It’s often said that death and taxes are the two certainties of life. Going by that adage, the importance of filing your returns is paramount as it remains a constant part of our corporate life till we retire. Not filing your Income Tax Returns on time could land you in a hot soup, which may, in some cases, also involve monetary penalties.
Therefore, to ensure you file your returns in a timely and efficient manner, we have put together a list of the most important things you should keep in mind as you go about doing the task.
Preparing for an Income Tax Return:
One must be fully prepared before filing the ITR. All the documents must be accurate and complete. One might make mistakes while filing the ITR by putting incomplete and inaccurate information asked by the Income Tax Department.
Hence, every assessee should have documents related to income, investment, taxes payments, prepaid taxes, Form 26AS, various certificates on which deductions would be claimed, information about residential status, details of related bank accounts, assets, and more before filing the ITR.
Things to take care of before filing the ITR:
Clubbing Income: If there is any income of a minor child or spouse that is clubbed in the hands of the taxpayer, it must be disclosed in the form.
Interest Income from Savings Account and FDs: You must mention all the interest income from the savings account and FDs with the bank and post office while filing the ITR.
Non-reporting of Exempt Income: The details about the income earned during the previous year must be filled out in the ITR form. However, such incomes are exempted from tax. One must know that there is a separate schedule for reporting tax-exempt income in the ITR form.
Correct Bank Account Number: One must enter the correct account number while filing the ITR so that a refund can come automatically from the Income Tax Department.
Profit on sale of Jewellery, paintings, and more: The items such as Jewellery, archaeological collections, sculptures, drawings, paintings are counted as capital assets by the Income Tax Department. So, any monetary profit from selling such items must be mentioned in the ITR form.
Income where tax has been deducted: It is necessary to mention all the income, notwithstanding the fact that tax has already been deducted from such income while filing the ITR. One must mention all such deductions on the ‘Tax paid’ sheet in the ITR form.
Deduction for Investment claim: It is crucial for all the taxpayers to claim a deduction based on investment during the years in Section 80C, 80CCC, and 80CCD and Section 80D and 80DDB.
One must e-verify the ITR form within 120 days of the filing of ITR. If you fail to do so, a signed copy has to be sent to CPC, Bangalore within 120 days of the filing of ITR.