Filing your Income Tax Return (ITR) can be a complex process, but taking the right precautions can make it much smoother. To avoid errors, delays, and penalties, it’s essential to be meticulous from start to finish.
Key Precautions for ITR Filing
Here are the critical steps to follow, recommended by the Income Tax Department itself, to ensure an accurate and hassle-free tax filing experience.
1. Gather and Verify Documents
Before you even log in to the portal, you should have all your necessary documents ready. This includes:
- Form 16: Your TDS certificate from your employer.
- Form 26AS & Annual Information Statement (AIS): These are vital. Download them from the e-filing portal to verify that the TDS, TCS, or advance tax you’ve paid is correctly reflected. If you find any discrepancies, get them corrected by your employer, bank, or tax deductor before you file.
- Other Financial Records: Compile all bank statements, interest certificates, investment proofs, and receipts for any exemptions or deductions you plan to claim.
2. Choose the Right Tax Regime
The Income Tax portal defaults to the new tax regime, but you have the option to switch to the old regime. Consider your financial situation and the deductions you qualify for (like Section 80C, HRA, etc.) to determine which regime is more beneficial for you. You can use an online tax calculator to compare the tax liability under both before making a final decision.
3. Select the Correct ITR Form
There are different ITR forms (ITR-1 to ITR-7), each applicable to different types of taxpayers and income sources. Selecting the wrong form can make your return “defective,” requiring you to refile. For example, a salaried individual with income up to Rs. 50 lakh and no business income would use ITR-1 (Sahaj), but a person with capital gains would need to use a different form.
4. Double-Check Personal and Financial Details
The pre-filled data on the portal is convenient, but you must still verify it. Ensure that your PAN, permanent address, contact details, and, most importantly, your bank account information are all accurate. Incorrect bank details can lead to delays in receiving your tax refund.
5. Don’t Miss the Deadline
Filing on time is crucial. The due date is set by the government, and missing it can result in late fees, the inability to carry forward certain losses, and loss of benefits from some deductions and exemptions. Always aim to file well before the deadline to avoid last-minute rush and technical glitches.
6. E-Verify Your Return
After you file your return, the process isn’t complete until you verify it. E-verification is the most common and fastest method, often done via Aadhaar OTP, net banking, or an Electronic Verification Code (EVC). Without verification, your ITR is considered invalid. If you prefer, you can also manually send a signed copy of the ITR-V acknowledgement to the Centralized Processing Centre in Bengaluru within the specified timeframe.