Tuesday, May 21, 2024
HomePersonal FinanceTaxpayer Attention! Keep these 5 things in mind while filing ITR, otherwise...

Taxpayer Attention! Keep these 5 things in mind while filing ITR, otherwise income tax notice may come, see details

Income Tax Return Filing Many information is missed by us while filing income tax return. In such a situation, many times the Income Tax Department also sends notices to us. Let us know what things we should keep in mind while filing ITR.

In 2023, there are certain changes and updates that taxpayers should be aware of when filing their Income Tax Return (ITR). Staying informed of these changes is crucial to ensure accurate filing, as well as to maximise the benefits and deductions available.

Filing your ITR with incorrect or outdated information also increases the chances of errors. Such mistakes can trigger tax audits or investigations by the tax authorities, leading to additional scrutiny, stress, and potential financial liabilities. Keeping track of changes helps you avoid errors and ensures that your ITR is filed accurately. Being aware of the latest requirements ensures that you fulfill your tax obligations accurately.

Although there are not many changes this year, there are still a few significant aspects that you should consider when filing your ITR. For example, you need to report income from crypto and other virtual digital assets (VDA), need to give Donation Reference Number to claim 80G deduction and report turnover from intraday trading, among others.

Tarun Kumar Madaan, Tax Head at Coherent Advisors, explains in detail five changes you should know while filing ITR for 2022-23.

1. Reporting of income from virtual digital assets

VDA encompasses crypto assets. The income generated from the transfer of VDAs will be subject to taxation at a rate of 30 per cent and applicable surcharge and cess. It is important to note that you cannot avail deductions for any expenses, except for the cost of acquisition if applicable, when calculating such income.

Schedule VDA requires details such as the acquisition date, transfer date, category of income for taxation, acquisition cost in case of a gift, and consideration received. If you have income from VDA, you cannot file ITR-1 or ITR-4. Instead, such income can be reported on form ITR-2 or ITR-3. Such income can be taxed either under the head of business income or capital gains.

2. Details of opting out of New Tax Regime

An individual or Hindu Undivided Family (HUF) has the option to choose an alternative tax regime under Section 115BAC. If the assessee has income from business or profession, they can exercise this option but can withdraw it only once for a previous year, excluding the year in which it was initially exercised. Once the option has been withdrawn, the assessee is no longer eligible to exercise it again under this section, unless they no longer have any income from business or profession. To opt out of the regime, the assessee must electronically submit Form 10-IE through the e-filing portal.

In this year’s ITR Form, the assessee needs to provide the details if they have ever opted out of Section 115BAC in earlier years. If the taxpayer has opted out, he is required to give details of the Assessment Year in which said option is opted out, the date of filing and the acknowledgement number of Form 10-IE.

3. Details of ARN (Donation Reference Number) to claim 80G deduction

If you are claiming a deduction under Section 80G, it is essential to have the donation receipt and the donation certificate in Form 10BE readily available. To claim the deduction, taxpayers need to provide the details of their donations in the applicable ‘Schedule 80G’ in the ITR form.

One must ensure that donation information is entered in the correct table. In the current year’s ITR form, a new column has been added to ‘Table D’. This column requires disclosure of the ARN (Donation Reference Number) for donations made to entities where a 50 per cent deduction is allowed, subject to the qualifying limit. The ARN should be obtained from the donation certificate issued in Form 10BE by the donee institutions and should be mentioned in the ITR.

4. Reporting of turnover from intraday trading

Profit or loss resulting from intraday trading, which is considered a speculative transaction, is subject to taxation under the category of business income rather than capital gains. This year’s ITR form includes a specific section, Part A–Trading Account, where individuals are required to provide separate information regarding their intraday trading activities. The ITR forms now require details such as the turnover from intraday trading and the income from intraday trading that has been transferred to the Profit and Loss account.

5. Disclosure of income on which Section 89A relief claimed

Section 89A offers tax relief on income from retirement benefit accounts held in a country specified by the authorities. If an individual has claimed such relief, they are required to provide the relevant information in Schedule Salary.

Shyamu Maurya
Shyamu Maurya
Shyamu has done Degree in Fine Arts and has knowledge about bollywood industry. He started writing in 2018. Since then he has been associated with Informalnewz. In case of any complain or feedback, please contact me @informalnewz@gmail.com
RELATED ARTICLES
- Advertisment -

Most Popular

Recent Comments