Many people, especially new taxpayers, find filing their Income Tax Return complicated. But it’s necessary to file your return. If you’re entitled to a tax refund, filing your return will help you get it back and if you have taxes due you can pay them. Here are a few things to keep in mind before filing your ITR.
Keep Required Documents Handy
The most important thing to start with ITR filing is getting the required documents together. Documents you would need would vary depending on the types of income you have. Documents commonly required (depending on your situation) include: Form 16 from your employer, Interest statement for interest earned on savings bank account and fixed deposits, TDS certificates, Proof of various deductions (80C to 80U) to be claimed, statement of Interest paid for home loan etc.
Stay away from Phishing Mails: “Income tax department NEVER asks PIN, OTP, Password, or similar access information for credit cards, banks or other financial account related information through e-mail or phone calls. Tax payers are cautioned NOT to respond to such e-mails or phone calls and NOT to share personal or financial information,” the department said.
When should you use ITR 1?
If you have income from salary or pension, income from one house property or income from other sources like dividends, interest income and so on, you need to file income tax returns using ITR 1 or SAHAJ.
When should you use ITR 2?
If you have income from salary or pension, income from house property, income from capital gains, income from other sources as a partner in a firm or even agricultural income which exceeds INR 5,000, you need to file income tax returns using ITR 2.
When should you use ITR 3?
If you have income from salary or pension, income from house property, income from other sources or income from a business or profession, you need to file income tax returns using ITR 3.
Quoting Aadhaar
The Finance Act, 2017, made it mandatory to quote Aadhaar to file an ITR, with effect from 1 July 2017. While the decision was challenged in the Supreme Court, the apex court allowed the decision of the government. “You have to mention the 12-digit Aadhaar number or the 28-digit Aadhaar enrolment number while filing the income tax return. Till last year, it was optional to mention the Aadhaar number while filing returns.
What are the benefits of filing Income Taxes Return?
We know it’s a tedious task to file Income Taxes Return in India, but this process brings in a lot of benefits with it, here are a few of them:
• The last day to file Income Tax Return is July 31, but it is preferable to file your return before the due date in order to avoid extra traffic, in the end moment.
• In case one has missed filing tax returns for the previous year, every additional day till July 31 increases the penal interest. That’s the reason we suggest you to file Income Tax Return beforehand.
• Filing Income Taxes Return on regular basis creates a good financial history for you. It helps you to get a visa and bank loan.
• It is a proof of your Income and is also a Financial Record.
