ITR filing month is around the corner. Hence, you should be aware of all the necessary information regarding filing of the ITR. Following are some of the significant things that are to be kept in mind while filing ITR this year.
a. Determination of residential status:
What is to be included in total income of assessee is greatly influenced by his residential status in India. Total Income of an assessee cannot be computed unless his residential status is determined as per provisions of the Income Tax Act.
The residential status of each person shall be determined separately as per the set of rules prescribed for the relevant category of person. For example, residential status of an individual is determined based on his number of days of stay in India. However, residential status of a company is determined based on its “Place of its effective management”.
b. Keep each document handy and safely preserved:
While filing return, documents relating to your income, deductions to be claimed and TDS data should be kept handy. If the assessee is a salaried employee, Form 16 is the most important document for filing ITR. Other documents such as payment of housing loan receipts, rent receipts, receipts for various investments during the year etc. are also to be kept ready so as to fill up ITR correctly.
Also, the copies of documents utilized in filing of the return should be preserved for the future needs as most of the assessee’s dispose of the copies of the documents after filing the return. Every assessee should maintain all the documents as to be able to provide those to the tax authorities in case of any further proceedings.
c. Selection of appropriate ITR Form:
The first and most important step in the process of filing ITR is the selection of the correct ITR form. There are 7 ITR forms available notified by the tax authorities.
ITR forms are to be chosen based on different criteria such as nature of assessee, nature of income, whether or not the assessee wants to carry forward the losses etc.
Following is the list of no. of ITRs which are to be filed depending upon the status of assessee. After choosing the ITR applicable in individual’s case, may choose the ITR to be filled up by him based on the nature and quantum of income earned by him during the year.
| ITR Forms | Eligible Assessee |
| ITR 1 to ITR 3 | Individual & HUF |
| ITR 4 | Individual, HUF and Partnership Firms |
| ITR 5 | Partnership firms, LLP, AOP, BOI, Local authority etc. |
| ITR 6 | Companies other than claiming exemption under section 11 |
| ITR 7 | Charitable trust, political parties, business trust or company claiming exemption under section 11 etc. |
d. Disclose all the incomes received:
Filing of ITR requires us to disclose all the incomes from various sources whether exempt or taxable. Assessees often fail to disclose their petty incomes and exempt incomes due to their ignorance which often leads to issue of notice from the department.
So, while filing ITR be sure to include all your petty incomes such as interest from savings account, etc. and disclose all the exempt incomes earned during the year.
e. One is liable to file ITR even if no tax dues:
Generally, a taxpayer believes that he isn’t liable to file tax return since there is no tax liability pending. It should be kept in mind that ITR has to be filed irrespective of the fact whether the tax is required to be paid or not. Generally in case of individuals what triggers the liability for filing of ITR is the fact that the gross total income of the assessee is more than the maximum exemption limit.
f. Verify credits in Form 26AS:
Now, the ITRs are linked with the Form 26AS, resulting prefilled information in the ITRs relating to form 26AS. But for a safer side it is advisable to cross verify the information as reflecting in Form 26AS with that of the information in the ITRs. Before filing the return every assessee should verify the credits in the 26AS form in order to ensure that the return filed is free from error.
g. Deductions claimed and their proof to be kept safe:
Every assessee should make sure that all the deductions for which the assessee is eligible have been claimed in the return. Assessees often forget to claim deduction for the expenses incurred by them during the year or investments made during the year. So, keep track of all the payments made by you during the year which are allowed as deduction while commuting your income.
Also keep safe all the documents relating to your deduction claimed so, as to avoid any further inconvenience during the proceedings.
h. Double check important information before filing of return:
The assessee should double check the personal information that he has filled such as Mobile number, Communication address, bank account details, etc. If you are claiming refund, it is of great significance to cross check your bank details so as to ensure that you get your refund smoothly.
i. File return before due date:
It is always advisable to file your return in time. Don’t wait for the last day of filing of return. At that time all the professionals will be head long busy with work and it will result in mistakes at the professional’s end, which will result in greater implications in the future. Further, filing of return beyond due date also attracts late filing fees and disallowance of deduction or carry forward of losses. So it is always advisable to file return well before the due date.