Tax Filing Essentials
The deadline for filing non-tax audit returns for assessment year (AY) 2022-23 will be July 31, 2022. All new returns and their utilities are firmly in place.
Tax year means the twelve-month period beginning on April 1 and ending on March 31 of the year following the year for which the return is filed. Income from one year is taxable the following year. The year in which the income is earned is known as the prior year (PY) and the year in which this income is assessed for tax purposes is the assessment year.
In the current case, the previous year (PY) is from April 1, 2021 to March 31, 2022, while the assessment year (AY) will be from April 1, 2022 to March 31, 2023. The new tax department The e-filing portal https://bit.ly/3NPoZ64 with reports including the Taxpayer Information Summary (TIS), Annual Information Statement (AIS) and Form 26AS facilitated the filing of the “tax return”. In addition, there are documents that must be on hand before filing. Let’s review the few most important documents.
In the case of an employee, Form 16 is the most important document required to file their declaration. This is a form of withholding tax certificate (TDS) issued to an employee by their employer providing details of salary paid, taxes deducted and deposited with the government during the year former. An employer is required to issue said certificate to all employees no later than June 15 of the following year.
In case of sale of a property sold with a value of Rs 50 lakh or more during the previous year 2021-22, the purchaser or purchaser is liable to deduct the applicable tax, remit it to the government and issue a Form 16B to the seller within 15 days of the due date for submitting the Form 26QB.
The last form in the series is Form 16C, intended for those who pay monthly rent of Rs 50,000 or more. They are also required to deduct this applicable tax, remit it to the government and issue Form 16C to the owner of the given property within 15 days of the due date for providing Form No. 26QC. All the aforementioned forms 16 are accessible after logging on to the Department’s TRACES portal
https://bit.ly/2GOMgqb subject to submission and filing of the corresponding declarations by the parties concerned.
Interest income certificates
Generally, banks, post offices and other financial institutions issue interest income and interest certificates to their depositors. These will be extremely useful in accurately capturing details of one’s interest income on one’s return and also in claiming tax deductions of up to Rs 10,000 under Section 80TTA. However, this is only allowed for interest earned on a savings account. In case of non-availability of these certificates, one should check his updated bank book entries for the same.
Specified tax-saving instruments
To benefit from such a deduction for investment in tax-saving instruments, a taxpayer is required to present all the necessary evidence collected from the person concerned. As a general rule, employees are asked to present their proof of investment and expenditure to their employer well before the end of the accounting year concerned to decide whether to deduct a higher tax under the old regime or do not deduct applicable taxes. If submitted, the same will be reflected in the aforementioned Form 16 and the system will pre-populate them in their yet to be filed draft return. If one has omitted to submit them, the same can be claimed when filing his declaration. Thus, proof of investments and expenses is essential.
Capital gains from disposal of assets
Capital gains are taxable when they result from the sale of property, stocks and mutual funds. To calculate the capital gains – short or long term – from the sale of a property, land and building or real estate, one must have his deed at hand of sale, its deed of purchase and details of the cost of the improvements. From AY 2022-23, some additional entries should be provided such as the date of purchase and sale of the land/building, the year in which the money was spent for its improvement, the cost of acquisition and the indexed acquisition cost. Also, if the property being sold is located outside of India, the details of the buyer should be declared in their return. Additionally, gains generated from cryptocurrency transactions in the 2021-22 fiscal year must also be reported from now on.
Investments in unlisted shares
Those who held unlisted shares in the previous year 2021-22 are required to report them in their returns. Details required to file the statement include: company name, type and PAN, opening balance as of April 1, 2021, acquisition cost, unlisted shares acquired during the year with date of purchase, the nominal value of the shares, the issue price per share in the event of a new issue, the purchase price per share, the unlisted shares sold during the year and the amount received from them. ci, the acquisition cost and the closing balance as of March 31, 2022.
Annual Information Statement
The IT department has rolled out a new Annual Information Statement (AIS) to provide a comprehensive statement to a taxpayer containing his various entries related to the financial transactions made by him during a fiscal year, gathered from various sources at the back end. The Ministry also gave the possibility of entering the comments of the person evaluated and the possibility of rectifying them before filing their declaration.
With just 45 days left, it’s time to sit down, take note of the ‘new feedback’ and come to terms with AIS, TIS and Form 26AS.
Although the filing of tax returns is becoming easier by the day, it is advisable to avail yourself of the advice of a tax professional on the critical aspects, if the situation warrants it.