In this blog there is information on points to keep in mind before filing ITR, What is Income Tax Return, and information on the necessary documents required for filing ITR.
The Income Tax Laws of India are drafted by the government. Individuals, Hindu Undivided Families (HUFs), corporations, firms, LLP, associations of persons, bodies of individuals, municipal authorities, and any other artificial juridical person are all subject to a tax imposed by the government on their taxable income. The amount of tax levied on a person is determined by his residency status under these regulations. Every person who qualifies as an Indian resident is expected to pay tax on their worldwide earnings. Taxpayers must follow certain regulations while filing their income tax returns each fiscal year (ITRs).
What is Income Tax Return (ITR)?
The Income Tax Return (ITR) is a form that is necessary to be filed with India’s Income Tax Department. It contains information on a person’s earnings as well as the taxes that must be paid on those earnings throughout the course of the year. An ITR must contain information for a certain fiscal year, which starts on April 1st and concludes on March 31st of the following year.
Important Points to Remember at the Time of Filing ITR
- Select the correct ITR Form
For different types of income, there are different ITR forms. It is critical to select the appropriate ITR form type based on the taxpayers’ income. Individuals having a salary income, residential property income (one house only), and other sources of income with a total income of less than Rs.50 lakhs can use ITR-1. Also, if you have capital gains income, you won’t be able to file an ITR-1. Similarly, there is a slew of other factors to consider while selecting the appropriate ITR. It’s possible that completing an incorrect ITR form will be considered a “defective return,” therefore it’s important too.
- Needs to disclose information of bank account
The ITR filing portal now asks the taxpayer to disclose all of his or her bank accounts. All sorts of accounts, such as savings accounts, accounts held with co-operative banks, all international accounts, current accounts, Non-Resident External (NRE) and Non-Resident Ordinary (NRO) accounts, and so on, must be listed. Dormant account information, on the other hand, does not need to be mentioned. To add these accounts, you’ll need information like the bank name, account number, and IFSC code. In addition, for a tax refund, taxpayers will have to choose one of these accounts. For seamless income tax refund processing, ensure the account details are pre-validated.
- Pre-filled ITR
The Internal Revenue Service has unveiled a new e-filing platform that includes pre-filled information for taxpayers. As a result, taxpayers must double-check the pre-filled information against the source documents and Form 26AS/AIS, and make any necessary adjustments or provide feedback for errors.
Advantages of Income Tax Return Filing
- Individual taxpayers must file a tax return by the due date to claim specific losses, such as losses from capital gains and business.
- Self-employed taxpayers, unlike salaried taxpayers, do not receive a Form 16 salary certificate as proof of income. As a result, for these self-employed taxpayers, the income tax return serves as proof of income, offering a detailed analysis of their earnings and expenses for any given fiscal year.
- When applying for a bank loan, the most useful document is the income tax return.
- Immigration officials want copies of prior tax returns when people plan to work or travel outside of India. ITR (Income Tax Return) proves as an useful source for an individual when going outside india for a work basis.
Errors Made at the Time of Filing ITR (Income Tax Return)
- Returns can be classed as faulty under section 139 (9) of the Act, and in some cases, the return can be considered valid or non-est. This notion is not being introduced by ITD to cover certain types of faults in order to prevent future grievances.
- Computation Faults – It has been observed that the majority of electronic filing errors are related to data errors submitted by the assessee. This includes not completing out crucial schedules, providing incorrect information, and others, resulting in correction requests and other delays in processing close.
- Inability to give the assessee any refunds.
Documents Required at the Time of Filing ITR (Income Tax Return)
Your employer will provide you a TDS certificate, which will specify the salary you were paid and any TDS that was deducted if any interest certificate from the post office and Banks.
- Form 16A
If tax deducted at source is deducted over the stipulated limitations on payments other than salaries, such as interest from fixed deposits, recurring deposits, and others, as per current tax legislation.
- Form 16B
If you have sold a property, from the buyer, state the TDS deducted from the amount received to you.
- Form 16C
from your tenant, in exchange for the details of any TDS deducted from the rent you receive, if any
- Form 26AS
Your annual tax statement, condensed contains all of the details concerning the taxes that have been deposited against your PAN.
- Banks deduct TDS
- Advance taxes submitted by you
- Your employer deducts TDS
- Self-assessment taxes paid by you
- TDS deducted from payments made to you by other organizations
- Investments that save you money on taxes
- Bank statement for a home loan
- Proofs required to claim deductions under sections 80D through 80U of the Internal Revenue Code (health insurance premium for self and family, interest on education loan)
Every individual needs to file an income tax return at the assessment year ending 31ST July. Leaving it till the last minute and then filing it in a rush can lead to the taxpayer disclosing erroneous information, which can negatively impact the outcome of the return filing. Returns can be filed either manually or online. In fact, beginning in the fiscal year 2016-17, e-filing of a tax return is mandatory.