If you have a complex income tax return (ITR), it is a no-brainer to hire a competent Chartered Accountant (CA) to help with the filing. But that does not guarantee that your ITR will be error-free.

In the last few years, I have consulted some well-recommended CAs to help with my ITRs. Unfortunately, each of them made numerous errors, of omission as well as commission. One time, I got a tax notice because the details required for claiming a tax credit under DTAA were incorrectly filled. It cost me more to fix the issue than what I had paid the CA, not to mention the stress I went through. I have also noticed several mistakes, which, if not caught, would have resulted in me overpaying thousands of rupees in taxes.

But aren’t CAs liable for any mistakes with the ITR? The truth is, 99% of the CAs do not officially sign off on the returns they file. They evade any professional liability by using their clients’ login credentials, even though IT dept. has a well-defined process for CAs to file ITRs on behalf of their clients.

As a result, I now double-check, heck, triple-check everything that goes in my ITR. It requires a couple of revisions of the draft ITRs, and the entire process takes about a week, but by the end, I gain confidence that a) all the details are correct, and b) I am not paying more taxes than I am obligated to pay.

Below is a detailed checklist that I personally use. You will need the Excel sheet with CA’s calculations, so make sure to request for it if they do not send it on their own.

80D

  • Health insurance premiums amounts for me and my spouse are accurate, and are declared separately from those of my parents, who are senior citizens
  • Multi-year health insurance policies are claimed proportinately each year, and not the entire amount in a single year
  • Outgo towards preventive health check-ups are included

80E

  • The amount of interest paid on the education loan matches the certificate from the bank

80G

  • PAN/TIN of the charities that I have donated to match the certificate from the charity. Since the PAN/TIN are text and not numbers which affect the tax amount, incorrect details can easily slip through
  • All donations are included, and the amount donated to each charity is exact
  • Donations are correctly mapped under the 50% exemption and 100% exemption categories

Capital Gains: Domestic

While this is a relatively easy section as capital gains statements from CAMS and KFIN are authoritative, it’s still important to verify the following:

  • Amounts of the capital gains and losses are correct
  • Short-term and long-term capital gains have been accurately calculated
  • Carry-over losses from previous years have been used to offset this year’s capital gains, and the remaining amount has been mentioned as being carried over

Capital Gains: International

For international capital gains, I ensure the following:

  • There are entries for all the transactions of share credits and sales, and the dates are accurate
  • Cost of acquisition and the sale price match the statements from the broker
  • Correct value of USD/INR rate is used for each transaction date
  • Transaction costs (brokerage commissions and wire transfer charges) have been considered and substracted from the capital gains

Note: Repatriating money from share sales to India always includes direct and indirect transfer fees (because of intermediary banks). Since these typically sum up to 15 USD or more per instance of transfer, claiming the charges can save thousands in taxes.

DTAA for foreign dividends

  • My PAN is quoted as the Foreign TIN. In the case I received the IT notice, the CA had specified my passport number as TIN, resulting in a mismatch with the IT department’s record
  • The country code and the article under which I am claiming the tax credit are correctly mentioned
  • Ensure the Form 67 is filled and uploaded on the portal, with all the relevant proofs of dividend credits and the tax withholding certificates, typically Form 1042S
  • The total dividend amount being claimed as gross, and the amount of tax withheld matches

Declaration of foreign assets

  • “Schedule - Foreign Assets (FA)” is properly filled out since non-disclosure can be treated under the black-money act
  • There are no typos in the names of stocks and ETFs
  • The date of purchase, and opening and closing balances match with the statements from the broker.
  • Peak balance is correctly mentioned. I use the stock’s high price during the year to approximate the peak balance

Exempt Income

  • Interest income on PPF investments is declared correctly