Each year, you need to file your income tax return before the prescribed due date if your gross taxable income exceeds the basic exemption limit. Today, with income tax e-filing, it has become easier to file ITRs online. In fact, most of your details are prefilled on the income tax e-filing portal. You just need to check your information and verify it is accurate. Then, you can fill in the other details needed, pay your taxes, if any, and submit your income tax return.
While the process is quite simple, there are some essential things to keep in mind while filing your IT return. Here are four such areas to consider.
Choose the right income tax form
Different income tax return (ITR) forms are available based on the nature of income that you have to declare. Choosing the wrong ITR form can make your return invalid. Here is a preview of the ITR forms prescribed for individual taxpayers.
|ITR Form||Whom is it for?|
|ITR-1||For resident individuals with a total income up to Rs.50 lakh, having income only from salaries, one house property, other sources, and agricultural income upto Rs. 5,000|
|ITR-2||For individuals and HUFs who do not have income from profits and gains of business or profession|
|ITR-3||For individuals and HUFs with income from profits and gains of business or profession|
|ITR-4||For resident individuals, HUFs and firms (other than LLPs) with a total income up to Rs. 50 lakhs, consisting of income from business and profession computed under sections 44AD, 44ADA or 44AE of the Income Tax Act, 1961|
Select the right income tax regime for yourself
You also need to choose between the old income tax regime and the new one. The new income tax regime offers concessional tax rates but fewer deductions and exemptions. The old tax regime, on the other hand, offers the usual deductions and exemptions. You can do a quick income tax calculation under both the regimes to check which one is more beneficial to you, and you can proceed with your income tax e-filing accordingly.
Typically, if you have many investments and/or expenses that qualify for the deduction, the old tax regime may suit you better. On the other hand, if you have no eligible deduction, the new tax regime may give you the advantage of lower tax rates.
Enter the correct bank account details
If the amount of tax you have paid through various channels like TDS (Tax Deducted at Source), advance tax and TCS (Tax Collected at Source) exceeds your total tax liability, you will be eligible for a tax refund. For this, it is essential to include your bank account details as a part of your income tax return. Ensure that you submit the right information and double-check the accuracy of your account number, bank IFSC and bank name so your refund is processed and received in a timely manner.
Ensure that you verify your return
The process of income tax e-filing does not just include income tax calculation, tax payment, and submitting the return. It is also important that you verify your return after you have filed it. ITR verification is the last step in the ITR filing process, and you must verify your income tax return within 120 days of filing it. Otherwise, your return will be considered invalid. Although, you can always request for rectification from the Income Tax Department.
You can e-verify your return using your Aadhaar or net banking portal. Alternatively, you can also send a signed physical copy of your ITR-V acknowledgement to CPC Bengaluru within 120 days of filing your return.
This sums up some of the important things you need to keep in mind while filing your income tax returns. As the world is going all digital, especially with web3 platforms and blockchain innovations at hand, it is quite crucial to understand and start using e-filing procedures for income tax payments. If you have any doubts regarding your income tax e-filing, you can always approach a tax professional and seek their expert guidance. That way, you can avoid making any mistakes that could lead to interest or penalties.