With July 31 – the last date for filing tax returns fast approaching filing your income tax return (ITR) can feel both overwhelming and stressful, especially if you're running late. To avoid penalties and unnecessary legal consequences from a rushed misreporting, it's therefore essential not to procrastinate. However, even if you haven't filed your return yet, you needn’t worry. Here's a list of few simple points to help you file your return appropriately.
1. Calculate your taxable income accurately
Make sure you don't overlook any other sources of income apart from salary or business income, such as interest income from savings accounts & fixed deposits, capital gains, dividend income, rental income, income from foreign assets etc. Moreover, remember to report any capital losses from investments, as they can be utilised to offset against other gains, reducing your taxable income. Keep in mind that any unadjusted losses can be carried forward for up to eight financial years. To calculate your capital gains or losses, refer to the capital gains statement provided by your stockbroker and mutual funds.
2. Report all your claims and deductions properly
Ensure you claim all available deductions under different sections of the Income Tax Act, such as Section 80C, 80D, and 80G, to reduce your tax liability. Don't miss exemptions like savings bank interest of up to Rs 10,000 and deductible expenses like preventive health check-ups up to Rs 5,000.
3. Verify Form 26AS and Annual Information Statement (AIS)
These documents are crucial for tax filing. Both these documents can be accessed from the Income Tax Department's e-filing portal. Form 26AS, also known as a tax passbook, contains information on the tax deducted at source (TDS), tax collected at source (TCS), high-value investments, details of any property purchase etc. Annual Information Statement (AIS) is an extension of Form 26AS and additionally includes interest, dividend, securities/ mutual fund transactions, foreign remittance information, etc. Ensure all details mentioned in these documents tally with your Form 16, bank account statements and other financial records to avoid rejection from the IT department.
4. Select the correct ITR form
The IT department has introduced several income tax return forms, namely ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, and ITR 7. The choice of the appropriate form depends on your income source, earnings, and taxpayer category. For example, ITR 1 is suitable for individuals with a total income of up to Rs. 50 lakh, earning from salaries, one house property, other sources (such as interest), and agricultural income up to Rs. 5,000. ITR 2 is for individuals and Hindu Undivided Family (HUFs) who do not have income from profits and gains of business or profession. ITR 3 is meant for individuals and HUFs with income from profits and gains of business or profession.
Also Read: [ 10 documents to keep ready when filing your income tax returns]
5. Gather all necessary documents
Maintain proper record of all documents such as PAN card, Aadhaar card, Form 16, Form 26AS, AIS, TDS certificates, advance tax payment receipts, investment proofs etc. Keep all these documents handy to avoid last minute hiccups while ITR filing.
6. Ensure your bank account details are correct
Double-check and pre-validate your bank account details to ensure timely credit of any tax refunds you may be eligible for. Any error in bank details will delay the credit of refunds.
7. Don't forget to verify your ITR to complete the filing process
After submitting your returns, don't forget to complete the filing process by verifying your ITR within 30 days. You can do online verification using Aadhaar OTP or offline by sending a signed ITR-V form (acknowledgment form) to the IT department's central processing center in Bengaluru.
By following these essential tips, you can make the ITR filing process smooth, hassle-free, and error-free.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision
