Points to be Considered at the Time of Filing Income Tax Return

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Points to be Considered at the Time of Filing Income Tax Return

Income tax is the tax to be paid by the taxpayer to the income tax department for the income that he earns. It often becomes a stressful situation for the taxpayers as they might get unnecessary notices about the same from the income tax department. The most common reason for this to happen is the mistakes done by the taxpayers while filling up the form of income tax.

 

Below mentioned points are to be considered at the time of filing the income tax return.

◆Improper selection of ITR form:
The taxpayers often commit mistakes in the selection of ITR form which adds on to their stress. A proper selection of form is necessary as under section 139(9), filling up the wrong ITR form would be treated as defective form.

◆Partial or non-payment of tax on interest:
Taxpayers think that TDS is directly deducted from the bank. But for the people belonging to the higher Tax slab, there is a 20% to 30% tax bracket that is bound to pay tax on the interest.

◆ Non-disclosure of income from interest:
If the taxpayer has earned interest from deposits of savings bank accounts or any other certificate, he needs to clarify this. The interest earned up to rupees 10000 is exempted yet it has to be shown.

◆ Mismatch of income in form 26AS, ITR, and TDS certificates:
If the income has shown is not identical in the above mentioned three documents than it would cause a problem for the taxpayer.

Time of Filing Income Tax Return

◆ Mandatory disclosures:
These disclosures are necessary to be disclosed before filing an ITR. For example, for the annual year 2020-2021, mandatory disclosures are disclosures of electricity consumption, cash deposits, foreign trips, etc.

◆ Nondisclosure of bank accounts:
It is mandatory to disclose all the bank account details in which the taxpayer is beneficiary or has signing authority.

◆ Mandatory to disclose exempt income:
All the incomes are to be specified clearly while filing and ITR. Be it tax-free bonds, agricultural income, PPF interest, etc., everything is to be shown.

◆Disclosure of tax benefits:
If the taxpayer is to earn tax benefits from the previous year, it is to be shown clearly. All the deductions claimed under any law are to be disclosed.

◆ Clubbed incomes:
Expiry often fails to disclose clubbed income this income is generally earned from the Investments made by multiple people. For example, an investment made in the name of a spouse or mother.

◆ Improper selection of assessment year:
The taxpayer needs to have clarity for which he is filing ITR. The year in which income earned in the previous year or financial year. Tax is paid in the assessment year.

◆ Proper disclosure of income from previous employers:
If the taxpayer has changed their job during the financial year, his employers would change. So details about both the employers should be properly disclosed.

Schedule of Assets and Liability:
The individual whose income is more than Rs. 50 lakhs is mandated to disclose all his assets and liabilities while filing income tax returns.

◆Proper disclosure of income from agriculture:
If income from agriculture exceeds five lakhs, then all the information regarding the same is to be disclosed. This information will include everything such as an address, irrigation type, ownership details, etc.

◆Buyer’s details:
If the taxpayer has sold any immovable property and has earned any capital gains, then in such case all the details regarding the buyer are to be disclosed.

◆Joint owner of the property or bank account:
The complete details of co-owners, their shareholding, and other necessary details like pan or Aadhar card details are to be shown.

◆ Non-verification of income tax return:
This is the final step after filing an income tax return it is to be done after 3 months of feeling income tax return if this step is not done the return will be treated as invalid there are various alternatives for verification of income tax return such as it can be done electronically by using OTP of Aadhar, sending the ITR-V to CPC, net banking or EVC.

Paying tax has become a cumbersome process and unnecessary notices can be a headache for taxpayers. In such a situation, filing for income tax without any mistakes, it has become extremely important. Also, the taxpayers are continuously monitored, so being careful while filing for ITR has become the need of the hour.

Further do ensure to reply to each mail of the department to answer so that  your refund is processed faster. As a press release of department said-

“A quick response from the taxpayer in this regard would facilitate the I-T Department to process their refunds expeditiously. Many taxpayers have submitted their responses electronically for rectification, appeal effects or tax credits. These are being attended to in a time-bound manner. All refunds have been issued online and directly into the bank accounts of the taxpayers,”

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