Filing Income tax returns is an important part of declaring your income to the government and being a responsible citizen. It is also mandatory as income tax is the only direct form of tax revenue in India. Just like any other important financial task, it is important to plan your tax filing in advance. This helps you avoid discrepancies and errors due to negligence, and claim exemptions too. In addition to following your accountant’s advice, here are tips you should follow each year.
1. Quote Aadhaar as it is mandatory
It is mandatory to quote Aadhaar while filing ITR according to the Finance Act 2017. You can also choose to enter your 28-digit enrolment number in place of your 12 -digit Aadhaar number if you haven’t received the same yet. You can now link your Aadhaar with your PAN at the income tax official website.
2. Mention all bank accounts
It is necessary to mention all your existing bank account numbers along with their IFSC code in your ITR form. This is not applicable only if your bank account has been out of use for 3 years or more.
3. Consider changes in ITR forms
The Income Tax Return forms have been recently changed and reduced in number from nine to seven. It is important to first understand the use of each form before picking one without information. Remember that the ITR2, ITR2A and ITR3 have all been replaced with one form, namely—ITR2.
4. Include all income information
While filing taxes it is essential for you to include all sources of income and not just your salary details. Income is not just defined by your salary and includes funds received from rent, investments, and more. Whatever the source of funds, it is necessary to mention the same in your Income tax returns.
5. Check for recent updates
The tax filing system is regularly updated with new requirements. This makes it essential for you to check for recent updates. For an example, the reduction in time frame for revision for income tax from two years to one year, declaration of cash deposits of Rs.2 lakh or more after demonetisation, declaration of assets if your income exceeds Rs.50 lakhs, etc.
Use the above checklist to ensure you are filing your Income tax returns carefully. Remember start preparing in advance to avoid last minute hassles and do appropriate tax planning too.
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