Hyderabad : The time has come to file income tax returns for the previous financial year. The Income Tax department has already made the returns documents available. In this context, let us see what precautions should be taken to avoid errors while filing returns for the financial year 2022-23 (Assessment Year 2023-24).
According to the information provided by the IT Department, the persons who do not require an audit have to file their returns by July 31. Form-16 has already been provided in some offices. Based on these, this process can be completed easily. One of the most common mistakes made by taxpayers is choosing the ITR form. It is absolutely necessary to file the details in the correct form.
There are seven types of income tax return forms. Individuals can file ITR-1 when they have income up to Rs 50 lakhs as salary, income from a house, interest etc. Individuals, Hindu undivided families and organizations can opt for ITR-4 when their income is above Rs 50 lakhs. ITR-2 should be filed when the income is more than Rs 50 lakhs and the income is from a single household.
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Professionals, those who are in doubt about ITR-1 and ITR-2 can opt for ITR-3. When dealing in shares you have to choose ITR-2 or ITR-3 depending on the transaction carried out. Other documents are applicable to companies and business entities. People have nothing to do with them. All income must be reported while filing income tax returns. Some people don't mention certain incomes. It is tantamount to breaking the law.
If the IT Department detects violations, there is a possibility of sending notices. Most people enter only their salary. Income from bank savings accounts, fixed deposits, insurance policies and PPF interest are ignored. The rules say that the details of the income falling under the exemption should also be shown in the returns. If there are investments in the name of minor children and income is generated from them, that amount is considered as part of the assessee's income.
Section 80C is the main income tax exemption. According to the rules, under this section, you can invest in various investment schemes and get a deduction of up to Rs 1,50,000. EPF, PPF, ELSS, home loan principal, children's tuition fees, premium paid for life insurance policies etc all come under this section. Details of health insurance premiums should be entered in Section 80D. All types of investments you have made should be properly mentioned in the returns to save tax.
Sometimes the details available with Income Tax may not match your Form-16. This discrepancy appears because the tax collected from you has not been deposited with the IT Department. Go through your Form-16, Form 16A, 26AS and Annual Information Report (AIS) thoroughly before filing returns. If there is any discrepancy, bring it to the attention of your management and correct it. There is a risk of notices if returns are submitted with mistakes.
