Getting income in your account every month is really too comforting, but filing the income tax returns for the same annually is quite a pain! However, if you know the easy ways to file your ITR accurately then there would be no pain in doing this. Income tax returns would not give you same excitement as claiming the income, but it is quite important and mandatory to file your returns regularly if you have annual income higher than 5 lakhs.
Filing ITR doesn't always mean that you would be paying tax as most of the salaried people do pay their taxes in the form of TDS (Tax Deducted at Source). There are many tax exemptions offered later based on the investments, expenses, and even the salary heads. All these would result into return of excess tax paid in the form of TDS. You would be able to claim this tax returns only when you file ITR. Hence, even if you are not having regulatory obligations to pay the tax or file ITR, do it if you have a source of income. Remember, filing ITR doesnâ€™t always mean paying tax!
Do it yourself - ITR can now be done online by visiting the income tax website https://incometaxindiaefiling.gov.in that is government run website. You can file your returns for free on this website, but it would require a bit or proficiency and much of accuracy.
Use income tax software online - Using ITR filing software is another free option you can explore, if you are not getting your income from multiple sources. Such option would work for relatively simple financial year that doesn't have different income heads, new addition to your income or property, or even to your life.
Hire tax consultant online - In case of complexities, you can hire the tax consultant online as well. The online consultant will charge nominal fees for filing the returns, but reduce major hassles of tax filing.
Hire the tax consultant in person - This is for those who may not want to go the online way. You may hire a tax consulting firm or the consultant in person. All you have to do is share your financial details like income, savings, and expenses with valid documents, while the rest is done by the consultant.
What would be your assessment year?
This is the first thing that you need to select when it comes to filing returns, and here is where the confusion starts. Assessment Year (AY) is the year when you are filing the returns. Financial Year (FY) on other hand is the year when you earned the income. FY in India starts from 1st April to 31st March, so it spreads over two different calendar years. The Form 16 is prepared for the FY and then it is filed on the income tax website for the AY. Example - For the income earned in FY 2016-2017, the AY would be 2017-2018.
Tax Deducted at Source (TDS)
When everything has gone online, the information about TDS is also present online. You will have to view Form 26AS. The link to view this form is already present on the Income Tax website. Once you are logged into your income tax account, click on the link under the title 'View your Form 26AS'. You will get all the details of the tax deducted by your employer or business associates. If your income doesnâ€™t fall under the taxable slab, then the entire TDS can be claimed as return.
ITR Forms are also presented under different heads. The information about the ITR form and where it is applicable is clearly mentioned. One should select the form that suits his/her income specifications. If you are finding it difficult read the description thoroughly or take help from the online software.
Authenticity of the details
Remember, you are not updating your status on the social networking site that you can edit or delete the same if something goes wrong. You are doing it for the government website where even the minor detail matters. Enter the correct account details, communication address, income, savings, and investments details. The refund is calculated on the basis of the details you provide. Again the refund is processed online and amount is deposited in your account. Don't go wrong with the account details like account number, IFSC code, and other such details. Communication address would stay there for reference and would be used for all future communications from the Income Tax Department. It is therefore recommended to doubly check the details before you furnish the same on the website to avoid any future discrepancies.
Look out for income tax deductions
Paying the tax is the skillful task and so is saving the same. There are various tax deductions available under different government investment schemes that you can use to save on your hard earned money being paid as tax. These savings can be made under following sections -
Section 80C covering various forms of investments.
Section 80CCC for the investments made under pension scheme.
Section 80CCG for equity savings.
Section 80D for medical insurance premium payment.
Section 80DD for the medical treatment of dependent with some kind of disability.
Section 8DDB for expenses incurred in medical treatment.
Section 80E for interest payment on the loan taken to meet educational expenses.
Section 80EE for loan interest payment on home loans.
Section 80G for donations made to charitable trusts and some funds
Section 80GG for the rent payment
Section 80GGA for the donations towards rural development or scientific research.
Section 80GGC for donations towards political parties.
Section 80QQB on income made from book royalty.
Section 80RRB for royalty income made from patents.
Section 80TTA for interest earned out of savings deposits.
Section 80U for person with disability.
ITR filing is not a rocket science. However, with little knowledge, more of accuracy, time investment, and online help, you can make it possible with proper savings without violating government regulations. Be a responsible citizen, file your ITR regularly on time!