Filing your Income Tax Return (ITR) may seem daunting, but with a little preparation, you can make the process easier. Here is a concise guide to help you avoid common mistakes and ensure a hassle-free tax season for financial year 2023-24 (assessment year 2024-25).
1. Check the details of Form 16 and Form 26AS
Before getting started, download Form 26AS and Annual Information Return (AIS) from the IT department’s e-filing portal (revenue.gov.in). Make sure the details on these forms match your Form 16 and other financial records. Any discrepancies may result in a notice from the IT department.
2. Choose the correct ITR form
Using the wrong ITR form may result in improper disclosures and possible notices. For example, if you have capital gains but file under ITR-1 instead of ITR-2, you may face problems. Make sure you select the correct form for your financial situation.
3. Disclose foreign assets
If you have worked abroad and have foreign bank accounts, shares or other assets, make sure you disclose them in your ITR and Schedule FA. Failure to do so can lead to penalties of up to Rs 10 lakh and even legal action under the Black Money Act.
4. Claim only eligible deductions
Avoid claiming ineligible deductions. The IT department uses advanced technology to detect suspicious claims. Fraudulent deductions may result in penalties and warnings.
5. Report capital gains
The AIS and Form 26AS track all your transactions, so any unreported income, such as the sale of shares or mutual funds, will be noted. Be transparent to avoid non-disclosure notices.6. Preserve
6. Deduction documents
Keep all documentation for deductions, especially if you opted for the old tax regime. Discrepancies between Form 16 and your ITR may lead to notices, so be prepared to verify your claims.
7. Disclose income from previous employers
If you changed jobs, you will have dual Forms 16. Report income from both employers to avoid discrepancies that could lead to notices.
8. Apply early
Avoid the last minute rush. Applying early helps you avoid missing the deadline due to missing documents or technical issues on the IT department’s website. Filing after July 31 incurs late payment fees.
9. Complete e-verification
After submitting your ITR, complete the e-verification process using your Aadhaar, pre-validated bank account or demat account. Delayed verification may delay refunds and, if done after 30 days, may incur late payment fees.
