Income Tax Checklist FY 2019-20

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As you all know that the end of the financial year 2019-20 is approaching. 31st March 2020 is an important date to remember for individual taxpayers in India. This date is the deadline for finishing all your financial obligations. In this article, I will share the income tax checklist that you must complete before 31st March 2020 in order to save income tax.

Income Tax Checklist For FY 2019-20

Here is the list of few things which you must finish before 31st March 2020 to save income tax for FY 2019-20.

Linkage of Aadhaar with PAN Number

For filing an income tax return, the taxpayer must have linked his Aadhaar card with the PAN number. In the Union Budget 2020, the finance minister has declared that the linkage of Aadhaar card to PAN card is mandatory.

The taxpayer will not be able to submit his IT return if the Aadhaar number is not linked with the PAN number. If you don’t have a PAN number then don’t worry. Now you can get the instant PAN number through Aadhaar card. In the last 5 years, the Aadhaar card has become one of the mandatory documents a person should have in India.

So if you still have not linked your Aadhaar number to PAN number, please get the same done before 31st March 2020. Because after this date you will not be able to link the Aadhaar number with the PAN number.

Filing of Pending Returns

If you have not filed the income tax return for AY 2019-20, then do it before 31st March 2020. Because after that you will not be able to file the income tax return for AY 2019-20.

If you are thinking that you can file the income tax with the penalty after 31st March 2020, but you will not be able to do so even with the late penalties.

So it is advisable that you file your pending income tax before 31st March 2020.

Calculation of GST Turnover

Here you have to calculate the total turnover in the current financial year up to 31st March 2020 to determine the aspect of applicability of GST regulations. If your total turnover for the financial year crosses ₹ 20 Lakhs. So if your total turnover is crossing ₹ 20 lakhs in the current financial year you must calculate that to determine the GST tax liability and filing an appropriate return.

There are other factors that will also be decided based on this applicability like, you can opt for the GST composition scheme if your turnover is less than ₹ 1 crore. If your turnover is higher than ₹ 1 crore you will not be able to opt for the GST composition scheme.

Another factor that will be decided based on the GST turnover is the GST return filing. GSTR-1 is applicable where the turnover is higher than 1.5 crore, then monthly GSTR-1 return needs to be filed. Otherwise, you can file quarterly returns.

Minimum Investment in PPF

If you have a PPF account and want to take the tax benefit on the amount you have deposited in the PPF account during the financial year, then you must check that if you have invested the minimum investment amount of ₹ 500 in the PPR or not.

If you do not deposit ₹ 500 during the whole financial year, your PPF account will become inactive. you will also be not getting any tax benefits under section 80C of the Income Tax Act.

So if you have the PPF account then you must deposit at least ₹ 500 during the financial year. The last date for depositing in the PPF account is 31st March 2020.

Submitting Investment Proofs to your Employer

If you are a salaried person you must know that you need to submit all your actual investment proof to your employer so that your employer can calculate your tax liability on the salary paid to you and deduct the TDS accordingly.

If you don’t submit the investment proof to your employer, chances are there you may miss the benefit of tax exemption on your investment.

Every employer is asking the employee to submit the actual investment proofs before 31st March 2020. Usually, it starts in the month of January every year. You will get a message from your HR or finance department to submit the actual investment proof to calculate the tax liability.

Calculations of Deductions

You must know that there is a certain investment that is exempted from your taxable income. These are investments done under section 80C, 80D, 80G, Section 24, etc.

For example, the most common and widely used exemption is section 80C. Under this section, the taxpayer will get the tax exemption for up to ₹ 150000. There are various investment avenues like PPF, PF, LIC premium, Home loan capital amount, Tuition fees, ELSS mutual funds and so on.

Calculate the amount that it should reach to its capping level of ₹ 150000 in order to get the tax exemption on your investment.

This investment needs to be done on or before 31st March 2020 in order to get it eligible for the tax exemption.

Investment Planning to claim deductions

There are various investment options to claim exemption and deduction along with the opportunity of earning returns on that investment. For example, you can invest in the ELSS mutual fund to get the tax benefit under section 80C. At the same time, you will earn the returns on your ELSS mutual funds.

Selecting the right mutual fund scheme will decide how much return you will get on your investment along with the tax benefit. Mind it, that this investment needs to be done before 31st March 2020 in order to get the same eligible for an exemption for the current financial year.

Check your Form 26A

Form 26A is the statement showing TDS and TCS amount deducted from your income. This is a consolidated statement that shows all your income from all the sources.

So if you have forgotten to consider any of the income in your tax calculation, you can check in this statement. Such income is like earning interest in the fixed deposits.

FAQs – Income Tax Checklist

How to calculate income tax amount?

Consider your gross income in hand and deduct various exemption which is allowed as per the Income Tax Act. There are various online tools that can help you to calculate the income tax amount.

Under how many heads the income of a taxpayer is classified?

Section 14​ of the Income-tax Act has classified the income of a taxpayer under five different heads of income, viz.:
Salaries
Income from house property
Profits and gains of business or profession
Capital gains
Income from other sources​​

Can I claim a deduction for my personal and household expenditure while calculating my taxable income or profit?

No, you cannot claim the deduction of personal expenses while computing the taxable income.
While computing income under various heads, the deduction can be claimed only for those expenses which are provided under the Income-tax Act.

Is E filing mandatory?

No, it is not mandatory, you can submit your income tax return at the income tax office nearby.

For how long should I keep my return documents with me?

As per the income tax act, the taxpayer has to retain the income tax filing documents for 7 financial years.

What is form 16?

Your employer gives you form 16 as a proof of TDS (Tax Deducted at Source).

Conclusion:

So here is the Income-tax checklist for FY 2019-20. Ensure you have completed all the above activities in order to get the maximum tax benefit for the current year.

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