Things to Remember While Filing ITR

Introduction:

The Income Tax department has a new virtual address, www.incometax.gov.in. The objective of revamping the portal in June 2021 was to make the income tax filing experience easy and hassle-free. Some of the new features include a single dashboard for all interactions for ease of follow up, free of cost ITR filling software and integration for the prompt processing of income tax returns to issue quick refunds. Taxpayers can now also proactively fill in their income details that will be imported to pre-fill the ITR forms.

At your end, the following points will come in handy while filing your income tax returns online:

making an informed choice- The Finance ministry announced a new concessional tax regimen from FY21. Individuals have to decide whether they wish to follow the old tax regimen or opt for the New one. If you want to enjoy a lower tax rate without being given any leeway to reduce your tax burden, the new regimen is for you. As you may already know, the old tax regimen operates at higher rates, but it allows taxpayers to reduce their overall tax burden by claiming refunds. You should have made this choice before you sit down to complete the filing process.

Picking the form right for you- Pick out the correct form to fill from the Income tax portal while filing your ITR. The form you choose will depend on whether you are an individual, HUF, a partnership firm or an LLP. As part of the revamp, the Income Tax department has introduced a new JSON feature for filing tax return forms for FY21. In the first phase, only tax return forms ITR 1, 2 and 4 have been released. One of the new features added ensures that these forms can be pre-filled using the individual's details and income tax.

Additional Read: All about Income Tax in India: Basics, tax slabs and e-filing process

Double-checking details- Double check all essential information like PAN No., bank account details, communication address while filing your income tax return.  Appropriate care should be taken while filling in the address. You will get notices and other communication from the tax authorities to this address. If you are expecting a refund, the bank account number where you need the refund credited must be filled in accurately, including details such as MICR code for an electronic transfer of the refund. Any mistake in providing the personal or bank details will affect the smooth refund process, and retracing steps will be an unnecessary waste of time.

Reporting accurately: Gather the all necessary information and documentation required for ITR filing in advance so that you don't need to go back and forth for information to be filled in the ITR process. Having this information handy during filing ensures zero error in the filing process. It is also essential to duly report all sources of income, including the exempt income such as PPF for the ITR. Before filing the income tax return, match all payment sources with the data reported in the ITR form. That will help in the hassle-free processing of tax returns. It is also advisable to evaluate tax liability in advance and make the necessary tax payments within the due dates. Otherwise, you will pay interest on delayed tax payments.

Sticking to the deadline: The deadline to file ITR for 2020-2021 is 30th September 2021. To avoid paying the late fee of Rs.5000 for belated filing, you should make sure that you file your returns before the extended due date of 30th September 2021.

Additional Read: What are the Benefits of Filing Income Tax Return on Time?

Conclusion:

Attention to detail is essential while filing your ITR. That includes choosing the relevant tax regime to fill the proper form to enter the personal and financial information accurately. All of that matters to ensure that you get your refunds without any hassles. 

Disclaimer

ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470.  Please note, filing of tax related services are not Exchange traded products and I-Sec is acting as a distributor to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.