 "10 key points first time taxpayers should know before filing IT returns")
As the deadline to file Income Tax returns (ITR) approaches, first-time taxpayers must know the basics of the process. File your ITR by July 31 of a financial year to avoid penalties. Here are some key lessons that every beginner should know before filing their ITR:
Know your total taxable income
This represents your entire income from all sources, including salary after accounting for any tax-saving deductions.
Understand your tax regime
India has two tax regimes: Old and new.
The new regime, introduced in 2020, features revised tax slabs and concessional rates. However, it has limitations on claiming certain deductions and exemptions. If you don't choose a regime, the default will be the new tax regime. Understand the pros and cons of each regime to make an informed choice.
Gather all necessary documents
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Before beginning the filing process, collect all relevant financial documents. These typically include:
Form 16 from your employer
Bank statements Investment proofs (for tax-saving investments)
Rent receipts (if claiming HRA)
Loan statements (for home loan interest deduction)
PAN Card
Aadhaar card
Review Form 26AS
Form 26AS provides a summary of income with TDS (Tax Deducted at Source) deductions, which is essential for precise tax filing.
Annual Information Statement (AIS)
Contains details such as interest income, dividends, securities transactions, and foreign remittances, all pre-filled in your ITR form for convenience.
Choosing ITR Forms
Selecting the appropriate ITR form is an important step in filing your taxes accurately.
Claim eligible deductions
Deductions under sections like 80C (up to Rs 1.5 lakh), 80D (health insurance), 80TTA (bank interest) and 80G (donations) can reduce your tax liability. Ensure you claim all the eligible deductions while filing your return.
Don't miss deadline
Timely filing is crucial to avoid penalties and interest charges. The usual deadline for filing ITR is July 31st for the previous financial year. However, it's advisable to check the official Income Tax Department website for any extensions or changes in deadlines.
E-Filing is the way to go
The Income Tax Department encourages e-filing of returns through its portal. This method is not only convenient but also reduces the chances of errors. First-time filers can create an account on the portal and follow the step-by-step process to submit their return.
Verify your return
After submitting your ITR, it's essential to verify it within 120 days. This can be done through various methods, including Aadhaar OTP, net banking, or by sending a signed copy of ITR-V to the Centralised Processing Centre, Bengaluru.