Income tax and the taxation procedure, in general, is a necessary evil, one that all citizens must observe with utmost sincerity. With the taxation process comes the act of filing your Income Tax Return (ITR), which can be quite tricky and confusing to those who are new to it (let’s be real, those who have done it for longer get baffled while filing their ITR too!).
But like much everything else in life, all good and important things are initially hard to understand. Here are a list of some tips and tricks, do’s and don’ts of how to file your Income Tax Return right, the first time you do it!
What is ITR?
We all are aware that it is essential and mandatory by law to submit your Income Tax Returns by roughly the middle of the year, whether you are a company or a salaried employee, or even a businessman. But what it is ITR, really?
Income Tax Return (or ITR, as it is more commonly referred to as) is simply a document that informs the Revenue Department (IRS) about the income as well as the investment of a person, or an organization over the course of one year. The person or organization in question may be a salaried employee, a businessman, a corporate establishment, or a self-employed person. The sum total of money earned and money spent by a person and institution helps the Tax Officer determine that person and/or organization’s tax liability.
The important thing to note here is that an individual is liable to pay tax only if he earns Rs. Five lakhs per annum or more, and hence must file the Income Tax Return.
Types of Income Tax Return Forms
Before going ahead and filing your own ITR, it is essential to know which ITR form is the one you are supposed to fill out and submit. The various types of Income Tax Return forms are given below, along with the information regarding what form is applicable to whom:
Name of Form
Assessee must not have income from any other source except salary/pension and/or interest.
Assessee may have other sources of income, but which do not come under professional and/or business income.
Assessee is a partner in a business venture
Assessee has a profession/business as a source of income
Assessee may be a company/firm, local authority, etc.
Assesse is a company
Assesse is a trust
Used for filing Fringe Benefit Tax Return
What Should You Put In Your ITR?
The Government really just wants you to be honest with it. Clearly state all of your incomes and investments over the course of the last financial year, and you are done. Filing an Income Tax Return can be easily accomplished in a day, if not less.
But to do that, you need to know what type of earning is considered as an ‘income’, as far as filing the ITR is concerned:
- Salaries: the money that an individual gets paid by their employer is considered as a salary, and yes, it is taxable. Your employer could be a single person, a firm, or even the Government itself—your salary is and will be counted as taxable income.
- House Property: In case you own property that you have leased out to somebody else, then the money you receive as rent from your tenant also counts as taxable income.
- Business Profits: any or all money made by a person or an organization via their business is considered to be taxable income.
- Others: any or all money gained by an individual and/or institution through lotteries, donations, interests and/or even gifts is counted as taxable income, and must be clearly stated in their respective Income Tax Return form.
Basics of the ITR Form
There are a few key points that must be kept in mind before and while filing an Income Tax Return, which include but are not limited to:
- All details must match the Permanent Account Number (PAN) database that is maintained by the Government. Ensure the spelling of your name matches the one that is displayed on your PAN Card to avoid any discrepancies.
- Pay extra attention to filling out your date of birth in the ITR form. In case of senior citizens, more tax is charged, so make sure you do not mess this one up.
- Put in your complete address in the form, complete with the postal code. This is essential to avoid any delays in a refund due to incorrect/incomplete addresses.
- Provide a correct and functional email address, because that is how the Central Pay Commission (CPC) communicates with you. Also, provide your own email ID, and not your chartered accountant’s ID.
- Provide a correct mobile number for all message-based communication, and prefix the country code, that is +91 with it.
- Residential status must be correctly filled; that is NRI are eligible for certain benefits, in case you happen to be one.
Important Details to Pay Attention to
There are certain common mistakes that most people commit while filing their ITRs with some of the most important details that need to be entered in the Income Tax Return Form.
First, one must ensure that the salary amount they are entering in the form is correct right down to its last digit. No rounding off is permitted while filing an ITR. Also, one must ensure that the salary amount specified by them in one place must match the salary amount entered by them in all other places in the form. Another thing to keep in mind is so always entered the Net Salary, and never the gross salary amount. Entering the gross salary amount may result in higher tax deductions.
In the case of any loss incurred due to house property, the cause and extent of loss must be clearly stated in the appropriate section in the ITR form. Also, if multiple people own the same property (co-owners), then each owner must specify their income from the property according to their share in the property.
The Process of Filing ITR
To make the income tax return filing process easier and more hassle-free, the Government permits all taxpayers to file their returns online.
At Policy Bazaar, we enunciate the whole process step by step for your convenience, which can be summed up as below:
- Log on to the ITR filing website: www.incometaxindiaefiling[dot]gov.in. Register/Login using your PAN details and password.
- Download the ITR form for the assessment year, and fill in the correct details.
- Upload the completely filled ITR form back onto the website.
- Once the ITR is verified, it must be signed by the assessee and mailed to the Central Pay Commission (CPC) facility in Bangalore by the regular snail mail.
- In any case, all Income Tax Returns must be filed before July 31 of every year without fail.
Policy Bazaar and ITR
We may not be able to fill out your Income Tax Return for you, but we sure do our absolute best to make the whole process as easy and quick as we possibly can. Read up on all our articles related to Income Tax Return filing, filled with page after page of knowledge secured from the very best experts in the field.
With step by step tutorials (complete with pictures!) there is no way that you are ever filing an ITR in any way less than a professional would. Also, to prepare you for the future in any way we can, Policy Bazaar offers you tools like refund calculator, so you know your estimated refund amount well in advance.
Reach Out To Us
When the pressure builds as the big day of July 31 approaches, we know you are bound to have a lot of questions and be confused about filing your ITR. But, there is nothing for you to worry about with Policy Bazaar backing you, every step of the way. Be it a general question that popped in your head, or a more specific doubt that is unique to you, we at Policy Bazaar have a team that is fully equipped to help you with whatever it is that troubles you.
Contact our customer service officials at any time on our toll-free numbers, or simply drop a line through WhatsApp messenger at our phone number dedicated solely for that purpose.
Should you have a more general query, browsing through our section of Frequently Asked Questions (FAQs) is also likely to get you all the answers you may be looking for. If even that does not get you all the answers you need, you may email us on your email ID, and we shall get back to you in next to no time.
ITR in a Nutshell
Hence, in a nutshell, ITR filing is quite simple, provided you are honest about your particulars and know what to fill against what section. Non-filing or late filing or ITRs not only puts you in a bad spot but also attracts penalty, fine and a general bad rap.
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