Here are 7 steps to help you file your tax return smoothly
Obtain Form 16 from your employer
If you are an employee, the first step for you will be to obtain Form 16 or 16A from your employer. Tax forms now require the taxpayer to detail his gross salary by mentioning the various income items. You should mention base salary, HRA and other allowances, such as LTA, uniform allowance, etc. In many cases, the Form 16 will not offer a detailed breakdown, but will only give a gross salary. upside down by subtracting the amounts claimed for various exemptions from the gross salary and then declaring the balance as his base salary. Make sure the final wage income matches that on Form 16 or 16A.
Check TDS details,
Form 26AS contains details of all payments made to you and to the TDS on those payments. This includes TDS on deposit and bond interest and dividend income. It will also contain details of taxes collected at source (TCS). TCS is levied on certain transactions, including the transfer of money abroad or the purchase of foreign currency. This TCS can then be adjusted in relation to your tax liability. You can access your Form 26 AS either via the tax administration portal or via your Net banking account to check whether the TDS and TCS deductions are correctly mentioned there.
Get capital gains statements
If you have invested in stocks and mutual funds, you should also obtain a capital gains statement from your broker and mutual funds. Long-term gains over Rs.1 lakh from stocks and equity-oriented funds are taxed at 10%, while short-term gains are taxed at 15%. The tax rate is higher and the tax calculation is much more complicated for non-equity funds and other assets, such as gold and real estate. Short-term gains are added to income and taxed at normal rates, while long-term gains are taxed at 20% after indexation.
ITR Filing: Five Common Mistakes a Taxpayer Should Avoid
Few reasons why filing an ITR matters even if the annual income is below the threshold of Rs 2.5 lakh
Include interest on deposits and bank balance
Many taxpayers do not report other income, including interest on deposits and savings accounts, on their tax returns. There was a time when they could get away with it if they managed to avoid TDS by spreading deposits across multiple banks. This is no longer possible. “The AIS has details of all earnings of a PAN cardholder.
Provide details of foreign assets, income
Foreign assets are indeed a minefield littered with potential tax errors. All foreign assets including foreign bank accounts, financial interests, real estate, accounts over which an individual has signing authority and any other capital held by the individual outside India must be declared in the tax return, regardless of the individual’s total income.
Check deductions, exemptions in final form
Once you’ve filled in all the details, don’t be in a rush to submit your return. Filing the tax return has become easier in recent years, thanks to pre-filled forms and the integration of information from various sources. Even so, many taxpayers have noticed discrepancies in AIS and problems with tax filings.
Check tax returns
The tax return process does not end with the submission of the ITR. A crucial step remains to be taken. After submitting your return, you must verify it within 120 days. If not verified within this time, the declaration becomes invalid and you may be assessed a penalty for non-filing.