New Delhi:
As the income tax return (ITR) filing deadline of 31st July approaches, it’s crucial to file your return promptly to avoid last-minute rush and potential errors.
Filing your return early can prevent issues such as website overload and mistakes that might lead to notices from the Income Tax Department.
This is especially important for taxpayers with multiple income sources, including salary, house rent, capital gains, foreign investments, and cryptocurrency gains.
Key Tips for Filing Your ITR
1) Disclose Foreign Income
Employees working abroad need to disclose foreign bank accounts and assets in their income returns. Failing to report foreign assets, including stocks allotted by a foreign company, can result in a penalty of Rs 10 lakh.
2) Match Form-16 and Form 26AS Data
Download Form 26AS and the Annual Information Statement (AIS) from the Income Tax Department website. Ensure that the TDS data in these forms matches your Form-16. This will help you verify information about dividends and high-value transactions.
3) Choose the Right ITR Form
Selecting the correct ITR form is essential. Using the wrong form can lead to rejection of your return. Choose the form based on your income sources, such as capital gains or foreign bank accounts.
4) Report Income from Previous Employers
If you have switched jobs, ensure you include income from all employers in your return. Use the information from both Form-16s to accurately declare your total income to avoid discrepancies.
5) Don’t Rely Solely on Form-16 Data
Form 16 may not cover all types of income and transactions. Include interest earned on savings accounts and capital gains from shares or mutual funds, as these are not reflected in Form 16 and are taxable beyond certain limits.
6) Avoid Claiming Wrong Deductions
Be cautious while claiming deductions. Only claim deductions you are entitled to, such as those under section 80G for charitable donations or section 80U for disability. Incorrect claims can trigger notices from the Income Tax Department.
7) Provide Correct Bank Account Information
Ensure your bank account is pre-validated to avoid issues with refunds. Validate the details of your bank account number, IFSC, and bank branch before submitting your return.
8) Verify Your Return
After submitting your ITR, verify it within 30 days using Aadhaar OTP, net banking, or other methods. Failure to verify within this period will result in the return filing date being considered as the date of verification, which could lead to penalties if done after the deadline.
