The income tax return filing for the financial year 2023-24 has started on the Tax Portal.
Although the IT forms are available, individuals who are salaried should wait to file their returns until June 15, 2024, according to a report by ITD. This is because their Annual Information Statements (AIS) and Form 26AS are typically fully updated by May 31, 2024, and companies have time to issue employees Form 16 by June 15, 2024.
While some information may start appearing in AIS and Form 26AS before May 31, 2024, the data for December 2024 to March 2024 is usually updated by May 31, 2024.
Salaried people who file IT returns based on incomplete data may face penalties if their income is not properly reported due to missing information. Therefore, it is sensible to wait until June 15, 2024.
Salaried individuals have a due date to file their ITR until July 31, 2024, for the financial year 2023-24 (assessment year 2024–25).
Banks, sub-registrars, and other financial institutions must submit a Statement of Financial Transactions (SFT) to the income tax department annually on or before May 31, 2024. SFTs provide the income tax department with information on various transactions carried out by taxpayers during the financial year.
These statements encompass income from shares, mutual funds, dividends, interest from savings bank accounts, fixed deposits, public provident fund accounts, credit card bill payments, property sales, cash deposits, and more. The AIS, accessible to taxpayers, is updated once these institutions file their SFTs.
AIS provides a comprehensive record of an individual's financial transactions, regardless of whether tax was deducted or not. It includes details such as total salary income, tax deducted and deposited, and interest earned from savings bank accounts, even if no tax was deducted on the interest.
When it comes to tax deducted at source (TDS) on incomes, the tax deductor, which can be companies or banks, has until May 31, 2024, to file a TDS return for the last quarter of the fiscal year. Although tax is deducted and deposited monthly, TDS returns are filed quarterly.
Sreedhara S, backend from Team IN Filings, an income tax return filing platform, explains, "A tax deductor is required to file TDS/TCS returns by May 31, 2024, for the tax deducted in the last quarter of a financial year (between January and March). Further, banks and other financial institutions are required to file SFT by May 31 to update the data in AIS. Hence, until the TDS/TCS return and SFT are filed, the information available on the income tax portal via AIS and Form 26AS is incomplete."
Filing an income tax return using incomplete information from AIS may result in an individual receiving an income tax notice for underreporting income due to relying on this incomplete data.
As per income tax regulations, a deductor must provide a TDS certificate after filing a TDS return. The deadline for issuing TDS certificates is 15 days from the date of filing the TDS return. Therefore, your employer should provide you with Form 16 no later than June 15, 2024.
Additionally, if banks, mutual funds, or companies have deducted taxes during FY 2023–24 (which ended on March 31, 2024), they must issue Form 16A to individuals by this date. Although TDS returns can be filed before the deadline and TDS certificates can be issued earlier than June 15, in most cases, the certificates are typically issued by this date.
Your tax advisor should verify that the tax deducted as shown in Form 16 or Form 16A is consistent with the information in AIS and Form 26AS. Any discrepancies may lead to difficulties for the taxpayer.
Damodharaa R states from Prakasha & Co. firm that "the income tax department can send tax notices if the information available to them via an individual's AIS/Form 26AS does not match with what the individual has mentioned in the income tax return. The tax department will allow tax credit on what is shown in Form 26AS/AIS."
It is important to note that Form 16 (the TDS certificate) simplifies the process of filing tax returns for salaried individuals. The TDS certificate consists of two parts: Part A and Part B. Part A displays the taxes deducted during the financial year, while Part B shows the total salary income paid by an employer and the tax deducted from this salary. Any deductions claimed by employees (under either the old or new tax regime) will also be reflected in Form 16.
Filing an incorrect income in your income tax return can lead to serious consequences. The assessing officer may classify this as either misreporting or under-reporting of income, resulting in penalties ranging from 50% to 200% of the tax payable on the under-reported amount. These penalties are imposed under Section 270A of the Income Tax Act, 1961.
According to Prakash Cr from Prakasha & Co., "If the income is declared less than actual due to misreporting of income, then the penalty will be 200% of the tax payable on such misreported income. However, if the income is under-reported due to any other reason (such as failure to report income in the ITR), then the penalty will be 50% of the tax payable on the under-reported income."
Therefore, it is crucial to ensure that the income reported in the ITR is accurate. If an individual discovers that they have filed their ITR based on incorrect income information, they have the option to file a revised ITR by December 31, 2024. Nevertheless, it is always advisable to consult your tax advisor to file the correct original ITR using accurate and complete income information.
In cases where no TDS has been deducted from your income and you have complete information about your total income earned from various sources during the period from April 1, 2023, to March 31, 2024, you may proceed with filing your ITR without waiting until June 15, 2024.
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