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The groundwork for your ITR for self-employed & Share market investor

ITR filing season is on. Before you actually sit down to fill out your ITR, you should do some basic work so that the actual process of filling out your ITR and numbers is smooth and seamless. Let us discuss what preparations we need to make in advance for this purpose.

If you are self-employed

Based on the total receipt of your business or occupation throughout the year, you can determine in advance whether you are eligible for the estimated tax. If your turnover exceeds the threshold, you will need to have your accounts audited by a chartered accountant and upload the audit report on the tax department's website. If you want to audit your accounts, you will have more time to file your ITR.

Those whose business receipts are subject to tax deduction at source should check the amount of tax credit reflected in Form No. 26AS and match it with your books of accounts. There may be some discrepancies due to year-end transactions or different methods of writing by you and your client/client. This is very important as you will get TDS credit only on the form number. 26 AS and not as you claim. So if you find any discrepancies, please seek clarification from the deduction. This can also be due to the omission of audit of your invoices or non-payment of tax deducted by the deductible to the government credit.

For those who invest in stock exchanges or mutual funds

If you invest directly in equities, you will need to get an account statement from your broker and a statement from your Demat account for the shares sold and bought during the year to calculate capital gains. You can't just go with a bank statement because there may be some buying and selling transactions on the same day which will not be fully reflected in your bank statement. For your investments in Mutual Funds, please get a detailed description of the transactions made during the year for your various Mutual Fund transactions. Some of these transactions, such as STPs, may not be reflected in your bank account and therefore may not be reported. You can request a capital gain statement from the mutual fund house or their respective registrar to cross-examine your work.

For interest income

People who invest in term deposits in banks should take an interest certificate for the whole year so that all interest income is fully included in your ITR. Those who follow the accounting system for interest income will have to show the interest accrued in respect of accumulated deposits. Even if you operate on a cash basis, you will need to include interest accrued on deposits renewed after maturity as they will not be reflected in your bank account.

Verification of transactions in Form No. 26AS and your bank statement

Download the latest Form No. 26AS for each of you to verify and ensure that all income including interest is included in your income as well as a full tax credit for TDS as per your books. verify that the transactions reported in 26AS belong to you and that the relevant income has been taken into account when your tax is levied. Please go through the bank statements for the whole year to find any item of non-regular income and it may escape your notice. The bank account may also reflect some of the investment/expense for which you are eligible to claim tax benefits as not all chartered accountants scan your bank statement to fill out your ITR. Form No. 26AS now includes the financial transactions you have made during the year.

We hope you find this discussion useful.

Introduction of Alliance Tax Experts

Alliance Tax Experts is a one-stop solution for all your Financial Needs. We are the leading Income Tax consultant, GST consultant & Company registration services provider in Mumbai, Navi Mumbai & all over Maharashtra, India.

We provide consultancy start from Company Registrations, Income Tax Filing, Accounting, GST Filing, Income Tax Audit, GST Audit services. We offer comprehensive compliances services for Proprietors, Partnerships, Private limited companies, limited liability partnerships, OPC private limited Companies, Trust and Individuals.

For any query, you may reach us on santoshpatil@alltaxfin.com or call on 9769201316

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