With some useful tips, taxpayers can ensure that their returns are filed accurately and they can also avoid potential queries from the income tax department, and other issues.
By Alok Agrawal
The fiscal year 2023-24 ended on 31 March 2024 and individual taxpayers are gearing up to file tax returns by the deadline of 31 July 2024. Over the past few years, the government has sought to improve the taxpayer’s experience by simplifying tax return filings through pre-filed ITR, etc.
With some useful tips listed below, taxpayers can ensure that their returns are filed accurately and they can also avoid potential queries from the income tax department, and other issues.
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1) Selection of correct ITR Form: – Using the correct ITR Form is crucial for accurately reporting of income and for claiming deductions and credits. The tax department may issue a notice of “defective return” to the taxpayer in case of such an incorrect selection. So, the appropriate ITR Form must be selected based on income sources, residential status and other criteria.
2) Selection of tax regime: – The Budget 2023 mandated the simplified tax regime as the default tax regime from FY 2023-24 onwards. If a taxpayer wishes to opt for the old regime, then there is an option in the ITR Form – “Do you wish to opt out of new regime?”, wherein “Yes” is to be selected. Tax calculators are available on the income tax portal for comparison and can assist in deciding which regime is beneficial.
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3) Reconciliation of income: – It is imperative to reconcile income details appearing in Form 16/16A, Form 26AS (tax credit statement), AIS (Annual Information Statement) etc., available on the income tax portal to ensure all sources of income are disclosed, else this may lead to interest and penalty.
4) Tax Collected at Source (‘TCS’):– TCS is the tax collected from the buyer on various expenses (car purchase, foreign trip, foreign remittances etc,).Details of TCS are available in Forms 26AS and AIS. Taxpayers must ensure that this credit is fully reflected as they are eligible to claim credit of TCS while filling the ITR Form.
5) Tax credit: – While filing ITR, taxpayers should ensure that taxes already deducted/paid are reported in Form ITR and only the balance tax liability is paid. As in the case of TCS, details of TDS, Advance tax and Self-assessment tax paid are also available in Forms 26AS and AIS. In order to get full credit for the relevant amounts, the taxpayer should mention details (i.e. TAN, date of deposit, Challan Sr. No etc) accurately in the relevant sections of the form.
6) Claiming Losses: – Taxpayer should claim all eligible losses incurred during the current and previous years, which can save taxes. Also, the unclaimed past losses which can be carried forward to next year, should be reported in the appropriate schedule of Form ITR.
7) Declaration of Foreign Assets: – Recently, there has been increase in notices issued to taxpayers to verify details of offshore investments. Hence, if you qualify as Resident & Ordinarily Resident (ROR) and have foreign assets, then it is essential to report such assets appropriately in the income tax return.
8) Bank Account details: – In case of tax refund arising in ITR, taxpayer should ensure that active and validated bank account details (i.e. account number, IFSC code, name of the bank etc) are accurately mentioned.
9) Adherence to deadline: – There are many consequences of not filing the return within the specified deadline such as late fees charges, penalty. Also, the simplified tax regime can’t be opted for and also capital losses can’t be carried forward, etc. So, one should always file the income tax return within timelines to avoid such implications.
10) Verification: – The final step after submitting income tax return on the portal is verification of the return within 30 days from filing the return. Verification can be done either through OTP on mobile number registered with Aadhaar or net banking or sending a signed copy of ITR-V to the CPC Bangalore office, etc. Without verification within the stipulated time, an ITR is treated as invalid.
(The author is Partner, Deloitte India)
Disclaimer: Views and facts expressed above are those of the author. They do not necessarily reflect the views of financialexpress.com.
