Everyone falling under the tax bracket has to mandatorily file Income Tax Returns in July of the assessment year. It applies to those too whose tax liability got reduced to nil due to tax exemptions and deductions. Only those who earn less than the tax exemption limit of Rs.250,000 are not required to file any tax returns.
The Income Tax Return filing receipt serves as an important document. Also, it is much more detailed than the Form 60.
Form 60 only has information pertaining to your salary account. But ITR receipt has complete information regarding your income from other sources.
With the facility of e-filing now available, the job of filing tax returns has become even more easy, safe, quick, and convenient.
Though it is only compulsory for people whose taxable income exceeds Rs.500,000, anyone can e-file their tax returns.
Before we look into the advantages of e-filing your returns, let us first see what benefits you get from filing your Income Tax Returns.
E-filing of taxes encompasses these benefits as well as having several of their own!
All the banks ask for your last two year’s salary slips, Form 16 or TDS certificate, or ITR receipt when you apply for loans.
It is especially a must when applying for a vehicle loan.
The ITR receipt comes in handy if the loan application has gotten rejected or the approved loan amount is less than the required amount.
To claim tax refunds from the I-T department, you have to file your returns. Otherwise, you will have to consider excess tax paid as a loss.
For example, interest earned on fixed deposits is taxable at 10%.
In case the taxpayer’s taxable income falls below the basic income slab of Rs.250,000, he would still have to file income tax returns, to claim the TDS deducted from FDs as a refund from the I-T department.
To be able to bring either the long-term or the short-term losses forward to be adjusted against capital gains in the future, you have to file tax returns.
A long-term capital loss can be brought forward for eight sequential years immediately following the year in which the capital loss occurred.
Short-term capital loss can be adjusted against long-term or short-term capital gains, unlike the long-term capital loss that can be adjusted only against long-term capital gains.
In case you are planning on travelling abroad, be advised, foreign consulates ask for up to past three years ITRs with your Visa application.
The Middle East and South East Asian countries are not so stringent, but Europe, Canada, and the US are quite strict about this document.
ITR receipts are proof that the person wishing to travel overseas has an income source in India and does not wish to settle abroad and would return back.
Indian and many foreign consulates recommend that you should carry some of your income proofs such as ITR receipts, Form 16, salary slips, etc. for your overseas travel.
Purchasing life insurance policies with an assured sum of Rs.10,000,000 or Rs.5,000,000 is becoming commonplace these days.
But life insurance companies like LIC, demand to see the ITR receipts to assure themselves of your annual income and premium paying capability.
This is just one of the documents required for such a high amount policy.
If you want to apply for government tenders, you will be asked to furnish ITR receipts for the last five years.
This is procedural and is required to check whether you are financially sound to fulfil your payment obligations.
The number of required ITR receipts vary from department to department.
Self-employed individuals like partners of a firm, consultants, businessmen, freelancers, and more, do not get Form 16.
Then, ITR receipts become the most important financial document for them, conditioned to the fact that their annual income is more than Rs.250,000.
ITR receipts are the only financial document that a self-employed person has that would serve as his income as well as tax payment proofs.
Filing tax returns online is known as e-filing them!
Mentioned below are the steps that you need to follow for electronically filing your income tax returns.
Remember to verify your address and other details on the form you are filing online. Ensure that all the pages have your name and credentials.
E-filing the tax returns provides the taxpayer with several advantages.
ITR acknowledgement is prompt, so is the process of claiming refunds. It is much faster than a paper-filed process of tax filing.
The e-filing software has inbuilt validators that ensure that the connectivity is without issues. This ensures that the errors are minimized considerably.
Filling up paper forms can lead to errors. The possibility of the same rises substantially when paper forms are being converted mechanically in electronic format!
Online filing of form can be done anytime and from anywhere. You are not constrained by time or place.
Neither are you restricted to a gadget. You can use your PC, tablet, or even the smartphone to file your returns digitally.
The I-T department’s website is accessible 24 X 7 and so is the e-filing facility.
E-filing returns ensure confidentiality of your data. Unlike a paper form, besides you, no one has access to your financial information.
Your e-information cannot be accessed for misuse either at your CA’s office or by the I-T department.
E-filing programs have a secure database of all your old files and uploaded data.
You can access them anytime you are filling out new forms.
The moment you submit your returns you get an electronic confirmation of receipt of your form by the I-T department.
You receive it through your registered email and as a pop-up on your screen.
The e-filing program is user-friendly. You get detailed instructions and easy to understand the language to make filling the e-form a pleasant experience.
You do not have to be a computer expert to file your tax returns electronically.
The e-filing site gives you the option to link your bank account for direct debit for direct as well as indirect taxes, and deposit of tax refunds.
You can also choose to debit your account immediately or schedule it for a later date.
Completing the filing of tax returns at your convenience electronically ensures that you complete the process on time.
This facilitates you in avoiding late payment and other such penalties.
Original filing of tax returns required reams of printing, photocopying, travelling, posting, and probable duplicitous filling of information.
Digitally filing tax returns removes all these burdensome tasks and saves you money as well.
E-filing might save you the cost of hiring a CA to help you with your tax calculations, filing, and refund claiming processes.
You wouldn’t have to stand in queues anymore, nor look for agents to do your return filing for you.
Also, the e-filing system does all the calculations for you. So you don’t need to get hassled over missed or messed up calculations anymore!
In the End
Filing returns electronically is a time-saving, safe, paperless, accurate, and convenient process.
You can file your returns anytime and from anywhere. So why waste time and money scribbling on forms, and pounding away on the calculator, and file your tax returns electronically!