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Income Tax return:-
Understanding your Form 16:-
Your employer must have given you a Form 16, which is a certificate of the TDS from your salary. For most salaried individuals, th e Form 16 has nearly all the details they need to put in their tax return form. But if they have other investments as well, there could be TDS certificates from the bank or bond issuer on the interest they might have earned. These details need to be fille d in the tax return form.
A refund is not the only reason to file your tax return. Your return is a declaration of your income and will come handy when you are seeking a loan, buying property, going abroad or even taking a large insurance cover. Banks want to see your income details before they extend a loan. Many countries want to know if you are financially stable before they issue you a visa. Insurance companies want to know if the cover you want is commensurate with your income. The income tax return i s your single sheet answer to all these queries.
Not filing your return can have serious repercussions. You can be slapped with a penalty of up to `5,000 even though all your taxes are paid. Besides, it will unnecessarily raise suspicion and the income tax department may scrutinise your finances further.
As the July 31 deadline for filing income tax
returns looms, there is usually a huge rush among the taxpayers. To avoid the
long queues and complications, most people prefer to delegate the task to tax
consultants or chartered accountants.
But
filing of income tax returns online has emerged as a better option and is
becoming increasingly popular. The number of electronic tax returns almost
doubled to as many as 16.4 million in 2011-12. This is slightly less than half
the 35 million-odd returns filed for the year.
E-filing of return is easy, fast and
secure. You can file your return online without much bother if you take care of
a few things.
There are two ways of filing the return online.
 |
| Income tax return |
New income Tax Return forms complete details
Tax deduction at source:-
At the beginning, Your employer calculates the tax payable and deducts it from your salary. But since tax is payable on th e combined total income, the TDS by your employer may not suffice unless your income from other sources (interest, rent, capital gains, etc) has been factored in. If you changed jobs during the year, you must report the income from the previous employer a s well. If you don't do that, you will end up availing the basic exemption twice in a year, which will lead to a big tax outstanding at the end of the year.
Before your employer deducts tax, you are asked if you have made any tax saving investments or are eligible for any other deduction or exemption. You can invest up to Rs 1 lakh in any option under Sec 80C. Some of these are automatic-your contribution to the PF, for instance. The other options are PPF, NSCs, tax saving FDs, ELSS mutual funds, life insur ance policies and pension plans. Your choice should be guided by your needs and ability and willingness to take risk.
At the beginning, Your employer calculates the tax payable and deducts it from your salary. But since tax is payable on th e combined total income, the TDS by your employer may not suffice unless your income from other sources (interest, rent, capital gains, etc) has been factored in. If you changed jobs during the year, you must report the income from the previous employer a s well. If you don't do that, you will end up availing the basic exemption twice in a year, which will lead to a big tax outstanding at the end of the year.
Before your employer deducts tax, you are asked if you have made any tax saving investments or are eligible for any other deduction or exemption. You can invest up to Rs 1 lakh in any option under Sec 80C. Some of these are automatic-your contribution to the PF, for instance. The other options are PPF, NSCs, tax saving FDs, ELSS mutual funds, life insur ance policies and pension plans. Your choice should be guided by your needs and ability and willingness to take risk.
Don't buy an insurance plan if you don't have dependants. Don't
jump into equity-based ELSS funds if you can't stomach the risk of stock i
nvestments. There are other deductions too. Medical insurance policies for
yourself or your parents are eligible for deduction under Sec 80D. If you
submitted documentary proof of all these investments to your employer within the
stipulated time, the TDS will be low. But if you missed the deadline, you would
have paid more tax than was due.
Do you have to file your return?
The CBDT has exempted taxpayers with an income of less than Rs 5 lakh from filing their tax return. However, you can avail of this exe mption only if you have income from salary and bank interest. Also, this interest should not exceed Rs 10,000 in a year and you should have paid the tax due on it. You should also not have any tax refund due.
If you have paid more tax than due, the only way you can get it back is by filing your return. Don't look at filing your tax return as a painful exercise. Instead, think of it as sending a bill to the Income Tax Department demanding a refund of the amount you overpaid in taxes during the previous year . The sooner you do it, the better it is for you because the faster your tax refund reaches you.
Do you have to file your return?
The CBDT has exempted taxpayers with an income of less than Rs 5 lakh from filing their tax return. However, you can avail of this exe mption only if you have income from salary and bank interest. Also, this interest should not exceed Rs 10,000 in a year and you should have paid the tax due on it. You should also not have any tax refund due.
If you have paid more tax than due, the only way you can get it back is by filing your return. Don't look at filing your tax return as a painful exercise. Instead, think of it as sending a bill to the Income Tax Department demanding a refund of the amount you overpaid in taxes during the previous year . The sooner you do it, the better it is for you because the faster your tax refund reaches you.
Understanding your Form 16:-
Your employer must have given you a Form 16, which is a certificate of the TDS from your salary. For most salaried individuals, th e Form 16 has nearly all the details they need to put in their tax return form. But if they have other investments as well, there could be TDS certificates from the bank or bond issuer on the interest they might have earned. These details need to be fille d in the tax return form.
A refund is not the only reason to file your tax return. Your return is a declaration of your income and will come handy when you are seeking a loan, buying property, going abroad or even taking a large insurance cover. Banks want to see your income details before they extend a loan. Many countries want to know if you are financially stable before they issue you a visa. Insurance companies want to know if the cover you want is commensurate with your income. The income tax return i s your single sheet answer to all these queries.
Not filing your return can have serious repercussions. You can be slapped with a penalty of up to `5,000 even though all your taxes are paid. Besides, it will unnecessarily raise suspicion and the income tax department may scrutinise your finances further.
How to file your return:-
You can file your return online or
offline, by yourself or with the help of a tax professional. It is advisable to
take the help of a tax professional at least for the first time. A chartered
accountant will be able to guide you on how to fill up the form and choose the
ITR form that is applicable to your case. Once you get the hang of it, you can
start filing your return by yourself. Online filing is very simple and doesn't
require too much effort. There are websites that guide you at every step of the
process.
They even choose the correct ITR form for you based on your income so there is zero chances of you going wrong. For as little as Rs 200-250, some portals even cross check your return before it is filed to make sure it is error free. It is a small fe e to pay for peace of mind.
They even choose the correct ITR form for you based on your income so there is zero chances of you going wrong. For as little as Rs 200-250, some portals even cross check your return before it is filed to make sure it is error free. It is a small fe e to pay for peace of mind.
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