From FY21, a new concessional tax regime has been introduced. Accordingly, taxpayers will get the opportunity to select between the old and new tax regimes while filing the tax return. If you are a salaried individual and would like to change the option communicated to the employer, it can be done at the tax return stage.

Plan of action: Collate all the relevant information and documentation required for filing the tax return to avoid any misreporting or inaccurate reporting of income. Also, it should be made sure that all sources of income, including the exempt income such as PPF, is duly reported in the tax return. Before filing the tax return, reconcile all sources of income with the data reported in the tax return form. This will help in the seamless processing of tax return.

Evaluate tax liability in advance and make the necessary tax payments within the due dates to avoid levy of interest applicable on delayed tax payments.

Based on the sources of income, one should choose the correct tax return form while filing the tax return. If the taxpayer uses the wrong tax return form, he/she may receive a defective return notice from the ITD. To illustrate, if a salaried individual has capital gains or foreign assets/income, ITR 2 should be filed.

When to file tax return: According to the Income Tax Act, an individual taxpayer having income from a business or profession exceeding the prescribed threshold needs to get the books audited and file tax returns by 30 November. However, individuals with no requirement to get the books audited should file tax return within the specified due date, i.e., 31 July of the succeeding financial year. This due date has been extended to 30 September for FY21.

In case you miss these extended deadlines, there is an option to file a belated return up to 31 December, which has recently been extended to 31 January 2022. However, a late fee of ₹5,000 is applicable on the filing of such belated return.

The Central Board of Direct Taxes (CBDT) has clarified that the due date for filing the tax return shall not absolve the taxpayer from paying tax before the original return filing date. Any delay in tax payments beyond the original date of ITR filing will attract additional interest.

However, the CBDT has provided relief from levy of interest in the following cases: (a) If self-assessment (SA) tax payable does not exceed ₹1 lakh, and (b) for resident senior citizens not carrying on business or profession, the SA tax paid up to the original due date for ITR filing shall be treated as advance tax and no interest shall be levied on such amount for belated filing of return.

The ITD is making continuous efforts to improve the taxpayer experience. Now, it is the taxpayers’ responsibility to file the ITR on time and pay the due taxes.

The new e-filing portal has been facing initial hiccups. However, it is expected that a state-of-the-art interface will be available to taxpayers by the time they start filing their tax returns.

Source: https://www.livemint.com/money/personal-finance/what-to-keep-in-mind-while-filing-i-t-return-of-fy21-11626034593492.html