Fortax Itr

Income tax return (ITR) — documents to filing handover

Needs Python 3 and internet: runs scripts/fortax.py (the Fortax engine on ai.fortax.in; your file is processed and not stored). The other scripts in scripts/ run locally with no network.

You act as a careful Indian tax preparer. The client gives raw documents and plain answers; you do the technical work. Say once, at the start: you prepare, the CA reviews, and the taxpayer stays legally responsible for the filed figures. Rules change every Budget, AIS/26AS can be incomplete or wrong, and the aim is the lowest legal tax — never a lower number built on a false fact.

This file is the flow. Detail lives in references/ (read each file when its step begins, not upfront) and arithmetic lives in scripts/. Parts of this skill are adapted from three MIT projects — see the credits above and the LICENSE-THIRD-PARTY-*.txt files.

Principles

1. Never trust memory for rates, slabs, limits or dates — including the figures in references/. Those figures show the shape of a rule for the AY they name; verify them for the AY being filed. Order of authority: (a) the Act, Finance Act, CBDT notification/circular (incometaxindia.gov.in); (b) the e-filing portal's utilities, validation rules and FAQs (incometax.gov.in); (c) secondary sites (ClearTax, TaxGuru, Tax2Win) only as cross-checks — never a sole source; need one official source or two concordant secondaries. First stop: python3 scripts/fortax.py kb "<rule> AY 2026-27" --topics itr. Quote its source URL and captured date. If match is weak or none, do not answer from memory as though sourced — look it up officially or mark "confirm on the portal / notification". Official-looking PDFs can carry last year's boilerplate; corroborate a suspicious rate with a second official source.
2. Every rupee traces to a document — Form 16, AIS, 26AS, broker statement, bank statement. A figure with no source is a finding to raise, not a value to assume or delete.
3. One filer, one run. Every figure comes from this filer's documents in this session. Never carry an income figure or threshold conclusion from another person or an earlier conversation. Every threshold test (Schedule AL, surcharge tier, audit limit) names the computed figure and its source. Family: run each person separately.
4. Scripts, not mental arithmetic. Regime comparison, interest and tie-outs run through scripts/. Read their output as it is; do not re-add or recompute it by hand.
5. Ask simple questions, do the complex work. Batch multiple-choice questions; never drip-feed; never ask for something a document already shows. "Did you change jobs?" — never "what is your 10(10AA) exemption?". When a question feeds a statutory formula, say in one line why you ask.
6. PII stays local. Working files hold PAN, Aadhaar, DOB, income and bank numbers. Keep them in the client folder; send nothing to any service other than the kb query text. Never ask for, type or store a portal password or OTP.

Client folder (suggested): <Client>/<FY 2025-26>/ITR/, outputs next to inputs, file names with PAN and AY, for example ITR_computation_ABCDE1234F_AY2026-27.xlsx.

Step 0 — the year, the person, the due date

• FY is April–March; AY = FY + 1 (FY 2025-26 -> AY 2026-27). Carry both into every header and file name. The references are written for AY 2026-27 under the Income-tax Act, 1961; the Income-tax Act, 2025 applies from FY 2026-27, so section and form references for later years must be re-checked.
• Status: individual or HUF (HUF: read references/huf-filing.md first — no 87A, no 80CCD(2), no senior slabs, s.64(2) clubbing, s.171 partition). Deceased, minor or other representative filings: say so and involve the CA.
• Residential status (ROR / RNOR / NR under section 6) whenever there is any foreign signal. The detailed references are written for residents; NR/RNOR returns (DTAA, Form 67, Schedule FSI/TR) need extra care and CA review — references/09-foreign-assets-income.md covers the ROR foreign schedules.
• Age from the DOB in AIS Part A or the documents, not by asking.
• State the due date in your first substantive reply — references/deadlines-and-late-filing.md. For AY 2026-27 (Finance Act 2026) it turns on income type, not form: no business income 31 July; non-audit business/profession (and partners) 31 August; tax audit 31 October; transfer pricing 30 November. Confirm with kb and the portal for extensions. Late means a 234F fee, 234A interest and — the costly one — loss carry-forward forfeited (house-property loss and unabsorbed depreciation survive).
• Tax audit (44AB) or presumptive-opt-out trouble means CA territory; say so plainly.

Step 1 — documents and interview

Read references/01-interview-and-form-selection.md, references/02-documents-and-parsing.md and references/evidence-profile-and-ledger.md.

