ITR Filing for A.Y -2023-24 are going to start soon. Filing income tax returns (ITR) can be a difficult and boring task for many individuals, especially if they are not familiar with the process. However, failing to file ITRs or submitting incorrect information can result in receiving notices from the Income Tax Department, causing undue stress and anxiety. To help you avoid such situations, we have compiled a list of points to consider while filing ITRs.
Verify the correct ITR form
There are different ITR forms available, depending on your income source, the amount of income earned, and your filing status. It is essential to select the correct ITR form based on your individual circumstances to avoid errors
Ensure all income sources are accounted for
Many individuals have multiple sources of income, such as salaries, investments, rental income, and so on. It is crucial to report all income sources correctly in the ITR form and avoid any under-reporting, which can result in receiving notices from the Income Tax Department. In major cases, it was observed that, an assessee has multiple bank accounts and on which they are earning interest income, however, due to ignorance, they failed to report interest income from all bank accounts.
Verify TDS details
Tax Deducted at Source (TDS) is the amount that has been deducted from your income by the payer, such as your employer or bank, and paid to the government. It is necessary to verify that the TDS details mentioned in your Form 16 or Form 16A match with the details mentioned in your ITR form. While filing ITR, you must ensure that, you can report correct TAN Number of deductor, in case of mismatch you will receive, demand notice from Income Tax Departments.
Take Professional Help
After the boom in Indian Stock Market, many individuals has invested their money in Stock market, in which either they earn profit or face losses. Please note that, you have to report all these transactions in your ITR. Because, Depositories has to report these transactions to income tax department and if you fail to report these transactions in your ITR, then it may invite notice from Income Tax Department. These processes require adequate knowledge to correctly calculate Capital gain / Loss. If you are aware about these processes then you can file your ITR by yourself. If you have any doubts then you must take professional help. A small mistake may cost you high.
Choose Old Tax Regime or New Tax Regime Wisely
In current year, we have 2 ways to calculate our tax liabilities. Both regimes have their own benefits and disadvantages. While filing ITR, we must calculate tax liability from both option and choose the one which is beneficial for us.
Claim deductions appropriately
Individuals are eligible for various deductions under the Income Tax Act, such as deductions for investments made under Section 80C, health insurance premiums under Section 80D, and so on. It is essential to claim these deductions appropriately and maintain supporting documents wherever required. And do not take fake deductions. In recent cases, many bogus political parties were found who are providing fake deductions. If they are caught by department then all chain will be caught by department so be aware about it.
Reconcile with Form 26AS/ AIS/ TIS
Form 26AS/ AIS/ TIS is a statement that reflects all the taxes paid by you, SFT transactions that are reported by external parties including TDS and advance tax. It is essential to reconcile the tax details mentioned in your ITR form with the tax details mentioned in your Form 26AS/ AIS/ TIS to avoid any discrepancies.
Report foreign assets/income
If you have any foreign assets or earn any foreign income, it is necessary to report them in your ITR form as per the guidelines mentioned by the Income Tax Department.
File ITR within the due date
It is essential to file ITR within the due date to avoid paying late filing fees and interest. It is also recommended to file ITR early to avoid any last-minute rush and errors.