Checklist To Streamline Your Income Tax Return (ITR) Filing For FY 2022-23

While the deadline for filing tax returns is quickly approaching, many individuals find the task of filing income tax returns (ITR) to be overwhelming. However, by adopting the right approach and adequate preparation, this process can be streamlined and completed swiftly. To help you file your ITR efficiently and within a short timeframe, here's a 9-point checklist to guide you through the process.

Get the form 16 or 16A-

The initial step for salaried taxpayers is to obtain their Form 16 or 16A from their employer. The assessee is now required by the tax forms to provide a breakdown of his total salary, naming the main heads of income. You must include your base pay, HRA, as well as any additional benefits you receive, such as LTA or a uniform allowance.

Verify details-

Before filling out the form, it is important to verify whether all the tax deductions made on your behalf have been duly credited to you. You can cross-check this information in your Form 26AS, which provides a comprehensive record of all payments made to you and the corresponding Tax Deducted at Source (TDS). This encompasses TDS on interest earned from deposits and bonds, as well as dividend income. Additionally, the Form 26AS includes details regarding Tax Collected at Source (TCS), which is applicable to specific transactions such as overseas money transfers or foreign currency purchases. The TCS amount can be adjusted against your tax liability. You can access your Form 26AS through either the tax department's portal or your Net banking account to ensure the accurate inclusion of TDS and TCS deductions.

Verify income and tds, tcs details-

Once you have verified the TDS and TCS information on your Form 26AS, compare it to the information on the Annual Information Statement (AIS). The AIS, which was introduced last year, is a thorough summary of every financial transaction made by an individual throughout the course of the year. It contains information about all of the individual's earnings from numerous sources, including salary, employment, rent, interest, etc. Additionally, it contains information about where and how much the person invested and spent throughout the course of the year.

Get capital gains statements

You must request a capital gains statement from your broker and mutual funds if you have invested in equities and mutual funds. Short-term profits are taxed at 15%, while long-term gains from stocks and equity-oriented funds are taxed at 10% after Rs. 1 lakh.
For non-equity funds and other assets, such as gold and real estate, the tax rate is higher and the tax calculation is much more difficult. Long-term gains are taxed at 20% after indexation, but short-term gains are included to income and taxed at regular rates.

Enter interest on deposit and bank balance-

Many people fail to include other income, such as interest from savings and deposit accounts, in their tax filings. They used to be able to get away with it if they were able to divide their deposits among many banks and avoid TDS. This is not still feasible. The interest earned would be included in the AIS even if you have several deposits spread across different banks and no TDS has been deducted.

In your tax return, don't forget to add the interest you received from tax-exempt investments like Sukanya Samriddhi Yojana and the PPF. You will be able to account for the money when the account eventually matures after a few years, even if this won't increase your tax requirements.

Declare income from investment

The budget for this year has made it clear how earnings from virtual digital assets, like cryptos, will be taxed. However, the taxation of gains in the previous financial year is mired in confusion and contradictions.

Enter details of assets

Foreign assets are truly a minefield full of possible tax blunders. Regardless of the individual's total income, all foreign assets, including foreign bank accounts, financial interests, immovable property, accounts in which they have signing authority, and any other capital assets in India, declared in the tax return. Many people could be tempted to omit this because of how difficult the task is. This might be expensive. According to the Black Money (Undisclosed overseas Income and Assets) and Imposition of Tax Act, 2015, knowingly withholding information about overseas assets may result in significant charges.

Check deduction and exemption-

Once you have completed the form completely, take your time submitting it. Thanks to pre-filled forms and the incorporation of data from numerous sources, filing tax returns has gotten simpler in recent years. However, a lot of people have found errors in tax filings and anomalies in the AIS.

Verify ITR by filing the ITR V

The ITR submission is not the end of the tax filing process. A vital stage is still incomplete. Within 120 days after submitting your return, you must confirm it. The return becomes invalid if it isn't confirmed within this time frame, and you risk paying a non-filing penalty.