Income tax return filing: Here are 5 easy ways to maximise refund

An individual must verify the tax return within 30 days of filing the ITR.

The deadline for filing income tax returns (ITR) for the financial year 2022-23 (assessment year 2023-24) is July 31. “Do finish this important task and unwind this weekend. The due date to file your #ITR for AY 2023-24 is 31st July, 2023. #FileNow and spend your weekend without any worry,” the income tax (I-T) department tweeted July 15.

Taxpayers are eligible for a refund if they have pay taxes in excess of their financial liability. The refund amount is calculated at the time of filing ITR and is credited to the assessees account after it is processed by the tax authorities.

Experts say there is a misconception that an individual cannot save tax more than what is shown in Form 16. An individual’s Form 16 is not the only source of potential savings. Before filing returns, check income details with 26AS and Annual Information Statement (AIS) and Taxpayer Information Summary (TIS). Check if the tax deducted at source is reflected in 26AS, so that TDS can be claimed or adjusted against the tax liability if needed.

Also Read: Nuts and bolts of income tax return-filing process for FY22-23

Some key points to keep in mind to maximise your tax refund:

(1) Submit ITR on time

It is vital to file your returns on time to escape penalties and it is also one of the easiest ways to get maximum refunds.
A taxpayer has to submit the return form by the date prescribed under section 139(1) of the I-T Act. An assessee will have to pay a penalty for a delay in filing ITR.

Also Read: Income tax return filing: How long does it take to receive an ITR refund?

(2) Choose the correct tax regime

Taxpayers can select the tax regime under which they want to file their ITR. Choose the tax regime that suits your needs.

If you do not have adequate long-term investments such as Public Provident Fund (PPF), insurance policy or Equity Linked Saving Schemes (ELSS) and eligible tax deductions such as interest on a home loan or health insurance, the new tax regime might be a better choice, as it offers low tax rates instead in lieu of deductions and exemptions.

Also Read: ITR filing: Switching between old, new tax regimes possible, with some hassles

(3) Verify your e-return

An individual must verify the tax return within 30 days of filing the ITR. In case the return is not verified, it will be treated as invalid and the taxpayer will have to submit the ITR again if the last date has not passed.
There are six ways to e-verify the tax return, including the OTP sent on the mobile number linked with Aadhaar, net banking, electronic verification code (EVC) via bank account and EVC from bank ATM.

(4) Claim deductions and exemptions

Taxpayers should identify deductions and exemptions they can claim. The amount lowers the taxable income and increases the refund. PPF, National Savings Certificate (NSC), National Pension Scheme (NPS), life and medical insurance premiums and interest on home loan are eligible for standard deductions.

Also Read: Filing income tax return (ITR) for the first time? Here is how to get started

An individual should not just count deductions reflected in Form 16. They may have incurred many tax-saving expenses which are not reflected in Form 16. For instance, school tuition fees of children. Revisiting tax-saving expenses and investments while filing ITR is a good idea.

(5) Validate bank account

Authenticate your bank account and make sure that it is verified correctly on the income tax return portal. The validation process is necessary because tax authorities credit refunds only to the accounts validated on the e-filing portal. The validation needs to be done before filing the returns.