6 Precautions To Take While Filing Tax Returns

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  • 01 Feb 2023
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April 1st is round the corner, and you know what that means - the arrival of the financial year-end and the need to file your tax returns! While it is common to practice submitting our taxes through a financial consultant, e-filing has rendered the entire procedure easy.

Assemble the necessary paperwork:

Keep a record of all necessary paperwork. The supporting documents include:

  • Passbook or Recent Bank Statement
  • Rent and Lease Contracts
  • Certificate of Interest
  • Proof of Investments for which you can claim deductions under Section 80C and others
  • Account Books
  • Balance Sheet
  • Profit and Loss Account It is essential to understand that no paperwork is necessary for tax e-filing; the documents may come in clutch during inspections.

Check Form 26AS:

Download online Form 26AS before tax e-filing to check the amount of TCS, TDS, and Tax paid. If you discover any mismatch, take necessary actions.

Clear Due Taxes:

If you have any due taxes, clear them before your tax e-filing. If you fail to do so, chances are, your tax returns will be considered invalid.

Double-check your Information:

When completing your details, ensure that the PAN number, address, mail address, and bank details are correct. Your provided data must appropriately correspond with the information in the PAN Card Database.

Filing Form ITR-V:

Most online taxpayers believe that Form ITR-V can be submitted anytime following a digital tax return file without a digital signature. However, this is not the case. If you are e-filing your tax return without a digital signature, you must submit an authenticated and signed ITR-V form to CPC Bangalore as soon as possible.

Avoid Late Tax Filing:

It helps if you always avoid late e-filing of tax returns. ITR Filing delays often prove to be damaging to your tax preparation in the long run. The ramifications include:

  • Interest being levied under Section 234A.
  • Deductions and exemptions under Section 10A, 10B, 80-IAB, 80-IA, 80-IB, 80-IE, 80-IC, and 80-ID will not be provided.
  • Losses cannot be rolled forward. (Housing property losses are an exception.)
  • 5,000 INR will be charged as a fine under Section 271F.

The benefits of filing tax on time are as follows:

  • Easier Loan Processing
  • Carried Forward Losses can be claimed.
  • TDS refunds can be claimed.
  • Credit Card and VISA applications are more straightforward.
  • Contribution towards nation-building.

Conclusion:

An excellent financial year starts with a tremendous financial year-end! After reviewing your previous years' tax filings, this exercise will enable you to avoid mistakes and optimally organise your money. Once you have corrected any flaws in your previous tax filings and prepared yourself for this year’s taxes, the best route is to go ahead with filing your returns, especially now that e-filing has made the entire process hassle-free and smooth.

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