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agent's guide: filing income tax returns (itr) for clients

Master the art of filing Income Tax Returns (ITR) for your clients in India. This guide covers everything from choosing the right ITR form to verifying the return, helping you become a trusted tax agent.

Agent's Guide: Filing Income Tax Returns (ITR) for Clients

Introduction

Filing Income Tax Returns (ITR) is a critical annual task, and many individuals seek expert help to ensure it's done correctly. As an agent, offering ITR filing services can be a lucrative and recurring business. This guide will provide you with the essential knowledge to file ITR for your clients accurately and efficiently.

1. Gathering Essential Information

The first step is collecting all necessary financial documents and information from your client. Create a checklist to ensure you don't miss anything:

  • PAN and Aadhaar Card: The foundation of any tax filing.
  • Bank Account Details: All active bank accounts.
  • Form 16: If the client is a salaried employee, this form from their employer is crucial.
  • Investment Details: Information on investments for deductions under sections 80C, 80D, 80G, etc. (e.g., LIC, PPF, health insurance premiums, donations).
  • Form 26AS and AIS/TIS: Download these from the income tax portal. They provide a summary of taxes deducted and financial transactions, which must be reconciled with the income reported.
  • Other Income: Details of any income from other sources like rent, capital gains from stocks or property, or interest from savings accounts.

2. Choosing the Correct ITR Form

Selecting the right ITR form is vital. Here’s a simplified breakdown:

  • ITR-1 (Sahaj): For resident individuals with a total income up to ₹50 lakh from salary, one house property, and other sources (interest, etc.).
  • ITR-2: For individuals and HUFs not having income from profits and gains of business or profession.
  • ITR-3: For individuals and HUFs having income from profits and gains of business or profession.
  • ITR-4 (Sugam): For resident individuals, HUFs, and Firms (other than LLP) with total income up to ₹50 lakh and having income from business and profession computed under sections 44AD, 44ADA or 44AE.

Pro-Tip: When in doubt, use the 'Help me decide which ITR Form to file' utility on the e-filing portal.

3. The Filing Process on the e-Filing Portal

  1. Login: Log in to the Income Tax e-Filing portal using the client's PAN.
  2. Select Filing Mode: Choose 'Online' for a guided, user-friendly process.
  3. Pre-filled Data: The portal will pre-fill a lot of information from the client's Form 16, Form 26AS, and AIS. Your job is to verify this data and add any missing information.
  4. Claim Deductions: Accurately fill in all the deductions your client is eligible for. This is where you add the most value by maximizing their tax savings.
  5. Calculate Tax Liability: The portal automatically calculates the tax liability or refund. If tax is due, advise the client to pay it via the e-Pay Tax service before filing.
  6. Submit and Verify: After submission, the final and most crucial step is e-verification.

4. E-Verification: The Final Step

A return is not considered filed until it is verified. The easiest way is e-verification through Aadhaar OTP. Other methods include using a pre-validated bank account or demat account. Ensure this is done immediately after submission.

By mastering this process, you become an invaluable resource for your clients, helping them stay compliant and save money. This builds a strong reputation and encourages repeat business year after year.

Frequently Asked Questions (FAQ)