As the July 31 deadline for filing income tax returns (ITR) for assessment year 2022-23 (financial year 2021-22) for individuals/HUFs nears, taxpayers must collect all relevant documents such as Form 16, TDS certificates, capital gains statements, investment documents, Form 26AS and the Annual Information Statement (AIS). They must reconcile them to avoid any mismatch in information and must take note of the relevant ITR Forms and the changes that have been incorporated this year.
Though taxpayers do not have to attach any document at the time of filing the ITR, they must retain these documents in case these need to be produced before the tax authorities if demanded later.
Neeraj Agarwala, partner, Nangia Andersen India, says filing of ITR is important to not only be in compliant with the law, but also as it acts as a proof of income and assets which is required to avail a loan or, for that matter, even a visa. “If you are unsure about the particulars to fill in the ITR, take the help of the instructions published along with the income tax form. Any wrong information may trigger inquiries by the tax department,” he says.
Pre-filled ITR forms
Information on salary income, interest on bank deposits will be a part of the pre-filled ITR forms. A taxpayer will have to check the details and if there is no discrepancy, he can file the returns. In the online portals for tax filings, personal details like name, father’s name, address, Aadhaar number, bank account number and tax-paid information are pre-populated in the tax form. Last year, the government introduced the AIS which gives details of all financial transactions by the taxpayer including high-value transactions.
In fact, AIS provides more information than the Form 26AS, as it offers details of income where taxes are not withheld and financial transactions during the year. As AIS will have details of income irrespective of whether the taxes are withheld or not, taxpayers will have to cross-check all the income details given in it and if there is any discrepancy, he must notify the income tax department. In the past, most taxpayers failed to report interest income as this was not reported in Form 26AS. Now, all interest income will reflect in the AIS.
Types of ITR forms
ITR 1 (Sahaj): It is for individuals having total income up to Rs 50 lakh, having income from salaries, one house property, other sources such as interest income and agricultural income up to Rs 5,000.
ITR 2: It is for individuals having income above Rs 50 lakh from salary, pension, capital gains, foreign assets, more than one house property.
ITR3: It is for individuals and HUFs having income from profits and gains of business or profession.
ITR4: It is for individuals, HUFs and firms (other than LLP) being a resident with total income up to Rs 50 lakh and having income from business and profession computed under presumptive taxation scheme (Sections 44AD, 44ADA or 44AE).
Revised or belated returns
A taxpayer can revise the return at any time before three months prior to end of the relevant assessment year or before completion of the assessment whichever is earlier. Section 139(5) allows rectification of mistakes in the original tax returns by filing a revised return.
If a taxpayer fails to file the ITR on or before the prescribed due date, then he can file a belated return. A belated return can be filed any time before three months prior to the end of the assessment year or before completion of the assessment, whichever is earlier. For income earned during FY 2021-22, the belated return can be filed up to December 31, 2022.
GETTING IT RIGHT
— Collect relevant documents such as Form 16, Form 26AS, TDS certificates, capital gains statements, investment documents and AIS
— AIS provides more information than Form 26AS, as it offers details of income where taxes are not withheld and all financial transactions
— Check the four ITR forms and the changes incorporated in them this year to know which one is right for you