 "Income tax returns")
Filing income tax for the first time can be a daunting and confusing task. However, with a few handy tips, you can significantly reduce the stress and navigate the process more smoothly. By keeping track of the due date, calculating taxable income accurately, collecting necessary documents, and verifying tax deposits, individuals can ensure a smooth filing experience.
Here are some key suggestions:
1. Organize Your Documents: Keep important documents like Form 16 and investment proofs for eligible deductions handy when filling your income tax returns. Make sure you have your salary slips, Form 26AS, which will be essential for accurately calculating your total income and claiming deductions.
" When your income can be categorized under the head salaries, you will receive a Form 16 from your employer by 15 June every year. It serves as a document proof for your taxable income for that financial year. Form 16 comprises of details like your annual income, taxable and exempted allowances, perquisites, etc," according to Coverfox, an IRDAI authorised insurance broking firm.
Form 16A: For income sources other than your salary, there’s Form 16A where the details for such income is mentioned. This form is issued by the entity or organization that has been the source of your income.
Form 26AS: This form shows the TDS (Tax Deducted at Source) deducted from your income and payments made to you. Form 26AS is accessible on the official e-filing website. With every TDS payment to the tax department from your income, the relevant information gets automatically updated in your Form 26AS.
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2. Understand Income Tax Slabs: It is essential to familiarize yourself with the income tax slabs and ascertain the one that aligns with your income bracket. The finance minister in India announces the Income Tax slabs annually, which currently consist of two distinct regimes. Both the new and old regimes offer taxpayers the opportunity to obtain tax benefits. "The tax slab an individual falls into depends on their income, meaning those with higher earnings are obligated to pay a greater amount of tax. The introduction of the slab system aimed to establish a fair tax structure within the country, and these slabs are subject to alteration with each budget announcement," said Avinash Shekhar, CEO, TaxNodes.
3. Claim Deductions Wisely: Take advantage of deductions available under sections like 80C (for investments including life insurance premium, investment in Public Provident Fund, investment in NSC, repayment of principal component of housing loan, investment in Post Office Time Deposit Scheme, Senior Citizens Saving Scheme, etc.) and 80D (for medical insurance). You can get tax benefits on life insurance premiums of up to Rs 1.5 lakh under Section 80C. Health insurance premiums of up to Rs 75,000 are tax exempted under Section 80D. Donations to specific institutions enable you to avail tax benefits under Section 80G of the Income Tax Act, 1961.Strategically utilize these deductions to optimize your tax savings.
4. Understand your salary components: Familiarize yourself with the different elements of your salary, such as basic salary, allowances, and deductions. This will enable you to
accurately calculate your income and determine your tax liability, said Shekhar.
Also Read: ITR 2022-23: Three key changes to keep in mind while filing your return
Also Read: ITR 2022-23: Three key changes to keep in mind while filing your return
5. Verify TDS details: Double-check the TDS amount deducted by your employer with the information in your Form 26AS. Ensure there are no discrepancies and contact your
employer for rectification if needed.
6. Utilize online filing platforms: Consider using online tax filing platforms or e-filing portals provided by the Income Tax Department. These platforms simplify the process and provide step-by-step guidance, ensuring accuracy and convenience. "If you find the process overwhelming or have complex financial situations, don'tt hesitate to seek help from a tax professional. They can provide expert advice and ensure your return is filed correctly," said Shekhar.
Income-tax Department has established an independent portal for e-filing of return of income. The taxpayers can log on to https://www.incometax.gov.in/iec/foportal for e-filing the return of income.
7. File Your Returns on Time: Remember, the last date for filing income tax returns is 31 July. Filing your returns after this date may incur a penalty, so it is essential to complete the process within the given timeline.
Return of income which has not been furnished on or before the due date specified under section 139(1) is called belated return. As per section 234F, late filing fees of R 5,000 shall be payable if return furnished after due date. However amount of late filing fees to be paid shall be Rs.1,000, if the total income of the person does not exceed Rs 5 lakh.
8. Declare all sources of income: "Include income from all sources, such as salary, investments, rent, or freelance work, while filing your ITR and make sure you select the appropriate ITR form based on your income sources and financial situation," said CA Manish Mishra.
ITR-1: Individuals with annual income of a maximum of Rs 50 lakh from sources like salaries, one house property, interest, etc., have to fill up ITR-1.
ITR-2: This form is for individuals and Hindu Undivided Families (HUFs) who are not involved in a business or profession under any proprietorship.
ITR-3: ITR-3 is especially for individuals and Hindu Undivided Families enjoying a source of income from a business or profession under a proprietorship.
ITR-4: For presumptive income from business or profession having total income up to Rs 50 lakh
9. Keep a Record of Your Filing: "While the Income Tax department maintains records of your tax filings, it is beneficial to keep your own record for future reference. Store a digital or physical copy of your yearly filings for easy access and future needs. By incorporating these valuable tips into your income tax filing process, you can navigate the intricacies with enhanced confidence and ease, ensuring a smoother experience while meeting your tax obligations," said Raghuram Trikutam, Co-Founder, Descrypt.
10. Keep your ID cards ready: You need to mention your basic details like Aadhaar Number, PAN Number, Bank Account Number with IFSC Code, contact number and a valid email ID while filing up your ITR Form every financial year. Not just first-time taxpayers, this is applicable to every taxpayer on every financial year. Keep all these documents handy while filing up your ITR form, so there is no scope for inaccuracies.
10. Made errors during filing: If a person after furnishing the return finds any mistake, omission or any wrong statement, then return has to be revised within prescribed time limit. A return can be revised at any time 3 months before the end of the Assessment Year or before the completion of the assessment; whichever is earlier. If original return has filed in paper format or manually, then technically it cannot be revised by online mode or electronically.
Revised return can be filed online under section 139(5).
