Income Tax Introduction:
Income tax is a direct tax that is levied on the income of individuals and entities by the government. It is one of the main sources of revenue for the government and is used for various public services and welfare schemes. Income tax filing is the process of declaring your income, expenses, deductions, and taxes to the government in a prescribed form called income tax return (ITR). It is mandatory for every person who earns income in India to file their ITR every year within the due date. Filing ITR has many benefits, such as claiming tax refunds, carrying forward losses, avoiding penalties and interest, and availing various exemptions and deductions under the Income Tax Act. In this blog post, we will discuss the basics of income tax filing, such as how to file ITR online, what are the documents required, what are the due dates, and what are the common mistakes to avoid.
What is income tax filing?
Income tax filing is the process of declaring your income, expenses, deductions, and taxes to the government. It is mandatory for every person who earns income in India to file their income tax return (ITR) every year. Filing ITR helps you to claim tax refunds, carry forward losses, and avoid penalties and interest.
Why is IT Filing important?
Income tax filing is important for many reasons, such as:
- It is a legal obligation and a proof of your income and tax payment.
- It helps you to avail various benefits and exemptions under the Income Tax Act, such as deductions for investments, donations, home loans, etc.
- It helps you to avoid scrutiny and notices from the Income Tax Department.
- It helps you to apply for loans, visas, credit cards, etc. as it shows your financial credibility and stability.
- It helps you to contribute to the development and welfare of the country.
How to file ITR online?
There are two ways to file your Income tax filing nowadays peoples are preferred to file on Online mode only it’s easy and simple way to filing.
Online mode: You can file ITR 1 and ITR 4 directly on the Income Tax e-Filing portal1 by logging in with your user ID (PAN), password, and captcha code. You have to fill in the required details, verify your return, and submit it.
Offline mode: You can download the applicable ITR utility (Excel or Java) from the Income Tax e-Filing portal1, fill the form offline, save the generated XML file, and then upload it to the portal. You have to log in, select the assessment year and submission mode, upload the XML file, verify your return, and submit it.
What are the documents required for IT filing?
The documents required for income tax filing may vary depending on your income sources, deductions, and exemptions. However, some of the common documents are given below:
- Pan and Aadhaar Card
- Form 16 (If Salaried)
- Form 26AS (Tax Credit Statement)
- Bank Statement
- Investment Proofs such as ELSS, PPF, NPS, etc…
- Donation receipts (If claiming deduction under Sec 80G)
- Home loan statement (If claiming deduction under Sec 80C or 24
- Medical bills (Claiming deduction under section 80D
- Capital gains statement.
You should keep these documents handy while filing your ITR online.
The due dates for income tax filing depend on your category and type of audit. For the assessment year 2023-24, the due dates are
- 31st July 2023 for individuals and HUF who are not subject to audit
- 30th September 2023 for individuals and HUF who are subject to audit
- 30th November 2023 for companies and other entities who are subject to audit.
According to the Income Tax Act, 1961, every person who earns income in India is required to file their income tax return (ITR) every year, if their income exceeds the basic exemption limit. The basic exemption limit depends on the age and tax regime of the person. For instance, for individuals below 60 years of age who opt for the new tax regime, the basic exemption limit is Rs 2.5 lakh. However, there are some situations where a person has to file ITR even if their income is below the basic exemption limit. For example,
- Deposited more than Rs 50 lakh in one or more savings accounts during the previous year
- Incurred expenditure of more than Rs 2 lakh on foreign travel during the previous year
- Paid electricity bill of more than Rs 1 lakh during the previous year
- Claimed relief under section 90, 90A or 91 (double taxation relief)
- Income from capital gains or speculative gains
- Income from more than one house property
- Income from business or profession
- Income from virtual digital assets (such as cryptocurrency)
- Any assets or financial interest outside India
- Signing authority in any account outside India.