Income tax return (ITR) filing season is on, and the deadline for salaried taxpayers to file their return for FY 2025-26 is 31 July. It is understandable that when you are rushing through things, some mistakes could unknowingly creep in.
For instance, you could choose the wrong I-T form, overlook a deduction you are entitled to, or even opt for the wrong tax regime. Here, we give a lowdown on some important factors taxpayers should be aware of before filing their returns
6 key factors to be careful about
1. Timely return: At the outset, it is important to note that the last date to file a return for salaried taxpayers is 31 July, whereas self-employed persons have until 31 August. “It is important for taxpayers to file their returns before the deadline. Once the time is over, you can not opt for the old tax regime. After the deadline, the default regime kicks in,” says CA Pratibha Goyal, co-founder of PD Gupta & Company.
2. The right tax form: Another important factor to be mindful of is choosing the right income tax form. “Some taxpayers end up filing a return in ITR-1 even when they are supposed to use ITR-2 because they hold foreign assets in the form of mutual funds or stocks, or they hold directorship in a company. Taxpayers must understand that merely owning a foreign asset (and not selling it) is enough to file a return in ITR-2,” says Chirag Chauhan, founder of CA Chauhan & Company, a Mumbai-based CA firm.
3. Choosing the right regime: Additionally, taxpayers must check tax liability under both the regimes – old and new – before they choose one. CA Chauhan argues that only those taxpayers should opt for the old tax regime who have deductions of ₹8 lakh or more.
4. Cross-verify with AIS/TIS: Some taxpayers rely completely on Annual Information Statement (AIS)/Taxpayer Information Summary (TIS) for computing their taxable income, which – experts say – is not the best thing to do. Taxpayers should first compute their taxable income and then cross-verify the same against the figures disclosed in AIS/TIS. “These documents do not disclose your entire income. They could be underreporting your income in certain scenarios,” adds CA Chauhan.
5. If you changed jobs during the financial year: If you changed jobs during the financial year, then it is important to factor that in at the time of filing your return. Some taxpayers calculate their taxable income based on the Form-16 issued by their current employer, thereby overlooking income earned during the initial part of the year.
6. Investing in crypto: Finally, if a taxpayer happened to invest in virtual digital assets (VDAs) during the year, s/he must understand that the losses are not set off against the gains arising out of the sale of crypto assets. Moreover, there is a flat 30% tax on crypto gains.
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