It’s that time of the year when you must be rushing around with paperwork to file your income tax return (ITR). To avoid committing a mistake during this last minute scramble, you must maintain a checklist of items that you need to keep in mind while filing returns. A small error can put you under the scanner of the Income Tax Department.
Here is a 10-point guide that can help you file returns smoothly.
Check If Your Income Falls In The Taxable Range
You are liable to file your ITR if your income is taxable. It’s mandatory for you to file your ITR if your annual income is above Rs 2.5 lakhs. Even if your income is below Rs 2.5 lakhs, you must file your return as it comes as a handy document for many financial transactions. It also makes sense to file returns to claim any TDS refund. If you fail to file your ITR, you might not be fulfilling your duties as an Indian citizen and may also end up attracting penalties.
Get Form 16
If you are a salaried person, collect Form 16 from your employer. It contains all your salary details along with Tax Deducted at Source (TDS) deductions. If you have worked with multiple employers in a financial year, get Form 16 from all of them.
Link Aadhaar With PAN
It has been made mandatory by the Government to link your Aadhaar with PAN in order to file your income tax return. This can be done easily by visiting the Income Tax Department’s website and keying in your Aadhaar and PAN details.
Keep All Documents At One Place
Since filing tax returns involves details of documents like bank statements, investment proofs, income from other sources, insurance policy, PPF statement, stamp duty payment etc, it would help you a great deal if you keep them handy.
Keep Track Of Capital Gains
If you have sold Mutual Funds, property etc, you need to calculate the capital gains tax.
Details That You NEED To Provide If Your Income Is Over Rs. 50 Lakhs
Assessees, whose income is over Rs. 50 lakhs, will have to provide details of movable and immovable assets when filing tax returns this year onward.
Segregate Source Of Income
When you file returns, try and segregate income from all sources. Mention the incomes that are tax exempted such as LTCG from equity investment, dividend income etc.
Check Form 26 AS For TDS Details
Your Form 26 AS is also an important document as it is your tax credit statement and shows all the taxes received by the Income Tax Department. Once you get TDS details from Form 16, you must verify it with Form 26 AS.
Choose The Right ITR Form
When you get an ITR form, make sure it is the correct one for you as there are several forms which are to be used by specific categories of taxpayer. For example, ITR 1 (SAHAJ) is issued for individual taxpayers earning an income below Rs 50 lakh, whereas ITR 2 is used by both individuals and HUFs if income includes salary, pension, more than one house property, capital gains or income from other sources(including winning from horse races, lottery), assets outside India and agricultural income of over Rs.5000.
Make sure you have all the documents in place and no errors are made while you file your returns.