ITR filing 2023: What to do to ensure maximum income tax refund

Taxpayers must submit an income tax return to the government, commonly once a year, in order to disclose their earnings, deductions, and tax liabilities. Filing ITR allows you to calculate the amount of tax due to the government or the prospective tax refund from tax-saving investments. 

When you are entitled to get an income tax refund

A taxpayer is entitled to claim an income tax refund when the taxes paid on his behalf are more than his tax liability. The taxes paid by and on behalf of the taxpayer includes tax deducted at sources (TDS), tax collected at source (TCS) as well as taxes paid by the taxpayer himself like advance tax, and self-assessment tax.

“While filing your ITR for claiming a refund, please verify that the tax credit is visible in form no. 26AS. It is advisable not only to verify the details of all the tax credits available to you but also all the incomes which are shown Annual Information Statement (AIS),” said tax and investment expert Balwant Jain.

“While filing your Income Tax Returns, it is important to maximise your tax refund by taking advantage of all available opportunities.  

“File your ITR on time to expedite the refund process, choose the tax regime that suits you best, and avoid late filing to prevent penalties. Verify your returns promptly to ensure smooth processing of your refund. Identify all eligible deductions and exemptions beyond those reflected in Form 16, and reconcile your data to avoid any discrepancies. Lastly, validate your bank account to ensure seamless receipt of your tax refund. By adopting these strategies, you can make the most of your income tax refund and effectively manage your finances.” said Amit Gupta, MD, SAG Infotech.

Abhishek Soni, Co-founder & CEO of Tax2win, a Fisdom company suggested seven ways to save more tax than what is reflected in Form 16 by following the methods

Select the right tax regime which suits you better. For example, if you do not have enough deductions or exemptions to claim, it is advisable to select the new tax regime.

Claim all eligible deductions: Be aware of the deductions you are eligible for and ensure you claim them. Standard deductions include contributions to Provident Fund (PF), Public Provident Fund (PPF), National Savings Certificates (NSC), National Pension Scheme (NPS), life insurance premiums, medical insurance premiums, and home loan interest.

Maximize exemptions: Take advantage of exemptions available under the Income Tax Act, such as House Rent Allowance (HRA), Leave Travel Allowance (LTA), and exemptions for conveyance, medical expenses, and gratuity.

Validate Bank Account: When mentioning your bank account in your Income Tax Return (ITR), it is crucial to ensure that the account is correctly validated on the e-filing portal. This validation process is necessary because the income tax department credits tax refunds exclusively to bank accounts validated on their portal. This validation process needs to be done before filing the ITR.

File your Income Tax returns on time: Filing your tax return before the due date is crucial to avoid penalties and interest. Additionally, early filing allows for quicker processing and potential early refunds.

Review your tax return: Carefully review your tax return for accuracy and completeness before submitting it. Errors or omissions could lead to delays/notices or complications in processing your refund.

Verification of ITR: After filing the income tax return it is mandatory to verify the same within 30 days of filing. If not verified it will be treated as invalid and the person has to file a fresh return if the timing of filing has not been elapsed. If timing elapsed, he/she cannot file the return for that financial year.

“A taxpayer must ensure the return is filed accurately and all proofs are available for all deductions claimed. Ensure you have maximised section 80C, while the time to make any fresh investments for ITR of 2022-23 is now gone, if you have any expenses which are eligible to be claimed under section 80C, you can do so at the time of filing ITR. If you have taken any preventive health checkup that is also eligible to be claimed under section 80D. Make sure you claim deduction under sections 80TTA and 80TTB as per eligibility,” said Archit Gupta.

Updated: 10 Jul 2023, 01:21 PM IST