The complexity of income tax laws and calculation methods might make tax filing appear like a daunting task for salaried employees. Not anymore. In this comprehensive guide, we aim to disarm you of that fear by simplifying the process of income tax filing for salaried individuals. Taking a step-by-step approach, we provide complete information to make an otherwise complex task into something you can easily accomplish.
In India, paying income tax is a statutory obligation for every individual who is earning an income above the basic exempted limit. Ensuring all the taxes you owe have been paid and correct amount of deductions are claimed, is crucial to avoid legal hassles in the future. Properly filing tax returns is not only a marker of being a responsible citizen, but also necessary for availing several financial benefits and services.
This article would be most beneficial to any employee working in the salaried class. Salaried employees from public, private, or government organizations would find this guide particularly helpful.
Additionally, professionals such as chartered accountants, tax consultants, and financial advisors may also use this guide as a helpful resource for their clients.
Income Tax Return (ITR): ITR is a form where taxpayers declare their taxable income, deductions, and tax payments. It is used by tax authorities to calculate tax liability.
Assessment Year: It is the year in which the income earned is assessed. This year follows the financial year. Suppose the financial year is from April 2018 to March 2019, then, the assessment year would be from April 2019 to March 2020.
TDS (Tax Deducted at Source): As the name suggests, it is the tax that is deducted from your income source. When TDS is deducted, it is your responsibility to file an income tax return.
Gather the following documents before filing your Income Tax Returns - Form 16, Salary slips, tax-saving investment proofs, bank statements, Home loan statement, if applicable, Aadhar Card, and PAN Card details. Other documents may include details of sold property and capital gains, if any.
Step 1: Begin by registering yourself on the Income Tax Department's official e-filing website using your PAN.
Step 2: Once after you have logged in, select the appropriate Assessment Year and the correct Income tax return form.
Step 3: Fill in all the necessary details, which would include salary income, property income, capital gains etc. Also, make sure to input all the deductions you are claiming.
Step 4: Cross check everything and then click on 'submit'. Upon successful submission, an acknowledgment summary is displayed.
Step 5: Lastly, e-verify your income tax return using either Aadhaar OTP, Bank E-account, or EVC on the registered mobile number.
The last date to file your Income Tax Returns is usually July 31st of any given year, unless extended by the government. Failure to file your tax returns within the due date can attract a penalty.
In India, taxable income is divided into various slabs and each slab has a different tax rate. Ensure to calculate your taxable income and corresponding tax liability correctly.
Avoid common mistakes such as incorrect personal details, reporting incorrect income figures, not declaring all sources of income, missing out on claiming deductions, and incorrect bank details.
Question: Can I file my tax returns after the deadline?
Answer: Yes, tax returns can be filed even after the due date but it may attract penalties depending on duration and amount of tax liability.
Question: What if I made a mistake in my tax return?
Answer: The income tax department allows revisions to be made in the filed return within a specified time period.
Question: Can I claim tax benefits for a home loan?
Answer: Yes, home loans do qualify for tax deductions up to a certain limit under Section 24 and Section 80C of the Income Tax Act.
Filing income tax returns for a salaried employee need not be a complicated process, as long as you have the right guidance and a clear understanding. This article endeavours to provide that clarity and guide salaried individuals through the simple steps of filing their income tax returns. Remember, paying our income tax and filing our tax returns on time is not just a legal duty, but an important responsibility as a citizen of India.
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