Filing for your ITR (Income Tax Return) is a significant financial task. You must ensure that you complete your tax filing cautiously and within the specified time. For FY 2019-20, the deadline for IT returns submission is November 30, 2020. You must go through the whole process prudently, to avoid any errors.
Precautions you must take while filing IT returns this year:
· Check all documents: Ensure you have all the necessary IT return documents. These include Form 16, salary slips, interest certificates, mutual fund statements, TDS (Tax Deducted at Source) certificates, rent receipts, etc. Verify all documents and every detail mentioned. This is of utmost importance since these files will determine your Gross Total Income and tax deduction made from your income in FY 2019-20. Be sure to submit all documents in the TRACES format with a digital signature.
· Analyse details of Form 26AS: Form 26AS is like a holistic summary of all tax cuts made from your income and deposited against your PAN during the financial year. Hence, you should ensure all Form 26AS information is accurate. Cross-check all facts with your TDS certificates. If there is any issue, approach the TDS collector and rectify the details. Registration of an incorrect Form 26AS will disable you from claiming any credit on the tax deductions against your PAN.
· Pre-compute your Gross Total Income: A step that most people do not follow is computing their Gross Total Income before filing IT returns. Once you have all documents, it is wise to estimate your taxable income for the specific year. When including earnings, be sure to mention income from all five sources, as specified by the Income Tax law. Claim deductions under appropriate sections to minimise tax liability. Once through, check which tax slab will be applicable given the income or use an online tax calculator to be more certain. This will help you know your tax liability and take any steps, if possible, to minimise the same.
· Assess the final tax payable and take action: Once you know the taxable income, you would need to add the interest payable according to Section 234A, 234B and 234C. If the final estimation of tax payable is more than ₹1 lakh, and you have not paid the same before July 31, 2020, you will be charged a penalty. Starting this process early on in the financial year helps to avoid such uncalled charges. Moreover, estimating the final tax also helps to know any excess tax paid, for which a return is to be requested.
· Choose the right forms and cautiously file your returns: Another precaution you must take when submitting income tax IT return is to choose the right forms. Each assessment year, the Income Tax Department publishes different forms to be used for filing taxes. These forms can vary as per age, income status, residential status, occupation and more. So, be sure to opt for the right one and file your tax returns cautiously. You can file for IT returns online or seek help from a professional chartered accountant to do it on your behalf.
· Double-check everything and verify your ITR: Before finalising your tax records, do a thorough double-check of all details. If satisfied, go ahead with electronic or physical IT returns verification. For electronic verification, you will not be required to send any documents to the tax department. However, in physical verification, you would need to send it to the official address of the Income Tax Department.
With all the above-mentioned precautions, you can correctly do your IT tax filing. Once the documents are approved, the Income Tax Department will process your return.