Choosing the correct ITR Form for an Individual Taxpayer
Posted under Income Tax on June 24 2024
As the tax season approaches, salaried individuals are gearing up to file their income tax returns (ITR) with the issuance of Form-16 by employers.
To streamline the process and avoid last-minute hassles, it’s advisable not to delay filing. Ensuring all necessary documents are in order, including Form 26AS and the Annual Information Statement (AIS), is crucial before beginning the filing process.
One of the initial steps is selecting the correct ITR form. For salaried individuals, this choice typically lies between ITR-1 and ITR-2. ITR-1 is suitable for residents with income below Rs 50 lakh, including salary, pension, and modest savings. Those with additional complexities like capital gains, foreign assets, or directorships should opt for ITR-2.
It’s essential to avoid errors such as claiming ineligible deductions or opting for the wrong tax regime. With the new default tax regime effective from the financial year 2023-24, proper documentation becomes crucial, especially if switching back to the old regime for deductions.
Moreover, disclosures regarding foreign assets, even if they show no transactions, are mandatory in ITR-2. Non-compliance could result in penalties under the Black Money Act.
For expert assistance and timely Tax Filing services, feel free to contact us. We’re here to help you file your taxes with confidence and accuracy.