New Delhi: As March 31 deadline nears, individuals queue up to file income tax returns for a particular financial year or an assessment year. While filing the income tax returns, a person should stay extra careful to avoid the last-minute income tax calculation mistakes. To assess the income tax liability, individuals should gather all the necessary documents which are required for the process.
Here are five tips to avoid last-minute income tax calculation mistakes
Collate all the investment proofs
An individual should collate all the investments made in a particular financial year for the purpose of tax saving and other regular investments as well such as tax saver fixed deposits (FD), Equity Linked Saving Scheme (ELSS), Public Provident Fund (PPF), stock market investments, contributions to Employee Provident Fund (EPF), etc.
Combine the earnings from various sources
Income earned from various sources such as salary, capital gains on real estate assets, equity investments, interest earned on fixed deposits, savings account, recurring deposits, dividend earnings, rental income should be summarised which can help to arrive at the total earnings in a financial year.
Sum up other deductible expenses
All the expenses should be added on which income tax deductions can be claimed such as medical expenses, interest paid on home loans, an additional deduction for first-time buyers, premiums paid for insurance policies, etc.
Collect all necessary documents
All the necessary and relevant documents required for filing income tax returns should be collected well in advance such as Form 16, Form 26AS. Form 16, issued by the employer, includes salary breakup, taxes paid on your behalf, Tax Invoice Number (TAN) of the employer, allowances paid by the employer, TDS and other deductions, while, Form 26AS provides the advance taxes paid, tax deducted by the employer from the income.
Individuals should do a final review of all the aforementioned documents for assessing the income tax liability for a particular financial year or an assessment year.