Income tax essentials for individuals and businesses

Form selection depends on your income type, residential status and whether you have business or capital gains income.

• ITR-1 (Sahaj) — salary, one house property, other sources (limited)
• ITR-2 — capital gains, multiple properties, no business income
• ITR-3 — individuals with business or professional income
• ITR-4 (Sugam) — presumptive income under 44AD/44ADA/44AE

Form 26AS shows TDS, TCS and tax payments. AIS (Annual Information Statement) is wider — it includes interest, dividend, mutual fund, share, property and high-value transactions reported by various sources.

• Reconcile AIS / 26AS before filing — mismatch is a top notice trigger
• Report feedback on incorrect AIS entries before filing
• Cross-check Form 16 (salary) with 26AS

Capital gains are split into short-term and long-term based on the asset and holding period. Rules differ for equity, property, debt funds, gold and unlisted shares.

• Equity STT-paid: STCG (<12 months), LTCG (≥12 months)
• Property: STCG (<24 months), LTCG (≥24 months)
• Indexation, exemptions under 54 / 54F / 54EC may apply

If your estimated tax liability exceeds the prescribed limit, advance tax is payable in instalments. TDS/TCS reduces this liability. Salaried taxpayers usually have TDS handled by the employer.

Common notices include intimation u/s 143(1), defective return u/s 139(9), scrutiny u/s 143(2) and demand notices. Most can be addressed with timely, documented replies.

• Do not ignore notices — respond within the stated timeline
• Keep proofs for deductions, exemptions and source of funds
• Get professional help for scrutiny and reassessment matters