As the year draws to a close, taxpayers are reminded of the impending deadline for filing their Income Tax Returns (ITR) for the past three years. The last date for filing ITR for the assessment years 2020-21, 2021-22, and 2022-23 is fast approaching, with December 31, 2023, being the final day to submit these returns. This article highlights the significance of filing ITR within the stipulated time frame and offers guidance on the process.
Filing income tax returns is not just a civic responsibility but also a legal requirement. The Income Tax Act of India mandates that individuals, including salaried employees, business owners, and professionals, file their ITR within the specified deadlines.
Failing to file your ITR on time can result in penalties and interest. The Income Tax Department imposes penalties for late filing, which can be a financial burden on taxpayers. Timely submission helps in avoiding these unnecessary additional charges.
A consistent history of filing ITR enhances an individual’s financial credibility. Financial institutions often require ITR documents when processing loan applications, and a timely filing reflects financial responsibility and stability.
Timely filing of ITR is crucial for those who are eligible for income tax refunds. If you have excess tax deducted at source (TDS) or have made advance tax payments, filing your returns promptly ensures a timely refund, preventing any delays in receiving your money.
When filling an Income Tax Return (ITR) or updated Income Tax Return (ITR) for Previous Years, it’s essential to pay attention to various details to ensure accuracy and compliance with tax regulations. Below are some important points to consider:
Selecting the Correct ITR Form:
Use the appropriate ITR form based on your sources of income, residential status, and other relevant factors. Different forms cater to different types of taxpayers.
Disclosure of All Income:
Include all sources of income, such as salary, business income, rental income, capital gains, and any other income earned during the financial year.
Verification of Personal Details:
Double-check and update personal information like name, address, PAN (Permanent Account Number), and contact details. Ensure that the details match those in your PAN card.
Bank Account Details:
Provide accurate bank account details for receiving any tax refunds. The Income Tax Department increasingly emphasizes pre-validation of bank accounts for refunds.
Claiming Deductions and Exemptions:
Ensure that you claim all eligible deductions under various sections of the Income Tax Act, such as 80C, 80D, 80G, etc. Provide necessary documentary evidence if required.
Reporting of TDS and Other Taxes Paid:
Report all taxes deducted at source (TDS) and other advance taxes paid during the financial year. Cross-verify the details with Form 26AS, which is available on the Income Tax Department’s website.
Verification of Form 26AS:
Check Form 26AS for any discrepancies in the TDS details. It is advisable to reconcile the TDS mentioned in your Form 16/16A with Form 26AS.
Accuracy in Filling Financial Details:
Ensure accuracy in reporting financial details, such as income, deductions, and exemptions. Any discrepancies may lead to scrutiny or additional tax liabilities.
Reconciliation of Income with Form 16/16A:
Reconcile the income details provided in your ITR with the figures mentioned in Form 16 (for salaried individuals) or Form 16A (for income other than salary).
Capital Gains Reporting:
If applicable, accurately report capital gains from the sale of assets. Different types of capital gains (short-term, long-term) are taxed at different rates.
Maintain Proper Documentation:
Keep all relevant documents, including Form 16, investment proofs, bank statements, and other supporting documents, for future reference or in case of an audit.
Advance Tax Payment:
If you have income on which TDS is not applicable, ensure that you pay advance tax if your tax liability exceeds Rs. 10,000 in a financial year.
Filing within the Due Date:
File your updated ITR within the specified due date to avoid penalties and interest. The due date varies based on the type of taxpayer and other factors.
Digital Signature or Aadhaar OTP:
Choose the appropriate method for verifying your ITR, either through a digital signature or Aadhaar OTP (One-Time Password).
Consultation with a Tax Professional:
If you find the tax filing process complex or have intricate financial situations, consider seeking advice from a tax professional to ensure accurate filing.
Collect all relevant documents, including Form 16, salary slips, bank statements, investment proofs, and any other income-related documents.
Choose the Right Form:
Depending on your income sources, select the appropriate ITR form. Forms such as ITR-1, ITR-2, ITR-3, etc., cater to different types of taxpayers.
Use Online Platforms:
The Income Tax Department has made the process of filing returns convenient through online platforms. Utilize the official e-filing portal or authorized intermediaries to submit your returns.
Verify Aadhaar and PAN:
Ensure that your Aadhaar and PAN details are accurate and linked. This is crucial for the e-verification process.
Check for Updates:
Stay informed about any changes in tax laws or filing procedures. The Income Tax Department may issue notifications or updates, and it’s essential to be aware of these changes.
Conclusion: Filing your Income Tax Returns for the past three years before the December 31, 2023, deadline is not just a regulatory requirement but a prudent financial practice. It helps you avoid penalties, maintain financial credibility, and ensures that you receive any eligible refunds in a timely manner. Take the necessary steps now to fulfill this obligation and start the new year on a financially responsible note.