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Top 17 issues to consider While preparing Income Tax Return (ITR) for Businesses

1. Part A General is linked to many schedules and hence must be accurately filled. Inconsistency may result in incorrect processing or defective notice.

2. Status and sub-status of the entity need to be mentioned correctly in the ITR- Cooperative Society, Trust, Foreign Company, etc.

3. Receipts/income included in Schedule P&L, which pertain to other heads of income, need to be removed from BP and -offered in respective heads of income, including schedule El Exempt Income, if applicable.

4. Audit reports like Form 3 CD, uploaded by auditor, needs to be -approved by the Taxpayer without fail for it to be valid. Date of approval would be considered as date of filing.

5. The disallowances/amounts to be added back, mentioned in the return, should match with the corresponding entries in the tax audit report.

6. Ensure that corresponding Forms, duly signed by the Chartered Accountant, are filed in support of claims of deduction, exemption etc; wherever applicable.

7. Ensure that the nature of business codes are rightly selected and depreciation claimed accordingly, for accurate processing: The depreciation claim should be filled up in u/s 32(1)(i) only if the company/business entity follows a straight line method of depreciation.

8. In case of any special income chargeable at special rates or under DTAA, ensure that appropriate entries are made in Schedule CG/OS as well as Schedule SI.

9. As a general rule, ensure perfect consistency between various schedules which are inter-linked (Schedules that use Departmental Software are auto-linked).

10. Where deductions/exemptions are claimed, the respective schedule should be filled mandatorily.

11. For any carried forward figures, ensure that the figures reported in current year match with those of the previous ITR, if applicable. For eg: Closing stock of previous year should match the opening stock this year. Balance in Schedules MATC, Block of Assets and CFL etc should match the previous ITR.

12. In case of brought forward loss, ensure to fill the data correctly in Schedule CFL, in order to adjust the same with the current year’s income.

  • Date of ITR filing for its respective AY, where loss is claimed as carried forward, needs to be mentioned correctly and considered during set off correctly in ITR.

13. If MAT credit is being claimed, ensure to fill the Schedule MATC. Claim of MAT credit in ITR should be based on the processed information of relevant AY.

14. If any TDS is claimed in the currant year, it will be given credit only if the Car responding income is reported in the same year.

  • Avoid typographical errors in Schedule TDS, while entering TAN, Amount, TDS claimed in current AY, TDS Carried Forward, etc.

15. If any self-assessment tax is being paid, ensure to fill the details in Schedule IT after payment of tax.

16. The Bank account should be pre-validated, to avoid any delay in credit of refund.

17. Update contact details iike mobile number and email ID regularly in your e-filing profile page. CPC sends communication only through email/SMS.

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April 2024