10 Things To Know Before Filing ITR
- 07-Jul-2022
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Bhubaneswar: With just a few days left for the ITR filing deadline to end, the taxpayers must have started filing their ITR. If you are an earning individual, then 31 July is the last date for filing an income tax return (ITR) for the financial year 2021-22 and assessment year 2022-23. The taxpayers are advised to file their ITR before the deadline to avoid last-minute hassles.
For filing of the ITR, the Income-Tax (I-T) Department provides pre-filled forms to make the filing of tax returns hassle-free. However, the taxpayers should keep all the documents handy while filing the return and cross-check every field in the pre-filled form.
If you are filing ITR for the first time, key things you need to keep in mind:
Correct ITR form selection:
It is always advisable to select the applicable ITR form depending upon the taxpayer’s residential status and income earned from various sources for an accurate filing.
Choosing between new tax Regime or old tax Regime:
Choosing the right tax regime is of great importance for business owners as they can do it only once. After they choose their tax regime, it cannot be changed. However, salaried individuals with income from salary, house and property can change it every year.
Pre-filled ITR Forms:
The Income tax department has introduced a new utility named JSON for pre-filling tax return forms for FY21. These pre-filling forms can import and pre-fill data from the e-filing portal. However, if the information is incorrect it may be advisable to reach out to the bank/ payor of income etc. to correct the data in their quarterly TDS returns/ other filings so that accurate information is resultantly reflected in your Form No. 26AS.
Verification of prepaid Taxes:
It is also crucial for taxpayers to verify their prepaid taxes including tax deducted at source, advance tax and self-assessment tax with Form 26AS. If there is any discrepancy then that should be notified either to the employer (in case of salary income) or other payers (in case of other incomes) or banks (for advance tax/ self-assessment tax payments) for necessary rectifications.
Payment of balance taxes
After the total taxable income is determined, post including income under all heads and claiming necessary deductions available under Chapter VI-A of the Act, applicable tax rates should be applied to compute the total tax liability. However, if there is any taxes due on the tax return after claiming credit of prepaid taxes should be paid including applicable interest if any before filing the tax return.
Disclosure Requirements
Disclosures of various assets and financial investments forms are an integral part of ITR filing:
# Specified details of all Indian bank accounts
# Specified details of unlisted equity shares
# Details of directorship held in Indian or foreign companies.
Balance Taxes Payment
To avoid any error, you must evaluate tax liability in advance and make the necessary tax payments within the due dates. This will help you avoid levy of interest applicable on delayed tax payments.
Reporting Exempt Income
The taxpayers also need to report the exempt income under ‘Schedule EI’ such as agriculture income, exempt income of minor child, income not chargeable to tax as per Double Taxation Avoidance Agreement, etc.
Change of Employment
If a taxpayer has furnished requisite salary, and income details earned from previous employer(s) to the current employer, a consolidated Form 16 and 12BA can be issued by the current employer basis which an ITR can be filed.
In case of missing ITR filing Deadline
If a taxpayer could not furnish the ITR by due date due to multiple reasons such as non-availability of relevant documents/ information, lack of time, personal exigencies, etc, there may be varied consequences under the Income Tax Act such as levy of late filing fee, payment of interest on balance tax liability, ineligibility to carry forward certain losses, etc. Make sure to file your return by the deadline.
