With barely a fortnight to go before the July 31 due date to file income tax return, time is running out for taxpayers who are yet to complete the process.
Leaving it to the last minute could result in hurried return filing and hence, mistakes. Moreover, the income tax department’s e-filing website is bound to attract heavy traffic flow closer to the deadline, which could lead to delays closer to the date.
Also read | Filing income tax return (ITR) for the first time? Here is how to get started
Here are answers to some commonly-asked questions to help you navigate the tedious process.
Who needs to file income tax returns (ITR)?
It is mandatory to file an income tax return (ITR) if your income exceeds the basic exemption limit. For FY2022-23 (AY2023-24), the basic exemption limit is Rs 2.5 lakh for those under the age of 60 years under both the old and new tax regimes.
The old or existing tax regime offers a plethora of tax deductions under various sections such as 80C, 80D, 24(b) while the new regime introduced in Budget 2020 offers minimal exemptions, but lower tax rates.
This apart, if you have spent more than Rs 2 lakh on foreign travel or have deposited over Rs 1 crore in current accounts, you have to file returns even if your income does not exceed the basic exemption limit.
Senior citizens over the age of 75 can choose not to file returns but can submit declarations to their banks, saying they have no other income. They can do so only if their income sources are pension and interest, and these are received in the same bank account.
Also read | Moneycontrol's ITR filing guide for FY 2022-23
Which ITR form should I choose?
The answer to this question will depend on your sources of income. If you are a salaried individual with an income of less than Rs 50 lakh, have income from one house property, interest income or agricultural income up to Rs 5,000, you can use ITR-1.
But salaried employees with incomes over Rs 50 lakh, capital gains, investment in cryptocurrencies and so on will have to choose ITR-2. For those with business income, ITR-3 is the relevant form. Income earned from intra-trading in cash or Futures and Options (F&O) segments also qualifies as business income.
What are the documents needed to file ITR?
Again, this depends on your source of income and the respective ITR forms. If you are a salaried individual, the documents that you need include form-16 issued by your employer, bank account statements, home loan interest certificates, capital gain statements from your broker, and online mutual fund intermediaries or fund houses.
You must check Form 26AS and Annual Information Statement (AIS) on the I-T e-filing portal to ensure that you do not miss out on reporting any income. However, if you are certain that the AIS contains errors, go ahead and file returns by taking your records into account, after filing your grievance on the e-filing portal.
Also listen | Simply Save podcast | Filing ITR for crypto gains? Here’s what you need to know
What are the changes for FY2022-23 (AY 2023-24) that I need to be aware of?
A key change pertains to cryptocurrency transactions. From April 1, 2022, gains made from transactions in virtual digital assets (VDA) attract a tax of 30 percent, irrespective of your slab rate. You are not allowed to set off any crypto losses against the gains. Transactions in such assets exceeding Rs 10,000 attract tax deducted at source (TDS) of 1 percent. You will have to make the disclosures related to your crypto transactions in a separate VDA schedule.
Also read | ITR filing: How to file income from capital gains or set off capital losses
What are the common mistakes that I should steer clear of?
To start with, ensure that you select the right ITR form. Using the wrong form will render the ITR form ‘defective.’ You could receive a notice to file revised returns and failure to respond in time will result in your returns being treated as invalid.
Do not miss out on reporting any income. AIS captures all details. So, it’s best to be transparent. Ensure that you make the required disclosures in schedule VDA and capital gains schedules if you have dabbled in cryptocurrencies or made gains or losses on stocks or mutual funds.
Do not forget to disclose interest earned on savings and fixed deposits across all your bank accounts as also capital gains made through stocks, mutual funds, etc. Enter the correct bank account details to ensure refunds are credited without hassles.
Why is it important to verify returns after submission?
Once you submit your return online, you will have to verify it through the e-filing portal, Aadhaar-OTP route, your net banking account and so on within 30 days. If you don’t, your return will not be considered valid, and hence, will not be taken up for processing.
Also listen: Simply Save | Is the time limit for verification of I-T returns now down to 30 days for late filers?
Can I file my ITR after July 31?
Yes, but the delay will hurt your pocket. For FY2022-23 (AY2023-24), you can file belated returns until December 31, 2023. But there is a filing fee of Rs 5,000. However, this will be limited to Rs 1,000, if your total income is less than Rs 5 lakh.
(With inputs from Khyati Dharamsi, Ashwini Kumar Sharma and Abhinav Kaul)
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