Demonetization Effect: ITR Filing Rise by 25% Last Year

Demonetization Effect in ITR Filing

25% Growth in ITR Filing

The period between March 2017 and August 2017 saw a rise in filing of income tax returns by 25 % over corresponding last year period. Increased numbers of people are now filing income tax returns on time post the demonetization and clean money interventions taken by the central government of India.

In last financial year 2016-17 during corresponding period 2.27 lakh people had filed their income tax returns, while this year the number for the period was 2.83 lakh people.

Personal Advance tax collection also evinced growth during the period over corresponding period last year and rose by 41.79% while personal income tax collection under self assessment tax grew by 34.25 %.

Digitization Impacts Filing of Income Tax Returns Rate

Reports suggest that demonetization and online payments gave a further fillip to the efforts of Income Tax department to increase tax coverage. Digitized transactions data can be easily tracked and recorded at source and at real time through bank account linkages of PAN and Aadhaar.

Income Tax department is also using the digital platform to send reminders to crores of individuals simultaneously for file income tax returns. For example IT department may send message that as per Form 26 AS income tax filing would be required within due date. Individuals now know that all financial transactions, debits and credits have become transparent due to digitization and filing of income tax returns cannot be evaded.

Filing of Income Tax Return in India Has Been Simplified

Filing of income tax return has been simplified over the years and now it is possible to self file income tax on the income tax portal without taking external help. The simplified procedures are enabling increasing number of Indians to timely file their income tax returns. Individuals need to create their account on the income tax portal by providing their PAN card and Aadhaar number. Thereafter they can log on to their accounts any time on the portal and file their income taxes.

Importation of Forms Data for Filing Income Tax Return

For filing of income tax return the necessary tax related documents like Form 16 and Form 15G/H details has to be imported on to the individual account. Since the individual tax account is linked with PAN, the portal imports Form 26 AS data on the individual account page. Individuals can always view the imported forms by logging on to their accounts on the portal.

Claiming Deductions and Exemptions while Filing of Income Tax Return

Individual tax payers need to select the correct form applicable in their case for filing of income tax return. The forms include ITR-1, 2, 2A, 3,4, 4S, 4,5,6,7. Thereafter the income data has to be provided under the mentioned categories. The imported data from forms is fed into the form for calculating the taxable base. For example the tax deducted at source amount is fed into the form and is deducted from the taxable income base.

Individuals also need to fill in all the items applicable for tax exemptions in their case. For example Income Tax law allows tax exemptions for health insurance, life insurance, home loan, education loan, tax saving investment instruments and other exemptions. Individuals need to fill in the amounts against each of the exempted items. Individuals also need to fill or check against the rebate amounts applicable in their cases.

Confirmation for Filing of Income Tax Return

The income tax filer needs to click on the processing tab after all the applicable information has been filled in the relevant boxes where after the portal system would return the calculated income tax sheet mentioning the income tax amount. This sheet needs to be checked by the individual tax filer. If the individual requires changing any data s/he can carry out the alterations and save and proceed. Once the individual income tax filer is completely in agreement with the returned income tax sheet then the individual would need to confirm. This would complete the income tax filing process and a mail would be sent to the individuals mail box address saved in the individual’s account information.

Changing Data Post Filing of Income Tax Return

The IT department also has provisions for changing data post the filing of income tax return. However it is suggested that tax payers should carefully revise the tax return sheet before clicking on the confirm tab so as save unnecessary hassle. The income tax filer has to log on to his or her account and access the link for making changes in income tax filed data. IT department allows certain time duration for filing the changes. Income tax payers can also file changes for previous year income tax filings.

To Sum Up…

Several changes affected by the Income tax department and the central government have led to improved filing of income tax return percentages and greater income tax collection by the IT department. The message is becoming clear to people that it is for their benefit to timely file their income tax returns and that people cannot evade their duties towards the nation. Factors leading to increased filing of income tax return include.

  • Digitization of Income Tax Processes
  • Online communication and promotion by IT department
  • Filing of income tax return has been simplified
  • Income tax exemptions and rebates announced through budgets
  • Public benefit schemes undertaken by government
  • Demonetization and digitization of monetary transactions
About Sashi 534 Articles
Sashi Singh is content contributor and editor at IP. She has an amazing experience in content marketing from last many years. Read her contribution and leave comment.

Be the first to comment

Leave a Reply

Your email address will not be published.