The July 31 deadline to file your Income Tax Return (ITR) is fast approaching. The process is not just about reporting your sources of income and paying the due tax but also giving complete and correct details in your tax return. One common mistake that many commit is not reporting all active bank accounts.
The Income Tax Department requires taxpayers to declare all active accounts, including savings, current and overdraft accounts. Leaving these details can create problems later.
Knowing why it's necessary can help you file your ITR smoothly and avoid unnecessary trouble.
The authorities require taxpayers to share details of all active bank accounts in India during the financial year while filing their ITR. Dormant or inactive accounts do not need to be reported.
Taxpayers must provide important details, such as the “IFS code, bank name, account number and account type.” They also need to choose at least one valid bank account where the income tax refund can be sent, if they are eligible.
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The department further mentions that “non resident individuals who do not have a bank account in India may optionally provide the details of a foreign bank account (such as SWIFT code, IBAN, and bank name) for refund purposes. Further, residents must answer whether they held any foreign asset, had signing authority in a foreign account, or earned income from sources outside India during the year. If the answer is ‘Yes,' Schedule FA (Foreign Assets) must also be filed with the return.”
No matter which Income ITR form you are filing, you must provide your bank account details. This rule applies to taxpayers using ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 and ITR 7, although the information required may differ from one form to another.
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If you are filing ITR 1, you also need to enter your bank account details. In this form, the information has to be filled in the Part E - Other Information section.
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