Income tax return filing is something which is generally done by professionals in India. The growing youth in the service sector can tackle any corporate challenge but filing tax returns is something they don’t want to indulge in and pass on to the professionals. Tax planning may appear complicated but once you understand basics of tax planning, it can be rewarding and empowering for an individual. An individual just need to understand basics of tax planning.
Income tax return Basics
An individual must do some homework before filing income tax and should understand few income tax basics which assist an individual. An individual must first of all understand on what components of their income they need to pay tax. Income from basic salary, dearness allowance, special allowances and bonus are all taxable under income tax laws but house rent allowance, conveyance allowance and other reimbursements like medical reimbursements are exempt. But apart from income from your employer, an individual may earn interest on fixed deposits, savings account balance; there may be some dividend income and capital gains as well. An individual must understand that their employer calculates tax and deducts from their salary. But an individual must keep in mind and must have knowledge of investments by which they can save their tax. There are various sections like 80C, 80D under which one can invest and reduce their taxable income. You must understand form 16 which is a certificate of TDS from your salary and with the help of which you can ascertain your taxable income. Once you understand form 16, you can know if you have to pay tax and if you have to pay tax, then which income tax slab you fall under.
How to file income tax
Income tax filing is very easy once you understand basics of income tax. After ascertaining your taxable income and taking deductions into account you can file your income tax return online or via professionals. An individual can fill SARAL forms online and after filling details required to fill, one can submit that form with income tax authorities by providing accurate enclosures.
Income tax return form
Income tax return forms are provided by income tax authorities to file income tax returns. There is a separate income tax return form for individual, company, partnership firm and Hindu undivided family. These forms can be downloaded from income tax authorities’ website or can be taken from any income tax office. The income tax return form is called Sahaj used to provide income along with personal details.
Online income tax filing
Income tax returns can be filled online these days. E-filing of income tax returns is the easiest and convenient way to file income tax. An individual can visit income tax authorities’ website and after registering with PAN account number, an account can be created and Sahaj form can be downloaded. After filling all the details and calculation of tax is done, one can upload filled form and by following these simple steps, e-file can be done.