ITR Filing 2023-24: 10 things to consider while Filing ITR to avoid Income Tax Notice:

ITR Filing 2023-24: 10 things to consider while Filing ITR to avoid Income Tax Notice The financial year 2023-24 ended on March 31, 2024, and individual taxpayers are preparing to file their tax returns by July 31, 2024. Over the last few years, the government has attempted to improve the taxpayer experience by streamlining tax return filings through pre-filed ITRs, among other things. Taxpayers can ensure that their returns are filed correctly and prevent potential queries from the income tax department, as well as other concerns, by following the suggestions outlined below.

Correct Selection of ITR Form

Using the correct ITR Form is important for correctly reporting income and claiming deductions and credits. In the event of an inaccurate selection, the tax department may issue a "defective return" notice to the taxpayer. Therefore, the correct ITR Form must be chosen based on income, residential status, and other factors.

Tax Regime Selection

Budget 2023 mandated the streamlined tax regime as the default tax regime beginning in the financial year 2023-24. If a taxpayer prefers the old regime, there is an option in the ITR Form titled "Do you wish to opt out of the new regime?" where "Yes" is to be selected. Tax calculators are accessible on the income tax portal for comparison and can help you decide which regime is best.

Reconciliation of Income

Income facts appearing in Form 16/16A, Form 26AS (tax credit statement), AIS (Annual Information Statement), and other forms available on the income tax portal must be reconciled to verify that all sources of income are disclosed; otherwise, interest and penalties may be imposed.

Tax Credit

When filing an ITR, taxpayers should ensure that any taxes already deducted/paid are to be reported on Form ITR and only the balance tax liability is paid. As in the case of TCS, details of TDS, Advance tax and Self-assessment tax paid are also available in Forms 26AS and AIS. In order to obtain full credit for the applicable amounts, the taxpayer must precisely enter details (e.g. TAN, date of deposit, Challan Sr. No., etc.) in the appropriate areas of the form.

Tax Collected at Source

TCS is a tax that is levied on the buyer for a variety of expenses. Forms 26AS and AIS contain details about TCS. Taxpayers must verify that this credit is adequately recorded because they are able to receive TCS credit when filling out the ITR form.

Declaration of Foreign Assets

Recently, there has been an upsurge in notices sent to taxpayers to verify the specifics of offshore investments. Hence, if you qualify as a Resident and Ordinarily Resident (ROR) and have overseas assets, you must properly record them on your income tax return.

Claiming of Losses

Taxpayers should report all qualified losses incurred in the current and previous years to save taxes. Additionally, unclaimed prior losses that can be carried forward to the following year should be recorded in the relevant schedule of Form ITR.

Bank Account Details

In case of a tax refund derived from an ITR, taxpayers must verify that active and verified bank account details (i.e. account number, IFSC code, bank name, etc.) are appropriately stated.

Adherence to Deadline

Failure to file the return by the deadline given has numerous consequences, including late fees and penalties. Furthermore, the simplified tax regime can't be opted and capital losses cannot be carried forward, among other things. To prevent such consequences, one should always file their income taxes on time.

ITR Verification

The final step after submitting an income tax return on the official portal is verifying the return within 30 days after filing it. Verification can be completed via an OTP on the phone number registered with Aadhaar, net banking, or by delivering a signed copy of the ITR-V to the CPC Bangalore office. An ITR is considered invalid if it has not been verified within the time frame specified.