Every business owner in India must submit an income tax return (ITR) either by e filing of income tax return or by paper filing. It’s a way to tell the government about your income and pay taxes. Therefore, knowing the do’s and don’ts is important while filing ITR for your business. In this article, we will guide you through the basics of ITR filing for business income, proprietors, and self-employed individuals. We will also share tips and best practices to help you file your ITR correctly and smoothly.
The Do’s While Filing ITR for Your Business
To ensure a smooth and successful e-filing for income tax return, here are some essential do’s to keep in mind.
● Double-Check Your Calculations
Accuracy is paramount when filing your ITR. Double-check all calculations to minimize errors. Utilize software tools or seek professional assistance if needed. Errors or discrepancies can lead to penalties or delays in processing your return.
● Maintain Document Organization
The first and most crucial step in submitting your income tax returns is having all your papers available. This covers your previous tax receipts, income and investment receipts, Form 16, Form 26AS, etc. Keeping these documents on hand when filing will save you time and simplify the procedure. Even after you have completed the form, you should keep the records safe in case your return is brought in for review later.
● Do File on Time
Respect the deadlines set by the tax authorities and file your ITR on time. Missing the last date for filing ITR can result in penalties for late filing of ITR and interest charges. Be aware of the due dates and plan accordingly to avoid unnecessary stress and financial implications.
● Do the ITR Verification
Your work is still left after you’ve e-filed your tax return. The ITR-V must then be signed and sent to CPC Bangalore, or it can be e-verified via Netbanking, EVC, or any other ways the ITD provides. If the verification is received/completed within 120 days of e-filing the return of taxes, your return will be processed, and any refunds due will be postponed.
The Don’t While Filing ITR for Your Business
Now let’s explore the key don’ts to keep in mind while e filing of income tax return for your business.
● Don’t Ignore Compliance Requirements
Tax laws and regulations are subject to change, so it’s important to stay updated. Ignoring compliance requirements can lead to penalties and legal complications. Keep track of changes in tax regulations and consult with a tax professional if needed to ensure compliance.
● Refrain from Mixing Personal and Business Expenses
Maintaining a clear distinction between personal and business expenses is vital. Avoid co-mingling funds or using business accounts for personal transactions. Mixing personal and business expenses can complicate calculating and claiming deductions accurately.
● Don’t Get Mixed Up Between FY and AY
A typical mistake taxpayers make is confusing the Assessment Year and Financial Year, which results in the information of another fiscal year being recorded for the return being submitted for another fiscal year. This might complicate your return and change your tax obligation. As a result, verify that the correct information is in the appropriate form for the correct year.
● Don’t Hesitate to Seek Professional Help
If you find filing your business’s ITR overwhelming or complex, feel free to seek professional assistance. Tax professionals can provide expert guidance, ensure compliance, and help optimize your tax position. They can help you navigate intricate tax laws and regulations, providing peace of mind during tax season.
Final Thoughts
Filing ITR for your business is a legal obligation and a way of contributing to the nation’s development. However, it can be challenging if you are not well-versed with income tax laws and procedures. Therefore, you should follow this article’s do’s and don’ts to avoid errors, delays, or penalties while filing your ITR. You should also consult a tax expert or use an online tool to help you file your ITR accurately and efficiently. Remember, filing your ITR on time and correctly can save you from a lot of hassle and benefit you in the long run.
