1. Essential Documents Checklist
Preparing for your annual return filing begins with gathering core financial trails:
- Form 16 / 16A certificates issued by employers and deductors.
- Complete bank statements for all savings, current, and overdraft accounts held during the financial year.
- Capital gains statements from your stockbroker (Zerodha, Groww, etc.) and mutual fund RTAs.
- Interest certificates from banks for Fixed Deposits and savings accounts.
2. Why the Annual Information Statement (AIS) Matters
Today, the Income Tax Department tracks virtually every financial transaction through the AIS and Taxpayer Information Summary (TIS). Stock purchases, high-value credit card payments, dividend credits, mutual fund sales, and property purchases are automatically logged.
Before submitting any return, your draft income figures must be reconciled against the AIS to ensure zero omissions.
3. Old vs New Tax Regime Decision
Under Section 115BAC, the New Tax Regime is the default regime in India, offering lower progressive tax slab rates but removing most deductions (80C, 80D, HRA, home loan interest on self-occupied property).
If you have substantial eligible deductions exceeding ₹3.75 - ₹4 Lakhs, the Old Regime may still yield lower tax. A mathematical comparison should always be computed prior to filing.
4. Section 44AD / 44ADA for Small Businesses
For small proprietary traders and professionals, the presumptive taxation scheme provides major relief:
- Section 44AD: Allows eligible businesses with turnover up to ₹2 Crores (₹3 Crores with >=95% digital receipts) to declare 6% (digital) or 8% (cash) of turnover as taxable profit without audit.
- Section 44ADA: Allows professionals (IT, consultants, doctors, lawyers) with gross receipts up to ₹50 Lakhs (₹75 Lakhs with digital receipts) to declare 50% of receipts as profit.