, changed jobs, and so on. Based on the answers to these questions, the platform decides the ITR form and other documents that you need to upload. “We have a similar set of questions for professionals and small businesses who want to opt for presumptive taxation scheme,” says Archit Gupta, founder and CEO, ClearTax.
It can be confusing for taxpayers to know if they are eligible for presumptive taxation scheme, especially in the case of taxpayers who are freelancers. The questions asked at the beginning of return filing, can help to know the eligibility.
Other than error-free and faster filing, the convenience and support also make these platforms a better choice than filing returns on the income tax department’s online tax filing utility. “Our support for client queries is more efficient over calls, e-mails and messages with minimum turnaround time for resolution of queries. There’s a dedicated tax advisor round the year for each customer,” says Chetan Chandak, Head of Tax Research, H&R Block India.
Some of these platforms have also added apps for filing, but they are not yet popular. Most individuals prefer to file returns on their computers.
Eliminating errors: These websites also use multiple methods to verify your details at each stage. Sonagara points out deductions under Section 16 as an example. Government employees get a total for Rs 7,500 deduction as entertainment allowance and professional tax. But many confuse this with deductions available under Chapter-6A, which deals with tax-saving investments. If the deductions claimed under Section 16 cross Rs 7,500, the taxpayer cannot move forward with the filing process unless he rectifies the mistake.
Every platform now matches the returns with the information available in Form 26AS to check if all incomes have been reported. Many individuals enter the mobile number in the field where they are supposed to state their total income. The software can detect such errors.
Taxpayers are responsible for mistakes: Despite all the checks, there’s still a possibility that there can be an error in filing. In the past, there was a case where an online tax filing website made a mistake in punching the salary of an assessee. The assessing officer raised the tax demand. When the case went to the income tax appellate tribunal, it said that as long as it was a genuine mistake and no mala fide intention of the taxpayer, he or she cannot be held responsible.
The onus of filing correct returns in on the taxpayer as it is his responsibility to provide exact details and check if the returns are filed correctly. All platforms give a summary to their customers before filing the tax. It’s essential that you review the returns after filing them.