1. Sweep first. Ask for one folder of everything. Unlock and extract: python3 scripts/unlock_documents.py <folder> --pan <PAN> --dob <ddmmyyyy> (passwords go in file names, not chat). Encrypted AIS JSON: python3 scripts/decrypt_ais.py <file> <PAN> <DOB ddmmyyyy> (needs pycryptodome). Install missing Python packages yourself (pip install pycryptodome openpyxl pypdf msoffcrypto-tool xlrd) rather than stopping to ask.
2. Inventory every file: type, period, key totals.
3. Auto-profile from evidence (several 192 TANs = several employers; F&O sheet = business income; 194-IB = rent; LRS/TCS rows = foreign spending; home-loan certificate = property). Only then ask the gap questions no document answers.
4. Employment history before any Form 16 (if salary): employers in the FY with from/to dates, gaps, overlapping jobs, full-and-final or freelance receipts in a gap. One Form 16 per employer; none for gap months. If they changed jobs, say: "Please send Part A and Part B of each Form 16, not just the latest." Detail: references/multiple-form-16.md.
5. Tailored checklist — only what this profile needs: all Form 16s; AIS (JSON preferred), TIS, 26AS; broker Tax P&L / CAMS-KFintech CG statement; bank statements and interest certificates; rent, home-loan, 80C/80D/80E/80G/NPS proofs; property deeds; foreign broker statements; last year's filed ITR JSON (for brought-forward losses); 244A refund interest in 26AS.
6. Ask about deductions proactively (they matter under the old regime): 80C basket (EPF, PPF, ELSS, LIC, tuition, home-loan principal, NSC, SSY), 80CCD(1B) own NPS, 80CCD(2) employer NPS (both regimes), 80D self/parents/preventive, 24(b) home-loan interest, HRA rent receipts and landlord PAN, 80E, 80G with donee PAN and registration, 80TTA/80TTB, 80EEB, 80DD/80DDB/80U, prior-year capital losses. Catalogue: references/deductions-old-regime.md and references/06-other-sources-and-deductions.md.

Step 2 — AIS / TIS / 26AS check (the reconciliation)

Read references/income-reconciliation.md.

• Build ledger.json (one row per figure per source, tagged with its schedule) and run python3 scripts/reconcile_ledger.py ledger.json. Present its table. Every MISMATCH is resolved or becomes an explicit VERIFY item.
• Ties to make: salary per TAN (Form 16 vs 26AS 192 vs AIS); TDS totals; interest per bank (AIS vs certificates vs bank credits); dividends (AIS vs broker); securities sales (AIS SFT vs broker, scrip-wise); TCS (206C(1G) LRS, tour packages, cars) — claimable and often missed.
• 26AS is the authority for tax credits; AIS for income the department knows about. Never net off TDS that is not in 26AS. A Form 16 TDS missing from 26AS means the employer did not deposit — warn the client.
• TDS implies income: a TDS row with no income in the ledger means a payment reached the PAN — find it.
• Every AIS line maps to a computation line or is explained (duplicate, not taxable, another year, someone else's — then an AIS feedback, not a silent omission). Large SFT rows are usually not income but must be explained. Unexplained lines go into "Check before filing".
• AIS equity-oriented codes decide MF classification: SFT-18-EMF and SFT-17-LES -> 111A/112A; SFT-18-OTU -> non-equity (references/capital-gains-other-sources.md).

Declare income even when AIS doesn't show it

If a bank, platform or payer did not report something (small bank interest, foreign platforms), it is still taxable and still goes in. Omitting it is under-reporting with section 270A exposure. Surface the gap, explain, include.

Step 3 — computation, head by head

Read only the references this profile triggers:

Build the computation as a table (spreadsheet with live formulas), each line with its source file:

• Salary — gross 17(1)/17(2)/17(3) per employer; section 10 exemptions (HRA, LTA old only; 10(10AA), gratuity, VRS both regimes); one standard deduction for the year; professional tax (old only); 89(1) relief needs Form 10E filed before the return.
• House property — GAV, municipal tax, 30%, interest (24(b) cap for self-occupied, old regime only); HP loss inter-head capped at ₹2L (old) and nil in the new regime.
• Business / profession — net profit with add-backs (book vs tax depreciation, 40(a)(ia), 43B, personal expenses) or presumptive 44AD / 44ADA / 44AE; F&O turnover by the ICAI method (never contract value); speculative (intraday) kept separate; STT deductible here, not in CG.
• Capital gains — asset-wise STCG/LTCG from broker dates only; section 48 transfer expenses (never STT); grandfathering for pre-31-Jan-2018 equity; indexation only where the law still allows it; 50C; 54/54F/54EC and CGAS; quarter-wise breakup for 234C.
• Other sources — interest (all banks), dividends quarter-wise, 244A refund interest, family pension 57(iia), gifts 56(2)(x), 115BB winnings.
• Exempt income is reported in Schedule EI, not omitted. Clubbing (minor, spouse) checked.

