The last day to file Income Tax Returns for Assessment Year 2019-20 without paying a penalty is just around the corner. If you haven’t filed your returns yet, you’ll certainly be well-advised not to wait till the eleventh hour to avoid committing costly last-minute mistakes.
The fact is that several taxpayers file their ITRs days before the July 31 deadline, if not the last day itself. So, if you’re planning to take your ITR filing ‘down to the wire’, here are a few helpful tips to ensure it’s a smooth process.
1. Keep all documents handy
Not having all the key documents at one place is one of the main causes that result in mistakes while filing the ITR. So, before you sit for filing the ITR, ensure that all important documents like bank statements, Form 16, Form 26 AS, details of tax-saving investments, etc. are organised in one place.
2. Choose the right ITR form
Different ITR forms apply to different categories of taxpayers. The I-T Department has notified new forms for the AY 2019-20, so ensure you choose the right ITR form. While ITR 1 or Sahaj form applies to people with a salary income, ITR 2 applies to taxpayers with capital gains income and ITR 3 for taxpayers with business or professional income. Generally, ITR 1 to 3 apply to individuals while ITR 4 to 7 apply to business firms, trusts, associations, etc.
Also read | How to file your Income Tax Return online?
However, it’s not uncommon for taxpayers to pick a wrong ITR form in the last-minute rush. The Income Tax department does allow for a few days to rectify such errors. However, not amending the returns within the extra time provided by the I-T department can make it invalid and it may be considered as a case similar to not filing the ITR at all.
3. Report income from all the sources
A taxpayer may earn income from multiple sources, and it is important to disclose all types of income while filing the ITR. For example, a salaried person may get salary income along with income from bank interest, dividends, capital gains, and income from freelancing business, house rental property, so on and so forth. All such income should be adequately disclosed in the relevant ITR form.
Another point to note here is that some taxpayers earn exempt income; however, they should also show it in their ITR under the relevant space to avoid any query from the I-T department in the future.
4. Claim deductions not included in Form 16
There are some cases in which a taxpayer isn’t able to report details of tax-saving investments to the employer due to which they don’t get reflected in his/her Form 16. So, if you solely rely on your Form 16 to file your returns, you could easily miss out including such investments in the ITR. As a result, ensure you keep a list of any such deductions not reported in your Form 16 and claim it while filing the ITR.
5. Reconcile income with Form 26 AS
If the income mentioned by you in the ITR doesn’t match with the Form 26AS, there are chances of getting a query from the I-T department seeking a reason for such discrepancy. As such, verify properly before filing the ITR.
Usually, the difference may occur if the taxpayer forgets to include any income from other sources in the ITR. Sometimes, the TDS gets deducted but it doesn’t reflect in the ITR – things that can result in a mismatch. To avoid any mismatch in income, the best practice is to reconcile the Form 26AS beforehand. If you spot any discrepancy in terms of TDS amount in your Form 26AS, report it immediately to the company that has deducted the tax and get it updated immediately.
6. Keep GST return details ready
If you are a professional or a businessperson registered under the Goods and Services Tax, ensure you keep the GST details of FY2018-19 available while filing the ITR. Do note that you will have to report GST details of all your businesses. While filing the ITR, you will also have to provide turnover as reported under the GSTR. A mismatch between ITR and GSTR can result in a query from the I-T department. So, you should keep the GST turnover statement ready while filing the ITR.
Lastly, before submitting the ITR, do crosscheck all the details to avoid a mistake. If you have changed your contact number, email id, address or even your bank account, update them before filing the ITR; otherwise you may miss important updates (and even refunds, if any) from the I-T department.
If you think you’ll get stuck, it’s better to seek assistance from a tax advisor. But try to start the process as early as possible so that you’re left with ample time to make amends if necessary.
The author is CEO, Bankbazaar.com