Four things to keep in mind when filing your income tax return this year
The tax department notified the RTI forms for AY22 and extended the RTI filing deadline until September 30. However, it will be best to prepare now for the tax return and file the ITR as soon as possible. This will not only help speed up the processing of tax refunds, but will also reduce the chance of errors on your part. However, before you begin, here are a few things you should keep in mind.
New or old tax regime: The government introduced a new optional tax regime in the 2020 budget. From fiscal year 21, individual taxpayers have the option of choosing between two tax regimes. The new regime proposes to tax at a lower rate but the taxpayer will have to forgo various deductions and exemptions available under the old regime. The taxpayer is generally advised to choose the scheme at the start of the year. However, if you are among those who have not been able to carry out the planned investments or expenses for which you were entitled to the tax deduction under the old regime, you can switch to the new regime if it leads to a loss. tax reduction for you.
This is more important for business owners. âBusiness owners need to choose the right plan thoughtfully because once selected it can only be changed once. However, salaried people with income from salary, real estate and other income can change it every year. You have to calculate the tax under both regimes after looking at the applicable provisions and then decide, âsaid Abhishek Soni, co-founder and CEO of Tax2win.in, a tax filing portal.
Extended dates, no tax break: The RTI filing deadline has been extended to September 30. However, it does not provide for any tax relief to be paid. If you have withholding tax due, you may need to pay criminal interest. Therefore, it is better to pay the tax and file the ITR as soon as possible.
âThe CBDT has provided for this relaxation with regard to interest under Article 234A only when the tax payable for the self-assessment (after having provided for the TDS, withholding tax, etc.) does not exceed â¹1 lakh. Thus, except when the tax payable for the self-assessment exceeds â¹1 lakh, no relief regarding section 234A would be given to the assessed taxpayer, âsaid Suresh Surana, founder of RSM India.
Under Section 234A, interest at the rate of 1% is charged monthly for any delay in filing the ITR. âIn addition, the assessed taxpayer may be subject to interest under Articles 234B and 234C regardless of the extension of the due date,â he added.
Interest under Article 234B is applicable if the taxpayer has not filed withholding tax or if the withholding tax deposited is less than 90% of the total tax payable.
Penal interest under article 234C will be applicable if the taxpayer has not filed withholding tax according to the prescribed quarterly installments.
Seniors who have no professional income are exempt from withholding tax.
Changes to tax forms: The tax department must notify tax forms annually after incorporating any changes. Knowing the changes in order to choose the right form of RTI is imperative. This year, some changes were made to the eligibility criteria for RTI 1, which is generally used by salaried taxpayers. This year, the ITR 1 cannot be filed by a person whose tax withheld at source (TDS) has been withheld for cash withdrawal under Section 194N or by employees who have deferred income tax. employee stock options (ESOP) received from the employer. Therefore, choose the form taking these changes into account.
Unclaimed deductions: If you forgot to submit proof of investments such as life insurance or health insurance premium to your employer and tax has already been deducted, don’t worry. You can claim these deductions when filing the ITRs and claim a refund of the tax paid. However, keep a copy.
This year, you are likely to get a lot of information, including interest earned, dividends received, capital gains on stocks and mutual funds, pre-populated. It is important that you verify these details with the documents you have. Therefore, it will be best to collect documents such as Form 16, Form 26AS, and bank statements before you start filing your ITR.
âAppraisals are advised to wait until July 15, as any deducted TDS or TCS (taxes collected at source) paid on their behalf can be updated in their Form 26AS on that date. The deadline for filing TDS and TCS returns has been extended to June 30, âsaid Vivek Jalan of Tax Connect Advisory Services LLP, a consultancy firm.
The tax filing process is not complete until you verify the ITRs. This must be done within 120 days of filing the RTI. It can be done online or by sending the duly signed ITR-V by post.
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