Tag: TDS reconciliation

1) What is ITR-2 and who should file it

ITR-2 is meant for individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession but have any of the following:

• Capital gains (short-term or long-term)
• Income from more than one house property
• Foreign income or assets
• Being a director in a company
• Investments in unlisted equity shares

If your only income is salary/pension, one house property, and total income ≤ ₹50 lakh, you may be eligible for ITR-1 instead — otherwise, use ITR-2.

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2) Documents to collect before filing

• PAN & Aadhaar (linked)
• Bank account details (IFSC, account number)
• Form 16 from your employer
• Form 16A / TDS certificates (from banks, others)
• Form 26AS (TDS/TCS summary)
• AIS (Annual Information Statement) and TIS
• Bank statements (for savings interest)
• Home loan interest certificate (if applicable)
• Broker contract notes / capital gains statement
• Investment proofs for deductions (80C, 80D, etc.)

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3) Important deadlines

• For FY 2025-26 (AY 2026-27), the last date for filing (non-audit) is 15 September 2026.
• Belated return can be filed till 31 December 2026 but with a penalty.

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4) How income is reported in ITR-2

• Salary → Schedule S
• House Property → Schedule HP
• Capital Gains → Schedule CG
• Other Income → “Income from Other Sources” section
• Deductions → Schedule VI-A
• Taxes Paid / TDS → Tax Paid and Verification section

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5) Step-by-step filing process (online)

1. Login to Income Tax e-filing portal
2. Go to: e-File → Income Tax Returns → File Income Tax Return
3. Select Assessment Year 2026-27 and choose ITR-2
4. Select Prepare and Submit Online (prefilled data) or Upload JSON (offline utility)
5. Review pre-filled data (salary, TDS, bank interest, etc.)
6. Fill missing details:
   • Salary from Form 16
   • House property income/loss
   • Capital gains with purchase/sale dates and cost
   • Other income (bank interest, etc.)
   • Deductions under Chapter VI-A
7. Verify TDS and taxes paid with Form 26AS/AIS
8. Validate the form
9. Submit and e-verify instantly (Aadhaar OTP, Netbanking, DSC, etc.)

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6) How to use Form 26AS & AIS

Form 26AS shows all tax credits in your PAN — TDS from employer/bank, TCS, advance tax, and self-assessment tax.
AIS shows a wider range of financial transactions — stock trades, interest income, property purchases, mutual fund investments, etc.

Steps to reconcile:

1. Download Form 26AS from the e-filing portal (redirects to TRACES)
2. Download AIS/TIS from the portal
3. Cross-check:
   • Salary TDS in Form 16 = Salary TDS in 26AS
   • Bank interest TDS = TDS in 26AS
   • Capital gains transactions in AIS match broker reports
4. If mismatch — contact deductor to revise TDS statement or give feedback in AIS

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7) Example calculation — FY 2025-26 (Old Regime)

Rahul has:

• Salary: ₹12,00,000 (TDS ₹90,000)
• Let-out property: rent ₹2,40,000, municipal tax ₹24,000, loan interest ₹1,20,000
• Bank interest: ₹30,000 (TDS ₹3,000)
• LTCG (listed shares after 23 Jul 2024): ₹1,50,000
• Deduction 80C: ₹1,50,000

House property income:
Gross rent 2,40,000 − Municipal tax 24,000 = 2,16,000
Less 30% standard deduction: 64,800 → 1,51,200
Less interest: 1,20,000 → 31,200 taxable

Total income before CG:
Salary after standard deduction: 12,00,000 − 50,000 = 11,50,000

• House property: 31,200
• Bank interest: 30,000
  = 12,11,200
  Less 80C: 1,50,000 → 10,61,200

Capital gains:
LTCG 1,50,000 − Exemption 1,25,000 = 25,000 taxable @ 12.5% = ₹3,125

Tax:
Other income 10,61,200 under old slabs = ₹1,30,860
Capital gains tax = ₹3,125
Total = ₹1,33,985
Cess @ 4% = ₹5,359 → ₹1,39,344
Less TDS ₹93,000 → Pay ₹46,344

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8) Income-wise tax comparison (Old vs New Regime) — FY 2025-26

Assumptions:

• Salaried individual, resident, age < 60
• No capital gains, only standard deduction (₹50,000) in both regimes
• No other deductions in New Regime except standard deduction
• Old Regime includes 80C = ₹1.5 lakh deduction

Total Income (₹)	Old Regime Tax (₹)	New Regime Tax (₹)
5,00,000	0 (Rebate u/s 87A)	0 (Rebate u/s 87A)
10,00,000	1,02,960	75,400
15,00,000	2,58,960	1,56,000
20,00,000	4,41,600	2,88,400

Incomes above ₹7 lakh in New Regime do not get full rebate — tax savings depend on deductions you can claim in Old Regime.

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9) Common mistakes to avoid

• Relying fully on pre-filled data without verifying
• Ignoring AIS entries — they may contain transactions you forgot to report
• Not splitting capital gains before/after 23 July 2024 for correct tax rate
• Missing e-verification — your return will be invalid without it
• Filing in the wrong form (ITR-1 instead of ITR-2)

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Disclaimer

This guide is for educational purposes only and is based on current tax rules applicable for FY 2025-26 (AY 2026-27). Tax laws can change, and individual circumstances vary. Always verify figures with your own documents and consult a qualified tax professional before filing.

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