How to maximise your income tax refund while filing your Income Tax Return?

Taxpayers must submit ITR to the government to disclose their earnings, deductions, and tax liabilities. If the tax paid exceeds the taxable income, the taxpayer is eligible for a refund

The last date to file your Income Tax Return (ITR) for the financial year 2022-23 is 31st July 2023. If the tax amount paid exceeds the taxable income, the taxpayer will become eligible for a refund. 

Every taxpayer needs to submit his ITR to the government once a year, in order to disclose his earnings, deductions and liabilities. Filing ITR allows you to calculate the amount of tax due to the government or the prospective tax refund from the tax-saving investment.

There are rumours that one cannot save tax more than what is shown in Form 16. However, the reality is different, one can save more tax than Form 16 and claim higher refunds. Refund is a function of processing, the sooner it is processed, the faster you get the refund. It is always advisable to pay your tax sooner.

 

File your ITR on time

It is very important to file your ITR on time before the last date to avoid any penalties, and it is one of the best ways to get maximum refunds.

A taxpayer needs to submit his ITR within the due date prescribed under section 139(1) of the Income Tax Act. Delay in filing the ITR attracts late fees under section 234F, which can be Rs 5000 if the taxable income is Rs 5000.

Select the correct tax regime

Taxpayers will be able to select the tax regime under which they want to file their ITR. It is significant to select the right tax regime that suits your needs.

If you have chosen the wrong regime earlier, you can change it now and switch to the correct regime before filing your ITR.

Verify your e-return

Every taxpayer needs to verify the income tax return within 30 days of filing the ITR. In case, the return is not verified it will be treated as invalid, and the taxpayer has to submit the ITR again (if the deadline has not ended).

Claim deductions and exemptions

Identify the deductions and exemptions one can claim from the taxable income. The amount reduces your taxable income and consequently increases the amount of refund.

Public Provident Fund (PPF), National Savings Certificate (NSC), National Pension Scheme (NPS), life and medical insurance premiums and home loan interests are eligible for standard deductions. 

Validate bank account

It is very important to validate your bank account and make sure that you correctly verify your bank account on the income tax return portal.

The income tax department credit the amount on the bank account validated on their portal.