Monday, June 3, 2024

Guide to Filing Income Tax Return for AY 2024-25

Filing your income tax return (ITR) accurately is crucial for compliance with tax laws and avoiding penalties. The Central Board of Direct Taxes (CBDT) has outlined 57 types of incomes and expenses to be reported in the Annual Information Statement (AIS) on the Income Tax portal. This guide simplifies the process of comparing your records with the AIS, providing feedback on discrepancies, and filing your ITR by the due date of 31.07.2024.

Step-by-Step Guide to File Income Tax Return

1. Prepare and Compare AIS Figures

Annual Information Statement (AIS) includes various types of incomes and expenses:

Type of Income/ExpenseDescription
SalaryMoney from your job
Rent ReceivedMoney from renting property
DividendMoney from company profits
Interest from Savings BankInterest from savings account
Interest from DepositsInterest from fixed deposits
Interest from OthersInterest from other sources
Interest from Income Tax RefundInterest on tax refunds
Rent on Plant & MachineryMoney from renting machines
Lottery/Crossword WinningsMoney from lotteries or puzzles
Horse Race WinningsMoney from horse race wins
PF Balance from EmployerProvident Fund balance
Interest from Infrastructure Debt FundInterest from infrastructure funds
Interest from Specified Company (Non-Resident)Interest from companies (for non-residents)
Interest on Bonds/Govt. SecuritiesInterest from bonds/government securities
Income from Units of Non-ResidentIncome from non-resident units
Income/Long-Term Capital Gain from Offshore Fund UnitsGains from offshore funds
Income/Long-Term Capital Gain from Foreign Currency Bonds/SharesGains from foreign bonds/shares
Income of Foreign Institutional Investors from SecuritiesIncome from securities for foreign investors
Income of Specified Fund from SecuritiesIncome from specified funds
Insurance CommissionCommission from insurance
Receipts from Life Insurance PolicyMoney from life insurance
Withdrawal from National Savings SchemeMoney withdrawn from savings schemes
Commission on Sale of Lottery TicketsCommission from selling lottery tickets
Income from Securitization Trust InvestmentsIncome from securitization trusts
Income from Repurchase of MF/UTI UnitsGains from repurchasing mutual funds
Interest/Dividends Payable to the GovernmentInterest/dividends owed to the government
Income of Specified Senior CitizensIncome for specified senior citizens
Sale of Land or BuildingMoney from selling property
Receipts from Transfer of Immovable PropertyMoney from transferring property
Sale of VehicleMoney from selling vehicles
Sale of Securities/Mutual Fund UnitsEarnings from selling securities/mutual funds
Off-Market Debit TransactionsNon-market transactions debited
Off-Market Credit TransactionsNon-market transactions credited
Business ReceiptsMoney from business activities
GST Sales TurnoverSales reported under GST
GST PurchasesPurchases reported under GST
Business ExpensesBusiness expenses
Rent PaymentMoney paid for rent
Miscellaneous PaymentsVarious other payments
Cash DepositsMoney deposited in bank
Cash WithdrawalsMoney withdrawn from bank
Cash PaymentsPayments made in cash
Outward Foreign Remittance/Purchase of Foreign CurrencyMoney sent abroad or used for foreign currency
Receipt of Foreign RemittanceMoney received from abroad
Payment to Non-Resident Athletes/Sports AssociationsPayments to non-resident athletes
Foreign TravelMoney spent on foreign travel
Purchase of Immovable PropertyMoney spent on buying property
Purchase of VehicleMoney spent on buying vehicles
Purchase of Time DepositsInvestments in time deposits
Purchase of Securities/Mutual Fund UnitsMoney spent on buying securities/mutual funds
Credit/Debit Card TransactionsTransactions using credit/debit cards
Account BalanceBank account balances
Income Distributed by Business TrustMoney distributed by business trusts
Income Distributed by Investment FundMoney distributed by investment funds
Donations ReceivedMoney received as donations
Receipt on Transfer of Virtual Digital AssetsMoney from digital assets
Winnings from Online GamesMoney from online games

2. Steps to Check and Compare with AIS

  1. Log in to Income Tax Portal: Visit the Income Tax e-Filing portal.
  2. View AIS: Go to ‘Annual Information Statement (AIS)’ to see all your incomes and expenses.
  3. Compare Figures: Match the figures in AIS with your records. Check for any discrepancies.

3. Provide Feedback on AIS Figures

  • Correct: If figures match, mark them as correct.
  • Incorrect: If figures don’t match, provide the correct information.
  • Missing: If any income or expense is missing, add it.

4. File Income Tax Return

  1. Go to 'e-File': Select 'Income Tax Return'.
  2. Select Assessment Year 2024-25.
  3. Fill in Details: Provide your income, deductions, and tax paid details.
  4. Verify and Submit: Verify the information and submit the return.

Precautions While Filing Income Tax Return

Download AIS and Form 26ASCheck actual TDS/TCS/tax paid. Reconcile discrepancies with the Employer/Tax Deductor/Bank.
Compile DocumentsRefer to bank statements, interest certificates, Form 16, Form 26AS, investment proofs, etc.
Verify Pre-filled DataEnsure details like PAN, address, contact details, bank account details are correct.
Choose the Correct ITR FormSelect from ITR-1 to ITR-7 based on your income sources and residential status.
E-File on TimeFile before 31.07.2024 to avoid late fees and other penalties.
E-Verify ReturnE-Verify the return or send the signed physical copy of ITR-V to the Centralized Processing Center.

Understanding Key Forms and Processes

Form 26AS

What is it?A statement showing TDS, TCS, Advance Tax, and Self-Assessment Tax details.
PurposeServes as a comprehensive record of tax credits available in your account.
Common IssuesNon-filing or incorrect filing of TDS return by the deductor, incorrect PAN or challan details.
CorrectionContact the deductor to file or revise the TDS return. Request the bank to correct challan details.

Choosing the Correct ITR Form

Use the "Help me decide which ITR Form to file" option on the e-Filing portal to determine the correct form based on your income sources and taxpayer type.

Advance Tax

What is it?Taxpayers with tax liability over ₹10,000 must pay advance tax in quarterly installments (June, September, December, and March).
Self-Assessment TaxCalculated after filling out the ITR form and must be paid before submission.

Common Terms

AllowancesFixed amounts apart from salary (e.g., travel allowance) that increase taxable income.
PerquisitesAdditional benefits received from employment, taxable based on their nature.
DonationsTax deductions vary based on the recipient entity and donation amount.
E-Filing vs. E-PaymentE-Filing is submitting the ITR, while e-payment is paying the tax online.

After Filing the ITR

Verify ReturnUse e-Verification for convenience.
Address ErrorsFile a revised return if errors are found post-submission.
File ITR-UFor missed previous returns, file ITR-U for the last two years.

Consequences of Late Filing

Late FeesUp to ₹5,000 for filing after the due date.
InterestPayable on unpaid tax.
Loss of DeductionsCertain deductions and exemptions may not be available.


ClaimExcess tax paid can be claimed as a refund in the ITR.
ProcessAfter ITD processes the return, the refund amount is credited to your bank account.

By following these steps and taking necessary precautions, you can ensure accurate and timely filing of your income tax return for AY 2024-25