With the Income Tax Department's data showing early filing of returns for AY 2022-23, taxpayers are taking proactive steps to comply with their tax obligations. However, some individuals may still encounter errors or mistakes during the filing process, leading to defective returns or delays in receiving refunds. To ensure a hassle-free income tax return (ITR) filing experience, taxpayers should be mindful of certain crucial aspects. Here are some key tips to avoid common errors:
1. Choose the Correct ITR Form
Selecting the appropriate ITR form is essential, considering factors like residential status, income level, and nature of income. Filing in the wrong form can render the return invalid, so accuracy in form selection is crucial.
2. Verify AIS and Form 26AS
Carefully review the Annual Information Statement (AIS) and Form 26AS to ensure that all income sources are accurately reported in the ITR. If any discrepancies are found, provide feedback through the portal and notify deductors to rectify errors.
3. Report Equity and Dividend Income
If you deal in shares, remember to include dividend income credited to your bank account. Accurate bank details are vital, and if you have incurred capital gains losses, report them to offset gains in future years. Even if your income is below the taxable limit but TDS has been deducted, file your return to claim a refund.
4. Provide Correct Personal Details
Be diligent in quoting Aadhar and correspondence details. Ensure accuracy when providing bank account numbers and IFSC codes to prevent delays in tax refunds.
5. Disclose All Income and Foreign Assets
Declare all income sources, regardless of whether they are taxable or exempt. If you are a resident and ordinary resident, disclose all foreign assets and income earned from abroad.
6. Pre-validate Bank Account
To receive Income Tax refunds, pre-validate your bank accounts.
7. Pay Attention to Minute Details
To file an error-free ITR, remember to provide accurate personal information, report all income sources correctly, claim eligible deductions with supporting documents, choose the right ITR form, cross-verify TDS details, keep records of tax payments, and review all details for accuracy.
8. File ITR within Specified Deadlines
Avoid penalties by filing your ITR within the prescribed deadlines.
9. E-verify ITR Promptly
Make sure to E-verify your ITR within 30 days from the date of filing to validate the return.
The due date to file ITR for AY 2023-24 (for non-audited accounts) is July 31, 2023. Filing early can help avoid last-minute rush and ensure a smooth refund process. Taking these steps will help taxpayers file their returns accurately and minimize the chances of receiving notices or facing delays in refunds.
The author is a Chartered Accountant with 2 decades of experience into Accounting, Taxation, Auditing, Risk & Compliance, Credit Controls, Due diligence. Currently, the author is the founder and managing partner at RRL Global services.
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