8 things you need to know before filing your income tax returns

Every year around July 31, if you concentrate cautiously, you will be able to listen taxpayers running pillar to post to file their returns. Confusion stays rife, as they get caught inside the complex internet of laws which have been clearly put in place to make things less complicated.


This time, we’re going to keep your hand till the quit and make tax submitting a much less daunting experience.

Be careful for our collection of articles on tax filing.

First, allow’s recognize few important parameters and address a few questions earlier than you cross approximately submitting your tax returns.
What does filing tax returns mean?

A ‘go back of income’ or tax filing is the technique where someone reviews or broadcasts to the authorities, the information of their earnings and the taxes paid by them.

It’s far just like the ‘No Objection Certificates’ you need to get from the college library, before you leave college even if you by no means visited the library. It is to set up the truth that don’t have any notable obligation, or if there are any dues, they have been cleared.
Who needs to file profits tax returns?

Any person whose taxable earnings exceeds Rs 2.50 lakh, the fundamental exemption limit prescribed by the authorities, in a particular monetary year is required to file tax returns. This has to be achieved within the due date introduced with the aid of the government.
I have an Everlasting Account Range (PAN). Do I still want to file I-T returns?

A. Having a PAN card doesn’t exempt you from filing taxes. As said in advance, if your taxable profits exceeds the exemption restriction, you are liable to report taxes. But, at the turn-side, to report returns, you do need a PAN card.
What are the benefits of filling earnings tax returns (ITR)?

A. submitting returns or no longer has in no way been a preference. It’s far a felony obligation which must be fulfilled via all and sundry who falls under the prescribed category. But, in case you nonetheless needs more motives to file your returns, here are some:

a) To avail domestic or personal loans.

B) For visa and immigration processing.

C) It is an income proof or a net really worth Certificate.

D) For claiming extra tax paid through refund

e) Making use of for a higher coverage cowl

And last and maximum important is your peace of thoughts!
My tax is already deducted at supply through my agency and paid to the government, then why do I want to file profits tax return?

A. Even though tax has been deducted and there may be now in addition legal responsibility to pay tax, you need to compulsorily file your earnings tax return in case your earnings exceeds the simple exemption restrict.
I’ve not submitted my funding info like lifestyles’ insurance premium, to my organisation and excess tax has been deducted from my earnings. Can I declare my investments and claim the gain?

A Sure, you can claim a refund while submitting income tax returns.
What are the exceptional assets of income?

A before you start your online tax filing, you need to first determine the assets of your total income. Does your profits include of most effective revenue and interest on savings financial institution account or you furthermore may earn apartment income, capital gains, or income from every other supply?

Allow’s see exceptional heads and “assets of earnings” as per income Tax Act as follows:-

1. Revenue

2. Rental profits from house property

3. Earnings & gains from business or profession

Four. Capital gains on sale of shares or mutual budget or capital assets

5. Other sources like financial institution interests, etc.

You will need to feature your earnings earned under each “Head” after which compute your taxes. If you have a minor baby, take into account to feature the income received by way of him/ her. This could include earnings because of hobby on fixed deposits within the name of your minor youngster. For them, you’re not expected to file separate returns; they can be clubbed with the mother and father’ income.
What are the files required earlier than submitting earnings tax return?

Form No.sixteen: Issued by way of your business enterprise summarizing your earnings from profits and tax deducted at source.

Shape on 16A: Issued by means of all the payers who have deducted tax whilst making price to you during the yr. For instance, banks in which you have got fixed deposits.

Property information: If you have bought any property or put up present belongings on rent, then the info for the hire acquired and receipts of municipal taxes paid during the 12 months, could be needed. In case, you’ve sold assets by taking a mortgage, then you will want to publish copies of loan certificate for the interest and essential.

Agreement Notes: For sale and buy of shares during the year for calculating capital gains.

Tax challans: you will want to post the details of the tax payments made through you, in case you’ve paid any enhance tax or self-assessment bills.

Bank account statements: You’ll need bank account statements of all your working bills during the year for arriving at hobby income earned during the yr.

Others: another documents for a financial transaction related to tax implications for computing your taxes.

Note: You don’t want to publish any of those copies to the I-T branch during the manner of submitting earnings tax returns, or even originals are also now not required to accept to your CA, in case you are taking professional help. These documents are best required to help you prepare your tax computation and you need to keep Those copies available, in case the I-T department asks you to grant them.