Filing Income Tax Returns: A Guide for Beginners
Save Taxes with Expert Assisted ITR filing
Filing income tax returns (ITR) can seem daunting, especially for first-time filers. However, it is a crucial financial obligation that every taxpayer needs to fulfil, but with proper guidance, you can file your ITR with ease. Filing your ITR on time not only saves you from unnecessary penalties but also helps you in availing various financial benefits such as relatively easy access to loans, avoidance of interest, the ability to claim a tax refund, credit cards and simple visa processing etc. In this article, we provide you with a step-by-step guide through the complete process of filing an income tax return.
Determine Your Income Sources
Before you file your ITR, you need to determine your income sources. Your income can come from various sources, such as salary, rental income, Business income, capital gains, and interest income. Ensure that you have all the necessary documents related to your income, such as Form 16, Form 16A, and interest certificates.
Calculate Your Tax Liability
Once you have gathered all the documents related to your income sources, you need to calculate your tax liability with relevant deductions. Some of the commonly claimed deductions are investments in Provident Fund, Public Provident Fund, National Pension System, and life insurance premiums. Alternatively, you can consult a tax expert to help you calculate your tax liability.
Choose the Correct ITR Form
The next step is to choose the correct ITR form. The Income Tax Department has several ITR forms, each meant for specific types of taxpayers. Make sure you choose the correct ITR form that matches your income source and tax liability.
Latest changes in The Income Tax Act- There are many changes in the Income Tax Act from adding Crypto tax, taxes on long-term capital gains, filing of updated income tax returns and many more which will require expert hands to complete your filing of tax returns for smooth sailing.
Fill in the Details
Once you have chosen the correct ITR form, you need to fill in the details. You need to provide your personal details such as name, PAN, address, and contact details. You also need to provide details of your income sources, deductions claimed, and tax payments made.
Check the Tax Liability and Pay Taxes Due
After filing your ITR, you need to check the tax liability and pay the taxes due. Individuals can choose the payment method that is most convenient for them whether online or offline. Online payment can be done through net banking, credit card, or debit card. Offline payment can be made through bank challans. You may need to produce these documents in case of any future tax audits.
Verify Your ITR
Once you have paid your taxes due, you need to verify your ITR. You can do this either online or offline. Online verification can be done through Aadhaar OTP, net banking, or bank account number. Offline verification requires you to print and sign the ITR-V form and send it to the Income Tax Department within 120 days of filing your ITR.
Saving and Investment Plans
As your tax returns are filed correctly and efficiently, a taxpayer will save money which can be further used in tax-saving investments to gain deductions and avail tax-saving options.
Keep Your Documents Safe
After you have filed your ITR, ensure that you keep all the documents related to your income, tax payments, and deductions safe. You may need to produce these documents in case of any future tax audits.
Conclusion: Filing income tax returns is a crucial financial obligation that every taxpayer needs to fulfil. But all this procrastination of tasks will lead to hassles and wrong filing of the returns. However, if you still have any doubts, you can consult a tax expert to guide you through the process.
