ITR Preparation Services

Q: What is the Annual Information Statement (AIS) and how does it affect ITR preparation?

AIS shows all financial transactions reported to the department — interest, dividend, securities, real estate, foreign remittances. During ITR preparation, each AIS item is reviewed against the taxpayer's records. Discrepancies must be explained via AIS feedback or reflected in the return.

Q: How is HRA exemption calculated?

HRA exemption is the least of: (a) actual HRA received; (b) 50% of basic (metro) or 40% (non-metro); (c) actual rent paid minus 10% of basic salary. Calculated month-by-month. Landlord PAN required if rent exceeds ₹1 lakh per year. Not available in new tax regime.

Q: What is the Section 80C deduction limit and what investments qualify?

₹1.5 lakh limit per year covering LIC, PPF, ELSS, NSC, 5-year FDs, EPF, tuition fees (2 children), home loan principal repayment. Additional ₹50,000 for NPS under Section 80CCD(1B). Only available under the old tax regime.

Q: What is indexation and how does it reduce capital gains tax?

Indexation adjusts the cost of acquisition for inflation using the Cost Inflation Index, reducing the taxable capital gain. Still applicable to debt mutual funds, bonds, gold, and real estate (with option to choose). Removed for equity shares and equity mutual funds from Budget 2024.

Q: What is the process for ITR preparation and how long does it take?

5-step process: document collection, AIS/26AS review, income computation, deduction identification, old vs new regime comparison, tax computation statement for client approval, and final schedule preparation. Simple returns: 2-5 working days. Complex returns: 7-15 working days.

Expert Income Tax Return Computation, Deduction Review, and AIS Reconciliation Before Filing

ITR preparation is the analytical and computational phase of income tax compliance — it involves gathering and verifying all income data, computing total income across all heads, identifying eligible deductions and exemptions, reconciling TDS credits with the Annual Information Statement and Form 26AS, comparing the old and new tax regimes, and preparing the complete set of schedules required for the relevant ITR form. It is the foundation that ensures the filed return is accurate, complete, and optimised.

A properly prepared ITR significantly reduces the risk of scrutiny notices, ensures all refunds are correctly claimed, and provides a defensible record in the event of assessment proceedings. Our ITR preparation service is distinct from but complementary to our ITR filing services — we prepare the computation in full before filing, giving clients visibility and approval of the tax position. We also connect this with our tax health check and income tax e-filing overview for complete year-round tax support.

Our ITR Preparation Services

Income Computation Across All Heads

Computing income from salary, house property, capital gains (short-term and long-term across all asset classes), business and profession, and other sources — with correct rules applied to each head.

AIS & TIS Review

Reviewing the Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) to identify transactions reported to the department — ensuring the ITR is consistent with the information already available to the tax authorities.

Deduction Maximisation

Reviewing all potentially eligible deductions — 80C, 80CCC, 80CCD, 80D, 80E, 80G, 80TTA, 80TTB, 24(b), HRA exemption, LTA, and others — to ensure the minimum legally required tax is paid.

Old vs New Regime Comparison

Computing the tax liability under both the old regime (with deductions) and the new regime (lower rates, no deductions) and recommending the more beneficial option for the taxpayer.

Capital Gains Schedule Preparation

Preparing the detailed capital gains schedule — listing each transaction with acquisition cost, sale consideration, holding period, indexed cost (where applicable), and applicable tax rate — for shares, mutual funds, property, and other assets.

Tax Computation Statement

Preparing a complete, client-approved tax computation statement showing total income, deductions, taxable income, tax liability, advance tax and TDS credits, and net tax payable or refund — before the return is filed.

Documents Required for ITR Preparation

Salaried income: Form 16 from all employers; Form 12BA for perquisites
Investment income: Bank statements for interest; dividend statements; mutual fund transaction statements
Capital gains: Broker contract notes or statements for shares; sale deed and purchase agreement for property
House property: Home loan interest certificate; rental agreements and rental income details
Deductions: Life insurance premium receipts; PPF passbook; health insurance premium receipts; donation receipts
TDS verification: Form 26AS downloaded from income tax portal; AIS reviewed and feedback submitted
Business/profession: Profit and loss account; balance sheet; depreciation schedule; GST returns

Frequently Asked Questions

What is the Annual Information Statement (AIS) and how does it affect ITR preparation?

The AIS is a comprehensive statement maintained by the income tax department showing all financial transactions reported about a taxpayer by banks, brokers, registrars, mutual funds, and other reporting entities. It includes interest income, dividend income, securities transactions, real estate purchases and sales, foreign remittances, and GST turnover. During ITR preparation, each item in the AIS is reviewed against the taxpayer's own records — discrepancies must either be explained through the AIS feedback mechanism or reflected in the return to avoid mismatch notices post-filing.

How is HRA exemption calculated?

HRA exemption under Section 10(13A) is the least of three amounts: (a) actual HRA received; (b) 50% of basic salary (in metro cities — Mumbai, Delhi, Kolkata, Chennai) or 40% (in non-metro cities); and (c) actual rent paid minus 10% of basic salary. The exemption is calculated month-by-month where salary or rent changes during the year. Rent payments exceeding ₹1 lakh per year require the landlord's PAN. HRA exemption is only available under the old tax regime — it is not available in the new regime.

What is the Section 80C deduction limit and what investments qualify?

The Section 80C deduction is limited to ₹1.5 lakh per financial year and covers a wide range of investments and payments — including Life Insurance premiums, PPF contributions, ELSS mutual fund investments, NSC, 5-year tax-saving FDs, EPF contributions, children's tuition fees (up to 2 children), principal repayment on home loan, and NPS contributions under Section 80CCD(1). An additional ₹50,000 deduction is available for NPS contributions under Section 80CCD(1B). Section 80C deductions are only available under the old tax regime.

What is indexation and how does it reduce capital gains tax?

Indexation allows the cost of acquisition of a capital asset to be adjusted for inflation using the Cost Inflation Index (CII) published by the government. The indexed cost is then deducted from the sale consideration to arrive at the long-term capital gain. Since the indexed cost is higher than the original cost (due to inflation adjustment), the resulting capital gain is lower — reducing the tax liability. Note that indexation was removed for long-term capital gains on equity shares and equity mutual funds from Budget 2024, but still applies to debt mutual funds, bonds, gold, and real estate (with the option to choose).

What is the process for ITR preparation and how long does it take?

Our ITR preparation process involves: (1) document collection from the client; (2) review of AIS and Form 26AS; (3) computation of income across all heads; (4) identification of all eligible deductions; (5) old vs new regime comparison; (6) preparation of the tax computation statement for client review and approval; and (7) final preparation of all required ITR schedules. For straightforward individual returns, the process typically takes 2 to 5 working days after all documents are received. Complex returns involving capital gains, foreign income, or business income may take 7 to 15 days.

Know Exactly What You Owe — Before You File

Expert ITR preparation — income computed, deductions maximised, AIS reconciled, and tax optimised.