Filing income tax returns on time is vitally important for both individuals and the nation as a whole, as delayed filings incur penalties that can have serious financial repercussions.
Filing on time also allows taxpayers to claim deductions and exemptions that will reduce tax liabilities and maximize returns. Filing an ITR also supports visa applications by showing financial transparency.
Last date
The last date for filing income tax returns for FY23-24 (Assessment Year 2024-25) is July 31, 2024. That is the end of this month.
Taxpayers must remember their ITR filing last date in order to avoid penalties and legal complications, ensure compliance with tax regulations, and carry forward losses, thus lowering future tax liabilities. Furthermore, timely filing helps individuals qualify for third-party accident insurance benefits and speed up visa applications.
Based on your source of income, different Income Tax Return (ITR) forms must be filed. Usually, the first step in filing is gathering all essential documents like PAN card, Form 16, bank statements, investment proofs and property documents as well as proofs of tax payment. Once all this information has been filled in and filed out correctly, calculate how much tax is due before verifying your return.
ITR-1 is designed for individuals with one salary and one house property who qualify for 80TTA allowance and who claim deductions related to savings bank deposits, interest earned on savings deposits, and 80TTA tax relief for senior citizens. You should not use ITR-1 if you have multiple salary accounts or investments in shares; also not applicable if you serve on the board of directors in a company; furthermore filing it after its due date will incur penalty and interest on your total taxable amount due.
How to file
Filing an ITR is a complex and lengthy process, requiring accurate documentation. To ensure filing is done accurately and on time, professional tax consultants or accountants may be useful. Furthermore, it’s essential that all relevant documents remain safe and organized so they can easily be retrieved when needed.
Income Tax Department (ITD) has made ITR forms available for electronic filing on its website, ITRform2. Once logged onto the portal, select Form 2 from the available options before selecting your assessment year and providing all required details – from source of income verification, address confirmation and bank account numbers, to identity verification. You will also need to verify your identity along with providing other pertinent details such as sources of income verification as well as verification of details like source of income verification as well as bank account numbers and more.
Once all sections of your ITR have been completed, make sure that any figures entered are accurate, rounded off to the nearest rupee and include all sources of income such as salary, house property rental income and capital gains in its calculation. Also include in this ITR the total income and taxes payable for all sources such as salaries, house property rental income and capital gains.
If your expenses qualify as deductions under Sections 80 C, 80 CD, 80 CCB, GGA and TTA/80 TTB, subtract them from your gross income when calculating tax liability. Furthermore, list all taxable deposits made such as cash deposits, cheque deposits or bank draft deposits made.
What if we do not file?
If you fail to file an ITR by the deadline, penalties and restrictions could arise. Furthermore, an interest calculation calculated at 1% per month from when your taxes were due until when they are actually paid is required of you.
Late filers will be unable to carry forward certain types of losses – including business and capital loss deductions – beyond their tax year of filing, including business and capital loss deductions. Furthermore, tax authorities could apply greater scrutiny towards them which could lead to additional audits or inquiries.
As soon as you realize you must file a belated return, the first step should be gathering all relevant documents and selecting an ITR form based on your income sources and categories. The Income Tax Department website contains detailed instructions for selecting an appropriate form.
Individuals under 60 years of age who exceed the basic exemption limit (Rs 2.5 lakh in old regime and Rs 3 lakh in new regime) must file an ITR. Furthermore, individuals with specific sources of income such as interest, dividends, lottery winnings or rental income must also submit an ITR. Finally, bank deposits exceeding Rs 1 crore or foreign travel expenses require filing an ITR.
Mistakes to avoid
Mistakes when filing ITR must be avoided to avoid penalties and financial setbacks, including penalties and interest charges. Common mistakes to watch out for include:
Misuse of ITR Forms: There are different ITR forms tailored specifically for different individuals and selecting the incorrect form can cause errors in your return. Salaried individuals should use ITR 1, while self-employed individuals should utilize ITR 2.
Not Reporting Income Accurately: Reporting all sources of income accurately can save you from costly tax penalties; failing to properly account for savings accounts, FDs, and dividends can all count towards reporting these forms of income should it arise.
Correct Bank Details: For faster refund processing and pre-validating your bank account prior to filing, ensure your bank details are correct. Pre-verifying is also key.
Failing to Disclose Foreign Income and Assets It is absolutely crucial to disclose all foreign income and assets, including shares in overseas companies or income from abroad, for tax filing. Failing to disclose these details could have serious financial repercussions, including up to Rs. 5000 as penalties. Furthermore, reporting investment losses accurately is crucial; failing to do so could increase tax liabilities significantly while late filing reduces time available for revisions that could help mitigate penalties more quickly.
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