The last date for filing income tax returns for the financial year 2022-23 (assessment year 2023-24) is July 31. For many filing income tax returns can be a daunting task, especially if you are doing it for the first time. However, in recent years, the process has become much easier. With all the necessary documents in place, it can be completed in as little as 30 minutes. It is recommended to file tax returns as early as possible to avoid potential last-minute mistakes. Additionally, filing returns after the deadline may result in penalties.
For salaried individuals filing income tax returns for the first time, here are some crucial points to keep in mind:
Gather all necessary documents
Before starting the filing process, gather all the relevant documents such as Form 16 (provided by your employer), bank statements, investment proofs, and any other supporting documents related to your income and expenses.
Here are some of the important documents to keep in mind:
Salary Slips: Gather all your salary slips for the financial year. These slips provide information about your earnings, deductions, and allowances.
Form 26AS: Form 26AS is a consolidated statement that provides important information for calculating your total income and claiming deductions. It includes details of tax deducted at source (TDS) from your income and payments made to you. You can download Form 26AS from the official e-filing website, and it automatically updates with every TDS payment to the tax authorities from your income.
Form 16: Your employer provides Form 16 by June 15 every year. It is a key document that serves as proof of your taxable income for that financial year. Form 16 contains details about your annual income, taxable and exempted allowances, deductions claimed, and more.
Investment Details: If you have made investments in tax-saving instruments such as Provident Funds, National Savings Certificates, or insurance policies, make sure to gather the relevant details. These investments can help you claim deductions under various sections of the Income Tax Act.
Annual Information Statement (AIS): The Annual Information Statement (AIS) contains important information such as interest, dividend, securities transactions, mutual fund transactions, and foreign remittances. When taxpayers choose the 'prefill' option, the relevant details from the AIS are automatically filled in the income tax return form.
Also Read: ITR: Check The Various Ways Of Filling Income Tax Return In India
Taxable Income
To determine your taxable income, it is important to deduct your tax-saving deductions from your gross income, which includes earnings from salary and other sources.
One way to reduce your taxable income is by taking advantage of deductions available under various sections of the Income Tax Act. For instance, Section 80C allows deductions for investments such as life insurance premiums, contributions to the Public Provident Fund (PPF), National Savings Certificates (NSC), Post Office Time Deposit Scheme, and repayment of the principal component of a housing loan.
Under Section 80D, you can claim tax benefits on medical insurance premiums. Life insurance premiums of up to Rs 1.5 lakh can be claimed under Section 80C, while health insurance premiums of up to Rs 75,000 are eligible for tax exemption under Section 80D.
Additionally, donations made to specific institutions can be eligible for tax exemption under Section 80G of the Income Tax Act, 1961.
By utilising these tax-saving provisions, individuals can effectively lower their taxable income and potentially reduce their overall tax liability.
Also Read: How To Save Tax In India? Here's All You Need To Know About Tax Laws
Understanding Income Tax Slabs
It is essential to determine your income bracket, as the government announces income tax slabs annually. Currently, there are two regimes - the new and old regimes - each offering its own tax benefits.
The income tax slabs are applicable based on an individual's income. In general, individuals with higher earnings are required to pay a higher amount of tax.
Verify TDS Details
It is crucial to crosscheck the tax deducted by your employer with the details in Form 26AS to ensure accuracy. By comparing these two sources, you can identify any inconsistencies or discrepancies. If you notice any discrepancies, it is important to contact your employer for rectification and ensure that the correct tax deductions are reflected in both records.
Use Online Filing Platforms
Taxpayers are encouraged to utilize online tax filing platforms or e-filing portals provided by the income tax department for a convenient and accurate filing process. These platforms offer step-by-step guidance, making it easier for individuals to file their returns.
To access the official portal for e-filing of returns, visit https://www.incometax.gov.in/iec/foportal. This dedicated platform ensures that taxpayers can securely file their returns and access relevant resources and services provided by the tax authorities.
ITR Forms
When filing tax returns, it is important for taxpayers to include income from all sources, such as salary, investments, and rent. Choosing the correct form based on their income sources and financial situation is crucial for accurate filing.
Errors
In the event of an error, omission, or incorrect statement after filing returns, revisions can be made within the prescribed time frame. Taxpayers can revise their return during the three months prior to the end of the assessment year or before the completion of the assessment.
Verification
After filing the tax returns, the final step is to verify them. There are two options available for verification: online and offline.
For online verification, taxpayers can use the Aadhaar one-time passcode to access and verify their returns. The income tax department will send an e-verification mail to confirm the verification process. Alternatively, taxpayers can choose the offline option by sending a signed printout of the return to the Centralised Processing Centre in Bengaluru.
A common misconception exists that filing an Income Tax Return (ITR) is only necessary for those with a tax liability. In reality, regardless of whether you fall in tax bracket or not filing your ITR carries a range of hidden benefits.