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Income Tax Return filing for AY 2023-24: All you should know

Income Tax Return filing for AY 2023-24: All you should know

ITR (Income Tax Return) filing is an important annual activity for individuals and entities in India to report their income and pay taxes to the government. It is a process where taxpayers provide details of their income, deductions, and tax liabilities for a specific financial year.

Budget 2023-24: Next-Gen Common Income Tax Return Form To Be Rolled Out For Taxpayers. Details Here

Here are some critical aspects of understanding ITR filing:

  1. Who should file ITR: Individuals, Hindu Undivided Families (HUFs), firms, companies, and other entities that meet the specified income criteria are required to file ITR. The income threshold for filing varies depending on the taxpayer’s age, income sources, and residential status.
  2. Types of ITR forms: The Income Tax Department has designed different ITR forms to cater to different categories of taxpayers. These forms, numbered from ITR-1 to ITR-7, serve specific purposes and capture various sources of income. Individuals must choose the appropriate format based on their income sources and meet the eligibility criteria.
  3. Collecting necessary documents: Before filing ITR, taxpayers must gather relevant documents such as Form 16 (TDS certificate), bank statements, investment proofs, rental income details, and other supporting documents related to their income and deductions. These documents help in accurately reporting income and claiming eligible deductions.
  4. Reporting income and deductions: Taxpayers must provide a comprehensive income account from various sources, including salary, house property, capital gains, business/profession, and other sources. They should also report eligible deductions and exemptions under different sections of the Income Tax Act, such as deductions for investments, insurance premiums, medical expenses, and home loan interest.
  5. Calculating tax liability: Once the income and deductions are reported, taxpayers must estimate their tax liability based on the applicable income tax slab rates. It is essential to accurately compute the tax liability to avoid underpayment or overpayment of taxes.
  6. E-filing and offline filing: ITR can be filed electronically (e-filing) through the Income Tax Department’s official website or authorized e-filing portals. E-filing offers convenience, faster processing, and acknowledgement receipt. However, specific categories of taxpayers, such as super senior citizens (above 80 years) and individuals with income below a specified limit, can file ITR in paper format (offline filing).
  7. Deadline for filing: The due date for filing ITR varies depending on the category of taxpayers and the sources of income. Generally, the deadline for individual taxpayers is July 31 of the assessment year (e.g., July 31, 2023, for the financial year 2022-2023). However, checking the Income Tax Department’s notifications or consulting a tax professional for accurate and updated deadlines is advisable.
  8. Penalties for non-compliance: Failure to file ITR within the specified deadline may attract penalties and interest charges. It is essential to adhere to the timelines to avoid penalties and unnecessary complications.
  9. Importance of accurate reporting: ITR filing is not just a legal obligation but also an opportunity to ensure compliance with tax laws, demonstrate transparency, and contribute to nation-building through tax revenues. Accurate reporting helps taxpayers avoid scrutiny, notices, and potential legal consequences.ITR Filing For AY24: Avoid These 5 Mistakes While Filing Income Tax Return - News18

It is recommended to consult a tax professional or use reliable online resources for detailed guidance and assistance in ITR filing. Taxpayers should also keep track of changes in tax laws and provisions to ensure compliance and make informed financial decisions.

While filing the return of income, it is essential to take the following precautions:
  1. Download AIS and Form 26AS: Obtain the Annual Information Statement (AIS) and Form 26AS from the Income Tax Department’s website and reconcile the details of TDS (Tax Deducted at Source), TCS (Tax Collected at Source), and tax payments made. Ensure that the details mentioned in your return match the information in these documents.
  2. Consider all standard tax deductions: For taxpayers under the old tax regime, consider all eligible deductions under various sections of the Income Tax Act. These may include deductions under Section 80C (such as life insurance premium, ELSS investment, EPF contribution, home loan principal repayment), Section 80D (medical insurance premium), Section 80G (donations to specified institutions), and others. Review the specific limits and conditions associated with each deduction.
  3. Understand deductions under the new tax regime: If you opt for the new tax regime, be aware of the limited beliefs available, which include standard deduction from salary, employers’ contribution to PF, interest on home loan for the let-out property, and certain conditions related to gratuity and leave encashment.
  4. Select the most beneficial tax regime: Employees can choose between the old and new tax regimes yearly. In contrast, business/professional taxpayers can select the tax regime once. Carefully evaluate the impact of deductions and tax rates to choose the government with the most beneficial outcome.
  5. E-File the return of income on time: Ensure that you file your ITR electronically (e-filing) on or before the due date specified by the Income Tax Department. Late filing may attract penalties and result in the inability to carry forward losses.
  6. E-Verify the return: After e-filing your ITR, it is essential to e-verify it using any electronic verification methods provided by the Income Tax Department. This step completes the filing process and confirms the authenticity of your return.
  7. Maintain supporting documents: Keep a record of all supporting documents related to your income, deductions, and tax payments. These documents may include salary slips, TDS certificates, investment proofs, rent receipts, medical bills, donation receipts, and other relevant documents. Retain these documents for future reference or in case of any tax scrutiny.What is Income Tax Return? - Meaning and Benefits | HDFC Life
It is advisable to consult a tax professional or use reliable online resources for accurate and up-to-date information and guidance while filing the return of income.
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