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The process of filing income tax returns has been a confusing subject for many people for several years. If you have often found yourself struggling to file your returns before the deadline, we’re here to help. Have a look at some important things to keep in mind while filing your tax returns.
1. Collect the required documents
To file your returns, you require many documents, including bank statements, proof of investments and Form 16, challans of advance tax paid, and home loan certificates.
2. Select the appropriate IT return form
Depending on your sources of income, you will need to select the right type of form. This is the most crucial aspect of the entire process. Different ITR forms have been prescribed by the Income Tax Department to file returns. Check the requirements and ensure that you choose the right form.
3. Verify Form 26AS
Form 26AS serves as your tax credit statement. Before filing your ITR, it’s necessary that you verify Form 26AS. This provides details of the income tax paid and the taxes deducted and deposited by the income tax payer. In case of any mistakes, one must verify the same.
4. Mention claim deductions and loss return
All deductions must be claimed. Fill all relevant information as required at the time of filing your returns in the form. Missing out on any one can result in a higher tax liability. If there is a loss return, it should be claimed and the return filing should be done within the due date as prescribed under section 139 (1), or else the loss under the specified head will not be carried forward.
5. Disclose exempt incomes
Exempt income should be disclosed in your income tax returns form. This could include earnings from dividends, PPFs and interest, which are not taxable.
6. Provide details of foreign assets
You must also provide details of all foreign assets you hold. You will have to provide details about:
- Foreign bank accounts with the peak balance during the year
- Any assets held, with total investment at cost
- Immovable property with total investment at cost
- Accounts in which the person has signing authority and has not been included above. Name of the institution in which the account is held, address of the institution, name mentioned in the account and peak balance or investment during the year.
7. File on time
To avoid any penalties, it’s always a good idea to file your returns before the cut-off date. Timely filing of returns ensures faster processing of ITR and quick refunds, if any. Instead of manual filing, you can opt for online filing, which makes the process much easier and quicker. Also, individuals and HUFs having a total income exceeding Rs. 10 Lakh, and those who have foreign assets to report have to compulsorily file their ITR online.
8. Sign your ITR acknowledgement
An ITR can be filed with or without a digital signature. In case of filing returns without digital signature, an ITR-Verification (ITR V) is generated after filing of the ITR which should be signed and posted to the CPC.
9. Maintain the documents as proof
An ITR-V/ITR acknowledgement and ITR-V receipt should be collected and retained (for further use) as proof that you’ve filed your returns.
Now that you know everything on this topic, we want to ask, have you planned your investments yet? Tax savings are an important aspect of your financial goals and objectives. There are numerous arenas to invest in such as home loans, health insurance, ULIPs etc. So, if you haven’t planned yet, let us help you do the same.
You can also claim tax deductions on personal loan also under some conditions.
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