In case you are engaged in business or profession, please verify whether you are eligible to opt for presumptive taxation scheme based on t your gross receipts or turnover.
Before you actually sit down to upload your income tax return (ITR) or visit your Chartered Accountant for filing your ITR, it is better you do some ground work to save the time as well to ensure that full particulars are submitted without any omission. Let us discuss what preparatory ground work you should do for filing of your ITR.
By now all of you must have received your Form No. 16 from your employer if not please get it immediately as you will need it for filing of your ITR. Once you receive your Form 16, I request you to check this form thoroughly to verify that your employer has correctly shown the exempt allowance like House Rent Allowance as exempt. Also verify that proper deductions under Chapter VIA for various items of investments and expenditures have been given to arrive at the taxable salary. It may happen that these exempt allowance or deductions are not reflecting in the form No. 16. This may happen due to any reason like delay in submitting the proof or due to oversight of finance department of your Company. The deductions may be for items like life insurance premium, health insurance premium, home loan repayment, interest on education loan or school fee etc. If proper deductions have not been given against your salary please bring it to the notice of your consultant so that he makes proper claim for such omitted deductions while filing the ITR.
Please also verify that the amount of gross salary is correctly shown in form no. 16 as per the salary slips received or amount credited in your bank account after accounting for various deductions like PF, Profession tax and income tax etc.
If you are engaged in business or profession
In case you are engaged in business or profession, please verify whether you are eligible to opt for presumptive taxation scheme based on t your gross receipts or turnover. In case the turnover exceeds the prescribed limits, the books of accounts have to be audited and the audit report needs to be uploaded to the tax department website. In case tax is deducted from your income prepare a reconciliation of the amount of invoices and payments received. Please verify that the amount of TDS as per your books of accounts is duly reflected in your form No. 26AS, which can be download from the official income tax site. In case there is any variation you can seek clarification from the tax deducutor. It may also happen due to various reasons like accounting of invoices in different accounting years or non deposit of tax deducted by deducutor to the government
If you have Capital gains
For those who are mutual fund investors, please get a detailed statement of the transactions done during the year. Some of these transactions like STP may not reflect in your bank account and thus may go unreported. In case you are investing in shares through broker please get the detailed statement. Verify that all the transaction as appearing in the statement are properly accounted for your in your income computation. You need to be carful particularly for the intra-day transactions where some shares have been bought against shares sold on the same day which is not reflecting in your bank statement.
In case you have made fixed deposits with banks, please obtain interest certificates for the whole year from the bank to ensure that all the interest income gets included in your ITR. In case of cumulative deposits you will have to offer the interest income in case you are following accrual system of accounting for the interest income. In case you are following mercantile or cash basis, you will have to include the interest accumulated in case of any matured fixed deposit reinvested fully without receiving any interest in your bank as the interest in such case is assumed to have been received by you.
Verification of transactions with form No. 26AS
Please download the latest form No. 26AS to verify and ensure that all the interest shown in this is being offered for tax as well as to ensure that full tax credit for TDS as per your books is available here.
Since the content of 26AS is expanded from this year to include 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.
I am sure this ground work you will be in a better position to disclose your income properly and fully.
(The writer is a tax and investment expert and can be reached on email@example.com and @jainbalwant on twitter.)