With the introduction of Section 112A, a lot of information with regards to your investments needs to be filled in the ITR
This is that time of the year, where every taxpayer is busy looking into their transactions for the last year and preparing their income tax return (ITR). Salaried taxpayers should ensure they have their Form 16 and the credit of taxes are duly and correctly reflecting in Form 26AS.Section 115BAC introduced vide Finance Act 2020 provides an option to the taxpayers to choose between the new and old tax regime.
While the new regime provides for lower tax rates, it takes away the option to claim certain tax exemptions and deductions allowable in the old tax regime. Since the selection of option is to be intimated at the time of filing of the return, the section provides a benefit to the salaried taxpayers wherein the taxpayer can choose a different regime at the time of filing of return than what was opted for with the employer for the purpose of deduction of tax.
New and old tax regime
In a case where taxpayer opted for the old regime with the employer but could not make investment as declared under Section 80G of the Income-tax Act, 1961 (the Act) and realises that the new regime would be more beneficial to him, he can still opt for new regime while filing the ITR and any refund due in such a case can be claimed. Therefore, one should analyse well in advance if any change in the regime is required while filing ITR.
Further, one must collect bank statements and bank interest certificates and reconcile the same with tax credits available in Form 26AS. Even though the entire process of taxation is digitalised, even the slight possibility of error of any short tax credit can be avoided. Also, keeping your medical premium receipts, home loan interest certificates, and donation receipts handy will help you ensure that you do not miss out the benefit of any deduction. For salaried individuals, if any deduction was left to be declared in Form 16, the same can be additionally claimed when filing ITR.
Books of accounts
In addition, individuals having income from business and/or profession must check whether they are required to prepare books of accounts under the provisions of the Act. Non-adherence to compliances for maintaining books of accounts can result in making your return defective. Further, with the introduction of Section 112A, a lot of information with regards to your investments needs to be filled in the return form. All the capital gain statements must be collected forehand such that no information is missed while filing the return.
Now that the department has automated its process for issuance of refunds, it is important to ensure that your bank account is pre-validated on the new income tax portal. Also, choose the correct return form so that the complete and correct details can be provided.
The interface for filing has been completely revamped on the income tax portal to make it more user-friendly and interactive. It is advisable to complete your filings without much ado to avoid any penalty, interest and last-minute rush. So, choose your forms wisely and do not hesitate to contact your tax advisors in case of ambiguity.