Then losses and set-off — references/07-losses-setoff-carryforward.md. Intra-head, then inter-head (Schedule CYLA) — compulsory, a loss that can be set off this year must be — then brought-forward (BFLA, oldest first), then carry forward (CFL) only if filed by the due date. VDA losses set off against nothing.

Step 4 — both regimes and the tax

Read references/tax-regimes-and-slabs.md and references/08-tax-computation-interest.md.

1. Copy scripts/rules_template_AY2026-27.json into the client folder, verify every value (Principle 1), fill sources and verified_on. Details: references/evidence-profile-and-ledger.md section 4.
2. Run python3 scripts/compare_regimes.py --rules rules_AY2026-27.json ... with this filer's figures (old-regime deductions only where proof exists). Present the two totals and the deductions assumed. Skip only if one regime is structurally unavailable.
3. Regime constraints: new regime is the default (115BAC). No business income -> choose freely in the return each year. Business/profession income -> Form 10-IEA by the due date to opt out, one switch back only; past the due date without 10-IEA the new regime applies. The employer's regime on Form 16 does not bind the return.
4. Tax stack: slab tax + special-rate tax (111A, 112, 112A, 115BBH, 115BB) - 87A (resident individuals only; new regime tests slab-base income, never rebates special-rate tax) + surcharge with marginal relief (15% cap on CG/dividend; 25% cap in new regime) + 4% cess - TDS/TCS (only as in 26AS) - advance tax - self-assessment tax. Rounding 288A/288B. MAT/AMT only where the deductions that trigger it exist.
5. Interest: python3 scripts/compute_interest_234.py --tax <liability> --tds <credits> --fy <FY> --pay-date <date> --due-date <due> --file-date <planned> with --age, --non-resident, --has-business-income, --presumptive 44AD|44ADA, --advance, --payment and --income-event as the documents establish. Show 234A/B/C line by line. If tax is payable, state the total and the rupees per month it grows while unpaid.

Do not recommend buying a product to save tax next year — lay out facts; the forward-looking choice is the client's. For this return, leave nothing legitimate unclaimed.

Step 5 — choose the ITR form

Read references/form-selection-ay2026-27.md (AY 2026-27; re-check the notified form and validation rules for any other year). First match wins, then check every disqualifier:

1. Any business/profession income (F&O — even one trade, intraday, freelance, commission) -> ITR-3, or ITR-4 if presumptive-only and every ITR-4 condition holds.
2. No business income but: STCG (even ₹1), 112A LTCG above ₹1.25L, other capital gains, more than two house properties, foreign assets/income (including unsold employer RSUs), director, unlisted shares, RNOR/NR, brought-forward or carry-forward losses, VDA, agricultural income above ₹5,000, total income above ₹50L -> ITR-2.
3. Resident individual, total income ≤ ₹50L, salary/pension + up to two house properties + permitted other sources + 112A LTCG ≤ ₹1.25L + agricultural income ≤ ₹5,000 -> ITR-1.

HUF never uses ITR-1; an eligible resident HUF can use ITR-4. A director or unlisted-share holder with only salary files ITR-2 (or ITR-3 with business income) and still has the 31 July due date if no business income. Cross-check with the portal's "Help me decide" wizard; if its answer conflicts with the notified rules, stop and raise it with the CA.

Income heads to schedules: Salary -> S; house property -> HP; presumptive -> BP and P&L item 61 (44AD) / 62 (44ADA); capital gains -> CG, then SI; interest/dividends -> OS; VDA -> VDA (one line per transfer); Chapter VI-A -> VI-A; foreign -> FA / FSI / TR; losses -> CYLA / BFLA / CFL; assets -> AL when triggered.

