ITR Filing 2024: Vital checks to ensure accuracy, and smooth filing of income tax returns

To ensure the ITR filing process is smooth, you must carry out certain checks before filing your ITR. Let's discuss.

Verify your AIS and Form 26AS

For quite some time, the Income Tax Department has been making your form No. 26AS available, containing details about Tax Deducted at Source (TDS) from incomes like various income like interest, dividends, salaries, etc., paid to you as well as Tax Collected at Source on payments made by you (TCS). This statement also details taxes you pay directly, like advance tax, self-assessment tax and tax on regular assessment. You also find the particulars of the income refund issued during the year.

The Income Tax Department has recently started providing you with an elaborate annual information statement (AIS). The AIS has widely expanded the scope of data available to you. The AIS contains data about various specified financial transactions carried out by you during the year, like property purchase and sale, transactions in shares and mutual funds, bank fixed deposits, credit card payments, amounts deposited in our bank account, saving bank interest, etc. The availability of these data hugely helps us in filing our ITR correctly.

Since the tax department processes the ITR filed by us based on available data, it is strongly advised that you verify the details of tax credits as reflected in form no. 26AS, and information about your specified financial transaction is reflected in AIS. Both these documents can be viewed by logging in to your income tax account on the Income Tax Department website. If you find any discrepancy in the AIS, you can submit your feedback online.

This exercise will help you ensure the maximum possible correctness of the ITR to be filed. It will also help you identify certain financial transactions you would have forgotten to incorporate into your ITR. Details like interest accrued on your bank FD are reflected in your AIS but would not have been included in the ITR due to oversight. Even if you follow the receipt basis for offering such income, such comparison will help you furnish the details of tax deducted at source in the ITR, which you wish to carry forward to subsequent years. For correctness, you may also verify the volume of transactions regarding shares and mutual funds. In case any tax deducted is not reflected in the 26AS/AIS, the fact needs to be brought to the notice of the deductor for taking corrective action.

Verify the form number 16 /16A

By now, you must have received all your forms for TDS, be it form no. 16 or form No. 16A. Please verify that your PAN is correctly mentioned on form no. 16 issued to you by your employer, especially in case this is the first year of your employment. Please also verify that all the exempt allowances, like HRA, LTA, etc., claimed by you are correctly shown as exempt in Form 16 in case you have opted for the old tax regime.

There may be some discrepancy due to you failing to submit the required documents in time, and consequently, the employer must have deducted tax on it, treating it as taxable. It is also advised to verify the number of various deductions available to you for various payments made by you, like life and health insurance premiums, home loan repayment, interest on education loans, school fees, etc., is correctly mentioned in the form no 16 as your Chartered Accountant in all probability will generally rely only on form no. 16 while filing your ITR. In case of any discrepancy in form no. 16, please bring it to your employer's notice immediately and request to get it corrected. In case of deviation between Form 16 and the ITR filed, you may get a notice from the department, which can be avoided by ensuring that the details in Form 16 are correct.

Similarly, verify the form no. 16A received by you, particularly from the bank, for correctness of PAN number, amount of income shown and amount of TDS mentioned on it.

Open the capital gains account before 31st July 2024

In respect of taxable long-term capital gains, you can avail of tax exemption either under section 54 or 54 F by investing in a residential house. Though the law allows you a period extending beyond the due date of ITR for investing in a residential home, it requires you to deposit the unutilized money in a capital gains account to be opened with specified banks by the due date of ITR. So, even if you feel unable to file your ITR by the due date, please ensure that you deposit the unutilised amount in the capital gains account well in time to avoid any litigation on this count in future.

Scrutinise various statements for correct reporting of income

Please obtain the annual account statement from your broker, mutual fund house and the bank to verify that all the transactions that reflect these statements are being correctly incorporated in the income statement being prepared for filing of the ITR

I am sure the above will help you better prepare for the filing of your ITR.

Balwant Jain is a tax and investment expert and can be reached at jainbalwant@gmail.com and on @jainbalwant on Twitter.