With the deadline of July 31 looming closer, tax payers are supposed to file their income tax return within a week now. As the tax department is in no mood to extend the current deadline, it is advisable to consider the July deadline as fait accompli.
Tax experts suggest that returns should be filed as soon as possible to avoid delays in refunds, if any.
“Among several benefits of filing income tax returns on time, there is one with regards to receiving the refund as early as possible. The later you file your return, the more delay you would face in receiving the refund,” says Deepak Aggarwal, Delhi-based chartered accountant and financial advisor.
Remember these points at the time of filing of return:
Tax return with zero tax liability: Filing of income tax return is vital even if your tax liability is zero. It helps in seeking loan approval, visa processing, carry forward losses, claim tax refund and evidence of earnings for any other purpose. Also, when there is a tax refund, the income tax refund will process the same when you file the ITR.
So, the only incentive of filing a return should not be to pay the outstanding income tax.
Income from cryptocurrencies: Since this is the first year for which investors will pay taxes on their crypto investments, one should understand the litany of provisions and a few nuances relating to income arising out of crypto investments.
One should report the income under schedule VDA in the ITR for FY 2022-23.
It is easy to self-compute when the number of transactions is small, but when the volume is large, it is advisable to seek assistance from technology solutions for calculations.
Claiming deductions under section 80C: While you file your income tax return, you must ensure to claim deductions given under the section 80C. There are a number of expenses that are allowed as deductions such as PPF, NSC, LIC premium, among others.
Individual taxpayers who pay tuition fees to any university, college, school, or other educational institution located are also eligible to claim a deduction under this Section.
Freelancers should file their returns: Freelancers and self-employed individuals in India must file their income tax returns (ITR) if their total income during the relevant financial year exceeds the basic exemption limit of Rs. 2.5 lakhs.
The due date for filing the tax return for freelancers and self-employed individuals who are not required to get their books of accounts audited is July 31. However, those who are required to get their books audited can file the return before October 31.
Verification of return: After you file the returns, you must ensure to verify the return within the stipulated time. Without verification, an ITR is treated as invalid.
The convenient way to verify the return is through e-verification. Since e-verification happens instantly, it saved taxpayers from the delay in transit of ITR-V. One can e-Verify using any of the various methods - Aadhaar OTP / EVC (using pre-validated bank / demat account) / Net Banking / Digital Signature Certificate (DSC).