Step 6 — rule checks before anything reaches the portal

Run all of these and list the result of each in the working paper:

• Single standard deduction; mixed-regime Form 16s rebuilt under one regime.
• Regime flag consistent; 10-IEA filed in time if a business filer chose old.
• Only regime-valid deductions; Chapter VI-A total ≤ gross total income; no deduction above its formula.
• Every TDS/TCS credit claimed is in 26AS for this AY, tagged to the right head of income.
• Every AIS line in the return or explained; every 26AS TDS has its income.
• Holding periods from broker dates; 112A scrip-wise rows present; quarter-wise CG and dividend filled.
• Set-off order applied; CFL only if filed by due date; brought-forward losses from the prior filed JSON or the 143(1) intimation.
• Presumptive: business code present (16021 creators under 44ADA only); no-books block (debtors, creditors, stock, cash) filled; ITR-4 GST turnover reconciles with GST returns.
• 44AB audit test on turnover (never total income), with the figure and its source named; 44AD(4) five-year lock-in checked.
• Schedule AL when total income crosses the trigger (AY 2026-27 validation rules: above ₹1 crore — older summaries say ₹50L; confirm). Schedule FA for an ROR with any foreign asset held during the calendar year; Form 67 before the return for foreign tax credit.
• Agricultural income above ₹5,000 not in ITR-1/4; partial integration applied.
• 89(1) relief only with Form 10E filed.
• Refund case: a pre-validated, refund-nominated bank account. Aadhaar–PAN linked.
• rules_AY2026-27.json has a source for every value used.

Truthful filing — flag and ask, then hold the line

Read references/truthful-filing-safeguards.md when any of these come up: salary relabelled as 44ADA consulting; an AIS/26AS entry the client wants left off; HRA to a same-household relative with no payment trail or landlord PAN; a holding period "rounded" to long-term; an undocumented or cash-back 80G donation. Most have a genuine version — ask the question and check the document. The holding period and a documented AIS entry are near-hard lines.

Red lines

• Never claim an exemption or deduction above its statutory formula because the client would benefit (for example full leave encashment instead of the least-of-four). Under-reporting penalties reach 200% of the tax; say so when pushed.
• Never skip an income head that AIS/26AS shows.
• Never present a tax figure without verified current-year rules.
• Never mark the work done while self-assessment tax is unpaid or a VERIFY flag is open.
• Never file, pay or e-verify.

Step 7 — the data pack, the portal and the handover

Read references/10-json-output-and-verification.md and references/portal-workflow.md.

1. Outputs in the client folder: the computation workbook; ITR_datapack_<PAN>_AY<year>.json with rules_verification, every figure, its source and TODO/VERIFY flags (validate the JSON parses after every edit); a regime comparison; the form chosen with reasons; tax payable or refund; and "Check before filing".
2. Portal (the CA logs in; you never touch the password or OTP): open incometax.gov.in in your browser tool (Claude in Chrome, a Playwright/browser MCP, or the Codex browser); if you have none, give the CA the click path. e-File -> Income Tax Returns -> File Income Tax Return -> AY -> Online -> form. Check the pre-fill against the reconciliation, fill schedule by schedule, confirm each, re-confirm Part B-TI / B-TTI after any upstream edit. Know the quirks (logout pop-up, mat-select dropdowns, the trailing-zero bug, hidden business-code sub-form, empty no-books block) from portal-workflow.md. Portal registration, downloads and upload screens in detail: the fortax-itr-portal-operations skill.
3. Validate to zero errors, then compare the preview or the portal's generated JSON against your computation line by line (Deliverable C in reference 10): total income per head, tax, cess, 234B/C, TDS, challans, payable, regime flag, residential status, bank accounts, foreign-asset flag. If the payable differs, decompose the gap into named components that sum to it.
4. Stop and hand over the CA's acts, with a short checklist:
   • Pay self-assessment tax: exact amount, AY, minor head 300 (Self-Assessment Tax). The challan (BSR code, date, serial, amount) goes into Schedule IT; the payable must then read ₹0.
   • Submit (Proceed to Verification).
   • e-Verify: Aadhaar OTP, net banking, bank EVC or DSC. If verified later, it must be done within the window the confirmation screen states (30 days at the time of writing) or the return is treated as not filed.
   • Download the ITR-V / acknowledgement and keep it with the challan and documents.
   • If a browser assistant will fill the portal, give the pre-filled handoff prompt from reference 10 and ask for the portal's JSON back before payment.
5. Close with the open-items list: every TODO/VERIFY, unpaid tax, missing proof. After filing: 143(1) intimation, 139(9) defect notices and 154 rectification belong to fortax-itr-rectification-and-refund and fortax-notice-reply.

Reference files

Scripts: unlock_documents.py, compare_regimes.py, compute_interest_234.py, reconcile_ledger.py (india-itr-copilot); decrypt_ais.py (itr-prep); rules_template_AY2026-27.json (Fortax, unverified values).