The very first thing it is advisable do is accumulate all related paperwork (see desk) and reconcile them to keep away from mismatch in info. Additionally, a number of adjustments have been made within the ITR types in search of extra info. Take for example ITR 1. The taxpayer has to offer an in depth break-up of wage revenue—when it comes to wage, income in lieu of wage, perquisites, exempt allowances and deductions. “The federal government has notified a brand new format of Kind 16 whereby this detailed break-up of wage should be given by the employer,” stated Archit Gupta, founder and CEO, Clear.
Those that haven’t submitted all tax-saving funding proofs to their employer must themselves collect related paperwork to say any tax breaks. “It’s advisable to match the identical with AIS (Annual Info Assertion) as nicely,” stated Yeeshu Sehgal, head of tax markets, AKM World, a tax and consulting agency.
Curiosity on PF
The present evaluation 12 months would be the first time that taxpayers have to declare curiosity earned on contributions in extra of ₹2.5 lakh of their provident fund (PF) account. This threshold applies to the contributions made by workers and never employers. It additionally contains contributions made to the voluntary provident fund (VPF). The contribution restrict is ₹5 lakh for presidency workers.
The Staff’ Provident Fund Group (EPFO) will preserve two separate accounts– non-taxable and taxable—for members who contribute over ₹2.5 lakh and compute tax on curiosity earned within the latter.
As per EPFO tips, tax might be deducted at supply (TDS) on the fee of 10% on annual curiosity the place the PAN is linked to EPF accounts, whereas TDS might be 20% in case the PAN just isn’t linked. Taxpayers ought to be aware that EPFO won’t deduct tax on the curiosity accrued if the TDS quantity computed is as much as ₹5,000, however that doesn’t imply that the taxpayer’s particular person tax legal responsibility is absolved.
The surplus curiosity is to be reported below revenue from different sources head, and if the TDS just isn’t deducted, will probably be added to the whole revenue and taxed as per slab charges.
“Taxpayers can import the main points of curiosity and tax deducted quantity from Kind 16A issued by the PF organisation or their respective Kind 26AS,” stated Gupta.
Capital positive aspects
Taxpayers who’ve bought a constructing or land in FY 2021-22 must disclose all info associated to the sale proceeds this 12 months onwards. “Sale of home property triggers capital positive aspects and extra info is being sought to make sure enhanced transparency in calculation of the associated capital positive aspects,” stated Saraswathi Kasturirangan, companion, Deloitte.
Below long-term capital positive aspects (LTCG) part within the ITR kind, taxpayers now must mandatorily give each the date of sale and buy of the property. That is performed as a result of LTCG from actual property, which triggers when the property is held for over 24 years by the taxpayer, qualifies for tax exemption if the positive aspects are invested as per part 54 (sale proceeds of residential property invested in residential property), 54EC (sale proceeds of residential property in authorities specified bonds) and 54F (sale proceeds of non-residential property in residential property). Declaring the date of sale and buy brings in transparency as as to whether the property is a long-term capital asset or to not qualify for these tax breaks.
Any prices borne in direction of renovating or bettering the home property that’s bought additionally qualify for deduction from the sale worth whereas computing capital positive aspects. Such prices could be listed to account for inflation. Taxpayers have to offer the unique price of enchancment additionally together with the listed price within the ITR kind.
Additionally, if the home was renovated a number of instances, the year-wise particulars of all such enchancment prices undertaken must be supplied.
“This rule solely applies to residential properties and never the sale of business properties,” stated Prabhakar KS, founder CEO, Shree Tax Chambers.
Reconcile AIS
Annual Info Assertion, launched in November 2021, is an exhaustive monetary assertion that incorporates info on all monetary transactions of a taxpayer, together with revenue from completely different sources, overseas foreign money buy, TDS and TCS, advance or self-assessment tax paid to the federal government, refund initiated, assertion of economic transaction that captures high-value transactions, and so on.
It can be crucial that taxpayers cross examine all of the incomes given in AIS with TDS certificates, curiosity revenue certificates and Kind 26AS as any unreported revenue that’s highlighted in AIS or a mismatch will result in scrutiny from the IT division.
If the taxpayer believes any info within the AIS is inaccurate, they need to submit suggestions to the IT division to get the error rectified earlier than submitting the ITR. “It’s advisable for taxpayers to reconcile the funding and revenue particulars and file the tax return based mostly on precise numbers,” stated Kasturirangan.
Any dispute decision can take 1-2 weeks, so it’s suggested that you simply submit suggestions, if any, on the earliest to keep away from defaulting on the ITR submitting deadline.
Supply: Live Mint