Empower Yourself through Income Tax Return Filing: Key Considerations and Tips (Non Audited Assessees)
The Income tax return filing season in India has already begun for the ITRs pertaining to Financial Year 2022-23 (Assessment Year 2023-24).It is now a right time for the taxpayers to comply with their tax duties by disclosing their income, deductions and other financial information for the said Assessment Year as in majority cases, their online data such as Form 26AS, Annual Information Statement/Taxpayer Information Statement has now started updating.
A Non-Audited Assessee should consider the following important considerations while preparing and filing the Income tax Return:
1. Who is required to file an income tax return and cases when it is mandatory to file the return?
An assesses (taxpayer) is required to furnish the return of income mandatorily after the expiry of the previous year when:
• Gross Total Income of the assessee exceeds the maximum exemption limit before giving effect of capital gain;
• assessee has assets outside India;
• assessee has deposited more than Rs. 1 crore in a current account;
• assessee has incurred more than Rs. 2 lakhs on foreign travel;
• assessee has incurred more than Rs. 1 lakh on electricity bill;
• assessee’s turnover from business exceeds Rs. 60 lakh;
• assessee’s gross receipts from profession exceeds Rs. 10 lakh;
• aggregate amount of tax deducted and collected in case of assessee is Rs. 25,000/- (Rs. 50,000/- in case of senior citizen) or more;
• aggregate deposit in saving bank account(s) of the assessee is Rs. 50 lakh or more.
2. What are the main advantages of filing an ITR?
Following are the glimpse of benefits associated with filing an Income Tax Return:
• To Get your TDS refund in case of excess deduction of Tax at Source
• To Apply for Loan and Credit Card
• To Carry forward losses such as Business Losses, Investment Losses etc.
• For the purpose of a visa application
• To get Startup Funding
• To apply for Government Tenders
3.What supporting documents are needed to file the ITR?
In general, it is a good practise to keep following documents handy while preparing and filing income tax return:
• Aadhar and PAN Card
• Form 16 [Part A (In case, TDS is deducted from Salary) and Part -B]
• Salary Slips
• Pension Certificate in case of Pensioners
• Bank Statement/Passbook for all the accounts held during the year.
• Interest Certificates from Post Office/Banks/Financial Institution
• Capital Gains Details for Sale of Shares/Immovable Property/Mutual Funds Redemption etc.
• Health Insurance/Life Insurance Premium Receipts
• Form 26AS and AIS/TIS for Income and related transactions reconciliation
• Dividend Income details
• PPF/EPFO/ELSS/Other Eligible 80C Investment details
• Donations receipts.
4. What is the due date to file Income Tax Return for the non-audited assessee for FY 2022-23?
The due date to file ITR for Non audited assessee is 31st July 2023 for the Assessment Year 2023- 24.
5. Which form is required to file an income tax return for Individual, HUF, Partnership Firms and LLPs?
• ITR 1 to ITR 3 (For Individual and HUF)
• ITR-4 for Individual, HUF and Partnership Firms
• ITR-5 for Partnership Firms, LLPs/AOP/BOI/Local Authority
For more information regarding applicability of various forms, please visit below links:
For ITR-1 to 4: https://www.incometax.gov.in/iec/foportal/help/individual/return-applicable-1#returnsandforms
For ITR-5: https://www.incometax.gov.in/iec/foportal/help/partnership-firm-llp#returnsandforms
6. What is Annual Information Statement (AIS)? What distinguishes AIS from Form 26AS and importance of reconciliation of AIS data?
The Annual Information Statement (AIS) is a statement which provides in detail information with respect to various financial transactions entered by a tax payer throughout the year.It is an extension of Form 26AS. Form 26AS only lists those transactions on which Tax has been deducted at source or Tax has been collected at source while AIS also contains various in depth information with regard to Interest Income including savings interest/FD Interest/Bond Interest, dividend income details, rent received, details of sales and purchase of shares and securities, transactions of purchase or sale of immovable properties, details of payments made abroad, tax payment and refund information, GST turnover, etc.
It is very important to exercise extra care and apply due diligence while preparing and filing Income Tax Return. It is to be ensured that the data indicated in your income tax return correspond to the AIS/TIS information. If there is a discrepancy between the information you supplied in your submitted ITR and the information present in your AIS/TIS, you are likely to receive an income tax notice.
Various Components of Annual Information Statement (AIS):
The information displayed in AIS is divided in two parts:
PART A which provides general information like PAN, Masked Aadhar Number, Name of the Taxpayer, Date of Birth/ Incorporation/ Formation, mobile number, e-mail address and address of Taxpayer.
PART B displays TDS/TCS Information, SFT Information like Dividend Income, Interest from deposit, Sale of Securities and Units of Mutual Fund, Purchase of Securities and Units of Mutual Fund, Information about Payment of Taxes, Information about Demand and Refund and Other relevant Information.
Detailed FAQs regarding AIS can be referred from below link:
https://www.incometax.gov.in/iec/foportal/ais-faq
7. Why is it important to E-verify Income tax return after filing the same?
• After successfully filling of income tax return, the next step is to verify or E- verify it. If a return is filed but not verified within the permitted timeline, it shall be deemed as invalid return and will be regarded as not filed. The Income-tax Department starts processing of return, only if it is verified.
• An Income-tax return can be verified by the taxpayer himself on his own or through his authorized persons only.
• The Income tax return needs to be verified either electronically or can be verified by sending a physical copy of ITR-V duly signed to CPC Bengaluru within 30 days after filing it.
• The most practical and easiest method to verify ITR is through e-verification and is convenient in most cases.
Modes of E-Verification of ITR:
> Using Electronic Verification Code (EVC using pre-validated bank / demat account)
> Using Aadhaar OTP
> Net Banking / Digital Signature Certificate (DSC)
Refer detailed FAQs on verification of ITR from below link:
https://www.incometax.gov.in/iec/foportal/help/e-filing-e-verify-your return-faq
8. What are the consequences if the Income Tax Return is not filed or filed after due date?
A glimpse of various consequences of Non-Filing/Late filing of ITR are as follow-
• The tax payer will not be able get refund of excess deducted TDS without filing Income Tax Return.
• Non filing of Income Tax Return will attract penalty along with Interest in case of due tax.
• Loss from Business and on sale of investment will not be allowed to be claimed in case return of income is not filed within the due date.
• A late filing fee up to Rs.5000/- is charged in applicable cases in case of late filing of Income tax return.
• A delay in filing Income tax return may also cause delay in getting refund of excess tax paid.
• Due to non-filing of Income Tax Return, the tax payer can receive a notice from Income Tax Department and can be asked for the reasons of non-filing of the same.
Besides above, the tax payer’s access to various financial benefits such as Govt Tenders, Scholarship for children etc will be limited in case he has not submitted his ITR. By understanding the requirements, gathering the necessary documents, and reconciling your information with the Annual Information Statement, you can ensure a smooth filing process. Do remember to verify your return and avoid the consequences of non-filing or late filing. Stay compliant, claim refunds if eligible, and make the most of the advantages that come with filing your income tax return.
Download Income Tax Return filing utilities from below link:
https://www.incometax.gov.in/iec/foportal/downloads/income-tax-returns
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