Income Tax Return: How to prepare for hassle-free tax compliance? Here is a 10-point checklist

2 weeks ago 5

4 min read 29 Apr 2024, 01:33 PM IST

Tax filing play is approaching, program up to debar last-minute hassles. Check ITR signifier eligibility, residential status, take taxation authorities wisely, support due documentation and more.

Prepare for taxation filing play by checking ITR signifier eligibility, residential status, choosing taxation regime, and maintaining due documentation.

Tax filing play is coming and conscionable similar summertime individuals indispensable program to bushed the heat. To debar last-minute hassles and marque definite that taxation benefits and claims are correctly reported and documentation is proper, enclosed beneath is simply a ten-point checklist.

Selecting the close ITR form: Choose the due ITR signifier for the FY 23-24 based connected the criteria summarised below.

ITR Form	When are you eligible?	When are you ineligible?
ITR – 1	Must beryllium an Ordinary Resident Taxable income up to ₹50 Lakhs from the following: § salary/pension, § 1 location property § different sources § Agricultural income < ₹5k	If you are a Non-resident If you are a manager successful a company If you clasp unlisted equity shares If you person much than 1 house If your Agricultural income > ₹5k If you person overseas income oregon assets
ITR – 2	If you are not eligible to record ITR-1 and wherever you bash not person immoderate concern oregon nonrecreational income	If you person immoderate income from concern oregon profession
ITR – 3	If you person concern income oregon nonrecreational income If you are not eligible to record ITR 1, ITR 2 oregon ITR 4	None
ITR – 4	Resident Individuals with a full income of up to ₹50 Lakhs including concern income computed arsenic per presumptive taxation.	Similar to ITR 1

Residential presumption determination: This determination of residential presumption is based connected your carnal beingness successful India.

You would beryllium a nonmigratory successful India if you fulfill either of the 2 basal conditions:

(a) Stay successful India is ≥ 182 days successful FY 23-24.

(b) Stays successful India is ≥ 60 days** successful FY 23-24 and ≥ 365 days successful the preceding 4 years.

To suffice arsenic not ordinarily resident, measure if you conscionable immoderate 1 of these secondary conditions:

Non-resident successful India for 9 of past 10 FYs, OR
Spent 729 days successful India implicit 7 preceding FYs, OR
Indian Citizen/ PIO coming to sojourn India with income ₹15 lakhs from Indian sources and enactment 120 days and 182 days during FY 23-24, OR
Deemed resident.

To suffice arsenic an mean resident, you indispensable not conscionable immoderate of the secondary conditions.

If you are an Indian national settled overseas and a non-resident arsenic per the basal conditions, you could beryllium treated arsenic a ‘deemed resident’ erstwhile you person an income ₹15 lakhs from Indian sources.

Choosing betwixt taxation regimes: Unless you person already made this choice, this is your last accidental to measure whether to opt for the caller default taxation authorities oregon instrumentality with the earlier regime. Form 10IE is mandatory if you opt retired of the caller authorities erstwhile you person a concern income.

Documentation for income sources: Key supporting documents to beryllium maintained:

Salary income: Obtain Form 16 and Form 12BA from your employer.
Investment income: Collate slope statements and demat accounts, dividend statements, and involvement certificates.
Rental income: Check your statement and slope connection to reconcile with your rental income. Keep municipal taxation receipts and lodging indebtedness statements connected record.
Business income: Where applicable, get your accounts audited and guarantee disbursal records, income invoices and slope statements are kept connected record.

Clubbing of household member’s income: If you person insignificant kids, who person immoderate income from investments, bash not miss having their income documents and nine their income successful your return. Further, support way of the income of your spouse from talented assets and see this successful your return.

Also Read: Income taxation benefits connected 2nd location indebtedness — Explained

Deductions and exemptions: Retain receipts for taxation deductions nether your chosen regime. Keep records of security premiums, donations, and eligible investments (e.g., PPF, ELSS, NPS). For superior gains exemptions, sphere acquisition deeds and reinvestment proofs.

Foreign taxation recognition and taxation residency certificate: If you are a nonmigratory individual, you tin assertion recognition for overseas taxes connected your doubly taxed overseas income. Evaluate pact conditions, and timely record Form 67 on with overseas taxation outgo proofs.

If you are a non-resident, guarantee obtaining a taxation residency certificate from the Foreign Regulators and measure the filing of Form 10F to assertion pact benefits.

Schedule FA: Mandatory for mean residents, detailing overseas assets and income. Jointly owned properties, properties with beneficial interest, and the signatory successful overseas slope accounts and overseas trusts are immoderate of the mandatory disclosures successful Schedule FA.

This checklist tin assistance you hole for timely taxation filings and alteration you to navigate the filing process smoothly. This volition besides smoothen the process of responding to immoderate inquiries. Stay proactive, enactment informed, and attack the taxation play with confidence!

Rupali Ashar, Associate Partner Legacy Growth

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Published: 29 Apr 2024, 01:33 PM IST