INCOME TAX RETURN IN INDIA- Important things to be kept in mind

INCOME TAX RETURN IN INDIA

The financial year 2021-22 is coming to an end now and every assessee needs to prepare and file their Income Tax Return in India on or before the due dates prescribed under the Income Tax Act.

In this write up, we have provided some of the important things which should be kept in mind for the purpose of filing Income Tax Return.

Things to be kept in mind for purpose of ITR Filing

Following things shall be kept in mind at the time of ITR filing for FY 2021-22

1. Ensure you have done your investments eligible for deduction before 31^st March

As per the provisions of the Income Tax Act, every assessee is entitled to deduction upto Rs.1.5 lac for making investments in specified schemes on or before the end of the financial year. Some of the investments which are eligible for deductions are like investment in LIC, mutual funds, PF, PPF, children education, NSC etc. In case you have not yet done your investment as prescribed under section 80 C you may do so before 31^st March 2022. Similarly, there is additional deduction of Rs 50,000 for making investment in mediclaim or health insurance. This deduction is eligible u/s 80D and is over and above the prescribed limit of investment of Rs 1.5 lac under section 80C. Accordingly, such investments may also be made before 31^st March.

1. Close your books and make reconciliations 

In case of business assesses, it is important to close the books of accounts and make all the provision entries and reconcile the figures of sales and purchases with Form 26AS, GST returns and bank statements. 

1. Reconciliation between form 26AS and AIS

Nowadays, tax department has all the information about all the financial and non-financial transactions of the tax assesse and same are automatically reflected on the tax portal in the form of form 26AS and form AIS. Therefore, it is very important to consider all those transactions at the time of preparation and filing of Income Tax Return in India. Failure to reconcile the same may result in issuance of income tax notice by the tax authorities and opening of the case of the assesse for the purpose of scrutiny assessment.

1. Keep handy all the documents required for Tax Return Filing

Normally, lot of information and documents are required for tax return filing by making proper analysis of income and deductions allowed etc. and therefore, it is advisable to keep all the necessary documents handy. Following are the list of documents which are normally required by every assesse for preparation and filing of Income Tax Return.

1. In case of salaried employees, copy of form 16, salary slip, employment contract letter
2. Copy of TDS certificate in form 16A
3. Copy of form 26AS and AIS
4. Copy of bank statements of all the bank accounts including bank account outside India in case of Residents having overseas bank account
5. In case of Non Residents, copy of visa, passport and details of number of days of stay in India during last year, last 4 years, last 7 years and last 10 years in order to determine the residential status. Also, their Tax Identification number in foreign country
6. Copy of documentary evidences of investments made u/s 80C and 80D
7. Copy of PAN, Aadhar, Passport
8. In case of investment in shares, mutual funds, copies of contract notes, statement of investments etc.
9. In case of sale of property, copies of sale and purchase deed
10. Income tax login password

Above are some of the things which should be kept in mind while filing Income Tax Return in India. The list is not exhaustive and only illustrative.