10 Essential Guidelines for Filing Income Tax Returns

Income Tax Returns

For salaried individuals and those whose accounts aren’t subject to audit, the deadline for submitting income tax returns for the financial year 2023-24 (Assessment Year 2024-25) is July 31, 2024. The government has implemented several measures to simplify the tax filing process for taxpayers. Here are some key initiatives:

  1. Pre-filled ITRs: Tax return forms are automatically populated with data from employers, banks, and investment entities, saving time and reducing errors.

  2. Streamlined ITR Forms: Forms like ITR-1 (Sahaj) and ITR-4 (Sugam) cater to individuals with straightforward income sources, making the filing process simpler.

  3. Online Submission: The Income Tax department encourages online filing, offering convenience and reducing paperwork.

By following these tips, taxpayers can ensure accurate return filing, minimizing queries from the tax department and avoiding related issues.


Selecting the Right ITR Form

Choosing the correct ITR form is crucial for accurate tax filing. It helps in precise income reporting, claiming eligible deductions and tax credits, and avoiding defective return notices. Factors affecting the choice include:

  • Income Sources: The type of income (salary, business income, capital gains).
  • Residential Status: Your status as a resident, non-resident, etc.
  • Other Considerations: Type of business, foreign income, agricultural income
Income Tax Returns

Commonly used forms include:

  • ITR-1 (Sahaj): For residents with income from salary, one house property, pensions, interest, and agricultural income up to Rs. 5000.
  • ITR-2: For residents and HUFs with income from capital gains, business, foreign income, and multiple properties.
  • ITR-3: For individuals and HUFs in business or professions.

Choosing the Right Tax Regime

From FY 2023–24, the streamlined tax system (new tax regime) became the default. Taxpayers can opt out of the new system via the ITR form. The Income Tax Department’s website offers tax calculators to help determine obligations under various regimes, aiding in selecting the most beneficial one.

Income Reconciliation Before Filing ITR

Reconcile your income to ensure accuracy and completeness. This involves:

  1. Collecting Documents: Obtain AIS, Form 26AS, and Form 16/16A.
  2. Comparing Revenue Sources: Compile all income sources.
  3. Cross-checking Amounts: Verify income amounts across documents.
  4. Identifying Discrepancies: Investigate and clarify any inconsistencies.
  5. Reporting Missing Income: Ensure all income is reported to avoid penalties.

Entering TCS Details

Tax Collected at Source (TCS) must be accurately reported. Verify TCS details on Form 26AS and AIS, and claim credit for TCS deductions to avoid double taxation and potentially qualify for a refund.

Minimising Tax Credits While Filing ITR

Accurately report tax credits (advance tax, self-assessment tax, TDS, TCS) to ensure you only pay your net tax liability. Ensure consistency between Form 26AS/AIS and personal records.

Claiming Past Losses

Utilize eligible losses to reduce your tax burden:

  • Tax Advantage: Offset taxable income with business, capital, and other losses.
  • Current and Prior Year Losses: Claim current and eligible unclaimed past losses.
  • Carry Forward of Unutilized Losses: Report unutilized losses to use in future years.

Declaring Foreign Assets

Indian taxpayers who are residents or ordinarily residents must disclose foreign assets and income. Non-disclosure can lead to fines and legal action. Use Schedule FA in the ITR form for this purpose.

Submitting Correct Bank Account Details

Ensure accurate bank account details in your ITR for potential refunds. Provide the account number, IFSC code, and bank name. Pre-validate your bank account through the Income Tax Department’s e-filing portal.

Filing Your ITR Before the Deadline

Timely ITR filing avoids:

  • Financial Fines: Avoid late filing fees and fines.
  • Loss of Tax Benefits: Ensure you claim all tax breaks and carry forward losses.
  • Delayed Refunds: Prevent delays in receiving refunds.

Verifying Your ITR Details

After filing, verify your ITR within 30 days via Aadhaar OTP, net banking, or sending a signed ITR-V form to CPC Bangalore. Prompt verification ensures smooth processing and avoids complications.

While many are familiar with basic procedures, organizing income-related documents and claiming all eligible deductions is crucial. For comprehensive information and specific requirements, refer to the Income Tax Department website or consult a tax professional.

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