1. Choose correct ITR form
It is important to select the applicable ITR form depending upon the taxpayer’s residential status and income earned from various sources for an accurate filing. For example, form ITR-1 can only be used by a resident individual having total income up to Rs 50 lakh from salary, one house property and income from other sources. It cannot be used by a taxpayer who is a non-resident or a not ordinary resident or have capital gains for which form ITR-2 has to be used.2. Choose new tax regime or old tax regime whichever is more beneficial
The Finance Act, 2020 introduced a new optional tax regime for taxpayers with modified tax slabs and rates, in lieu of foregoing prescribed exemptions and deductions. Taxpayers will have the option to choose from the old and new tax regimes while filing the tax return. Salaried taxpayers can also change the regime, which they have already declared to their employer at the time of filing ITR.
3. Prefilled ITR forms
This year, ITR forms will import pre-fill information such as personal details of the taxpayer along with details of salary income, dividend income, interest income and capital gains as available in the Form 26AS. This would aid taxpayers in ease of filing ITR as most of the essential details would already be captured therein.
4. Verification of prepaid taxes with Form 26AS
It is pertinent for taxpayers to verify their prepaid taxes including tax deducted at source, advance tax and self-assessment tax with Form 26AS. Any discrepancy therein should be notified either to the employer (in case of salary income) or other payers (in case of other incomes) or banks (for advance tax/ self-assessment tax payments) for necessary rectification which is essential for seamless processing of the tax return by the tax department.
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