- Advertisement -
Home Personal Finance How to prepare for filing ITR for FY 2021

How to prepare for filing ITR for FY 2021

0
Budget 2023 Changes: Government plans to change Capital Gain tax in next Budget, know details

In case you invest in direct equity, you will have to get statement of account from your broker and statement from your depository for your demat account



The ITR filing season is on. Before you actually sit down to file your ITR, you should do some ground work so that the actual process of working out the numbers for your ITR and filing is smooth and seamless. Let us discuss what preparatory work you need to do in advance for this purpose.

For salaried

For those you are in receipt of salary, should first of all verify the details as mentioned in your form no. 16, which contains details of various taxable and exempt component of your salary. It also has details of various deductions available to you, based on the documents submitted by you to the employer.

There is all possibility of some of exempt allowance having been treated as taxable in form 16, in case you have failed to submit the supporting documents. For example if you have not submitted the rent receipts for your HRA (House Rent Allowance) claim or proof for travel to claim LTA (Leave travel Assistance) the same might have been treated as taxable and tax would have been deducted by your employer.

Likewise, in you have failed to furnish details of various deductions available like home loan repayment, NSC, ELSS, PPF, School, NPS, health insurance etc. the employer would have obviously deducted higher tax than what would be your actual tax liability. This may happen either due to delay in submitting the proof or due to oversight of finance department of your Company.

If you find that proper deductions have not been mentioned in form 16, though you cannot get it changed so soon but you can always claim these legitimate deductions while filing your ITR. So please bring such instances to your consultant’s notice so that he makes proper claim while filing the ITR.

Please also verify that the amount of gross salary is correctly shown in form no. 16 as per the salary monthly slips received or amount credited in your bank account after accounting for various deductions like PF, Profession tax and income tax etc. This will also help you verify various amounts deducted from your salary against which you can make claim while filing your ITR.

For are self-employed

Based on the gross receipt of your business or profession during the year, you can ascertain in advance whether you are eligible to opt for presumptive taxation or not. In case your turnover has crossed the threshold, you may have to get your accounts audited from a Chartered Accountant and get the audit report uploaded to the tax department website. In case you have to get your accounts audited, you get longer time to file your ITR.

For those whose business receipts are subject to tax deduction at source, should verify the amount of tax credit reflected in form No. 26AS and reconcile it with your books of accounts. There may be some discrepancy due to year end transactions or different methods of accounting followed by you and your customer/client.

This is very important as you will get the credit for TDS only on the basis of form no. 26AS and not as claimed by you. So in case you find any discrepancy, please seek clarification from the deductor. It may also happen due to omission of accounting of your invoices or non-payment of tax deducted by deducutor to the credit of the government.

For those investing in stock exchange or mutual funds

In case you invest in direct equity, you will have to get statement of account from your broker and statement from your depository for your demat account for shares sold and purchased during the year for computing the capital gains. You cannot only go by the bank statement as there may be some buy and sale transactions on the same day impact of which would not get fully reflected in your bank statement.

For your investments in mutual funds, please get a detailed statement of the transactions done during the year for your dealing with various mutual funds. Some of these transactions like STP may not reflect in your bank account and thus may go unreported. you can also request for capital gains statement from the mutual fund house or their respective registrar for cross checking your working.

For interest income

For those who invest in fixed deposits with banks should obtain an interest certificate for the whole year to ensure that all the interest income gets fully included in your ITR. For those following accrual system of accounting for the interest income will have to show accrued interest in respect of cumulative deposits. Even if you are following cash basis, you have to include the interest accumulated on deposits which have been renewed on maturity as these will not get reflected in your bank account.

Verification of transactions in form No. 26AS and your bank statement

Each one of you should download latest form No. 26AS to verify and ensure that all the income including interest are included in your income as well as to ensure that full tax credit for TDS as per your books is available here. As form no 26 AS now includes financial transactions entered into by you during the year, verify that the transactions recorded in 26AS belong to you and the respective income has been considered while making your tax working.



Please go through the bank statements for full year to find out any item of income which is not regular and may escape your attention. The bank account may also reflect some items of investments/expenditure for which you are eligible to claim tax benefits as all Chartered Accountants do not scan your bank statement for filing of your ITR.

Hope this discussion is useful for you.

- Advertisement -DISCLAIMER
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at businessleaguein@gmail.com

Exit mobile version