Income Tax Return (ITR) filing 2024: The ITR filing can be a challenging task for a first-time taxpayer as it requires understanding the process, keeping ready key documents and identifying the applicable and appropriate ITR form for e-filing of tax return. In the ITR form, all the incomes and investments applicable for deductions and exemptions are outlined and basis that the corresponding taxes payable for a specific financial year get calculated.
The income reported in the ITR can be from one or multiple sources like salary, business profits, rentals from property and capital gains from investments. Apart from that, the taxpayer also needs to report his or her income from other sources like dividends, interest income, royalties, etc.
The Income Tax Department has notified seven types of ITR forms – ITR-1 to ITR-7 for e-filing tax return for FY 2023-24. The selection of the appropriate form depends on the taxpayer’s earnings type, amount, and category. Each form is different and contains different requirements to accommodate various types of taxpayers based on their profiles. Choosing a right ITR form is key to file an accurate and law-compliant tax filing.
For a first-time taxpayer, understanding the tax-filing process makes things easier. Here are 10 tips for beginners who want to e-file their income tax return (ITR).
1. Understand the basics:
Income tax is a direct tax that individuals and entities pay on their income to the government. The financial year (FY) runs from April 1 to March 31, and the assessment year (AY) is the year following the FY during which the income is assessed and taxed.
2. Gather key documents:
Having all the necessary documents ready will streamline the filing process. These include:
a. PAN Card: Permanent Account Number (PAN) is mandatory for filing ITR.
b. Form 16: Issued by your employer, this form summarizes your salary and the taxes deducted.
c. Bank Statements: To account for interest income and other financial transactions.
d. Investment Proofs: Documents related to investments for tax-saving purposes (e.g. PPF, NSC, ELSS).
e. TDS Certificates: Certificates of Tax Deducted at Source from other income sources.
f. Form 26AS: A consolidated annual tax statement that shows details of taxes deducted on your behalf and taxes paid by you.
3. Register on the e-filing portal:
If you’re filing income tax returns for the first time, the first step is to register yourself on the portal. Follow these steps to register:
a. Visit the e-filing website.
b. Click on ‘Register’.
c. Select ‘Taxpayer’ and enter your PAN details, then click ‘Validate’.
d. Provide your details like name, address, gender, etc.
e. Enter your email ID and registered mobile number.
f. Fill out the form and click ‘Continue’.
g. Verify your details; an OTP will be sent to your registered email ID and mobile number.
h. Enter the OTP to complete verification.
i. Set up a password and secure login message.
j. Click on ‘Register’. You’ll receive an acknowledgment message on the success of the registration process.
4. Choose the correct ITR form:
The Income Tax Department provides different ITR forms for various types of taxpayers. For most salaried individuals, ITR-1 (Sahaj) is applicable. Ensure you select the correct form based on your income sources:
ITR-1: For individuals with income from salary, one house property, and other sources (interest, etc.) up to Rs 50 lakh.
ITR-2: For individuals and HUFs not having income from business or profession.
ITR-3: For individuals and HUFs having income from a proprietary business or profession.
ITR-4 (Sugam): For presumptive income from business or profession.
5. Verify Form 26AS:
Form 26AS is a consolidated annual tax statement that shows the details of taxes deducted on your behalf and taxes paid by you. Cross-check the details in Form 26AS with your documents to ensure accuracy. This form is available on the income tax e-filing portal and can be downloaded.
6. Claim deductions:
There are various deductions available under the Income Tax Act that can help reduce your taxable income:
Section 80C: Deductions for investments in PPF, EPF, NSC, life insurance, etc. up to Rs 1.5 lakh.
Section 80D: Deductions for health insurance premiums.
Section 80TTA: Deduction for interest on savings accounts up to ₹10,000.
Section 24(b): Deduction for home loan interest up to ₹2 lakh.
7. Report all your income:
Ensure you report all your income sources accurately. This includes salary, interest income, rental income, and any freelance or part-time earnings. Non-disclosure can lead to penalties and legal issues.
8. File before the deadline:
Filing your ITR before the deadline is crucial to avoid penalties and interest. The deadline for individuals is usually July 31 of the assessment year. Filing late can attract a penalty of up to Rs 10,000. Additionally, filing early can help you avoid last-minute rushes and errors.
9. Seek professional help if needed:
If you find the process overwhelming, don’t hesitate to seek help from a tax professional. They can guide you through the complexities and ensure your return is filed accurately. Professional help can be particularly useful if you have multiple income sources or complex investments.
10. Keep a record:
Maintain records of your filed ITR, acknowledgment receipt, and all supporting documents. These are essential for future reference and in case of any discrepancies or queries from the tax department. Keeping organized records also helps in easy filing in subsequent years.
Conclusion:
Filing your ITR for the first time doesn’t have to be stressful. By understanding the basics, organizing your documents, choosing the correct form, and following these steps, you can ensure a smooth and error-free filing experience. Remember, timely and accurate filing is not just a legal obligation but also a step towards responsible financial management.
Source: financialexpress
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This blog is purely for educational purposes. Mutual fund investments are subject to market risks, read all scheme-related documents carefully.
