The income tax return (ITR) deadline for fiscal year 2021-22 and assessment year 2022-23 is July 31. As a result, the majority of taxpayers are in the process of filing their ITRs. Tax returns should be filed as soon as possible to avoid any potential last-minute complications.
While the Income Tax Department provides pre-filled forms to make it easier for salaried individuals to file their returns, taxpayers should also keep all required documents on hand and cross-check each field in the pre-filled forms.
Meanwhile, those filing their first ITR should keep the following points in mind:
(1.) Select the correct ITR form: For accurate filing, choose the appropriate form based on your residency status and income earned from various sources. If you file your return on the incorrect form, it will not be processed, and the tax department may send you a ‘defective return notice.’
2.) New versus old tax regimes: Once chosen, the tax regime cannot be changed by business owners. Individuals with salary, house, and property income, on the other hand, can change their tax regime every year.
The Income Tax Department implemented a new optional tax regime with modified tax slabs and rates through Finance Act 2020. Those who choose the new regime, however, will be denied exemptions and deductions.
(3.) ITR forms that are pre-filled: Personal information, salary, dividend income, interest income, capital gains, and so on are all pre-filled. If the information is incorrect, it is best to contact the bank/income payer so that the correct details are reflected.
(4.) Verifying prepaid taxes: It is critical to verify prepaid taxes, which include TDS, advance tax, and self-assessment tax. Any inconsistency should be reported to the employer (for salary income), other payors (for other income), and banks (for advance tax/self-assessment tax payments).
(5.) Payment of balance taxes: After determining total taxable income, apply applicable rates to calculate total tax liability. Before filing the tax return, any taxes owed after claiming credit for prepaid taxes should be paid, including any applicable interest.