Filing Income Tax returns: Filing a income tax return is essential for tax payment and claiming refunds of overpaid taxes. Tax filing simply means declaration of your income and taxes to the government. We all know paying our taxes is one of our legal obligations as a member of an organized society. Citizens are expected to pay taxes from their earnings. These taxes would in turn be used to provide social amenities to the masses in general.
Most tax payers encounter difficulties trying to file their income tax return. While some are usually in a fix on what method to use, others struggle with calculations.
Taxreturnwala, is India’s fastest growing e-filing organisation, explains things that you should keep in mind while filing an income tax return to ensure accuracy in all respects.
Choose approach for filing income tax return:
First, you have to decide the modus operandi that is the choice of method. Would you prefer filing online or offline?
If at all your income tax bracket is above INR 5 lakhs, it is mandatory that you file your income tax return online. Income earners below INR 5 lakhs can file offline but opened to e-filing also.
However, tax payers are advised to adopt e-filing because it is easier, quicker and stress-free. It also saves you a lot of money and refunds are usually faster.
Keep your records organized and up to date: Keeping records of your deductions, receipts, canceled cheques, income and purchases will save you lots of time when filing your income tax return. That is why it is important to keep your tabs organized throughout the year.
This has now been made very easy since we are in the digital age. You can properly organize them in folders and save to taxreturnwala’s integrated cloud database. Alternatively, you can make use of software’s and apps available on the internet. You can store your files on dropbox or box.com. Or on your computer using Nexus File v.
Outline your income sources: Determining your sources of income is very important before you start filing.Does your income comprises of only salaries? Do you earn from rents or any other sources?
Documents required: Certain important documents are required when filing your income tax return. They include (although none of these documents is required to be sent to income tax department unless demanded under any scrutiny, but yes the details need to be put in the form);
- Form No. 16- Usually issued by employer detailing your income from salary and tax deducted at source.
- Form No. 16A- Issued by all the payers who have deducted tax while making payment to you during the year. For example Banks where you have FDs.
- A/C statements: All your operating accounts during the year. Criteria for arriving at interest income earned during the year.
- Property details: If you have bought any property or put up existing property on rent. Include details for the rent received and receipts of municipal taxes paid during the year would be required. If the same is purchased through a loan then copy of loan certificates for interest & principal.
- Others: Any other documents for a financial transaction involving tax implications for computing your taxes.
Get your deductions right: Aside from forgetting about part-time income, most first-time filers do not include all the deductions they are entitled to. If you are a freelancer, you can write off a number of your business expenses including a portion of your home as your office. Some deductions that home-based freelancers are qualified for are office supplies, computers and hardware, business trips, out-of-home client meetings, business trips, and advertising/marketing.
Deduction of 80E for Tuition fees of children’s are allowed.
Review your income tax return: Having incorrect information in your filing will slow down the receipt of your tax refund. Check all numbers and do double calculations, as these are the most common mistakes of tax filers. Ensure your figures tally without any discrepancies.
With these few guidelines, you shouldn’t encounter any difficulty filing your income tax return.