Income Tax Returns are referred to as ITR in short. You must submit this document detailing your income to the tax office. Everyone must do this, even if they owe no taxes and have income that is much below the government’s taxable threshold. An individual or corporation that receives any income during the tax year is required by law to file a return each year. This income must be reported on the specified date and may come from any source, including capital gains, FD interest, salary, income from real estate, etc. The taxpayer is responsible for the penalty if they don’t make the payment on time. You get form 16 from the employers so before the due date is approaching file the ITR. Also, keep yourself updated on the rules so it makes it easy for you to submit tax returns. Some of the points have to be kept in mind before you file income tax Returns. This pointer will guide you to file your Tax Returns.
12 Facts To Know About Filing An Income Tax Return
1. Remember the due date
It is critical that you remember the deadline for filing taxes. March 31st is the date. Your income tax returns for the fiscal year 2020-21 are due on March 31, 2022. The original deadline was July 31, 2021, however, because of the pandemic, the government pushed it out to December 31, 2021, then to February 15, 2022, then March 15, 2022. After the March 31st deadline. Filing your IT before the due date ensures that you may easily carry over the loss experienced during that fiscal year.
2. Mandatory tax filling
Filing an income tax return is required if your taxable income before deductions exceeds 2.5 lakh. It is 3 lakh for older persons and 5 lakh for super senior citizens. It is also required to submit tax returns if one has long-term capital gains from the sale of stocks and mutual funds that exceed Rs. 2.5 lakh per year.
3. Penalty for failing to pay taxes on time
Failure to submit ITRs on time may result in a penalty and a demand for interest payment from the IT department. A penalty of 5000 is imposed under section 234F of the Income Tax Act for failing to file the tax return by the due date. However, if your income is less than 5 lakh you may have to pay rupees 1000.
4. Income Tax Refund
When you have paid greater tax liability under such situations, you may be eligible for a return of the excess money. If you have paid tax to the government and are due for it in a fiscal year as a consequence of advance tax paid or tax deducted at source TDS, you can seek a refund when you file your returns.
5. Aadhar card and PAN card must be linked
If you have both an Aadhar card and a PAN card, it is now required for all income taxpayers to link their Aadhar cards to their PAN cards per a Supreme Court decision from the e-rules last during the e-budget 2017. Those who have a PAN card but no Aadhar card have received a reprieve. Starting on July 1st of this year, the Aadhar card number will be necessary for both PAN applications and income tax filings.
6. Update your bank account
Updating your bank account is the most essential task to complete before completing your returns. Your account will automatically receive the payment if the IT department accepts it as due. The amount that is due for a refund, this is computed using a basic interest approach; it comes out to about 0.5% for a month or a portion of a month, or 6% annually. These interest calculations take into account several variables.
7. Filing the return is required even if TDS is deducted
Many people mistakenly believe that the return can only be filed when any tax is owed. But realize that this is untrue. If your income exceeds 2.5 lakh, you must file tax returns even if TDS is deducted.
9. Form 26AS and TDS
You can review the TDS calculations on Form 26AS before completing your income tax returns. This form, called a Tax Credit Statement, will list all TDS deducted from your income in detail. You will find it simple to file the returns once you know this.
10. Bank Interest income can be saved
The interest earned on the balance of a savings bank account should be declared on the income tax return. In addition, “a deduction of Rs 10,000 is available under Section 80TTA for interest income.” Savings interest income up to Rs 10,000 is thus indirectly exempt in the form of a deduction. The bank statement can be used to calculate this income. Interest is typically paid quarterly or semi-annually.”
11. ITR by e-verification
One of the essential stages required for completing a tax return is this one. We are grateful for the digital age because it now allows you to E-Verify your income tax returns rather than mailing ITR-Vs. As a result, the procedure moves along more quickly and without interruption.
12. Dividend tax
A person must pay an additional 10% income tax under the new regulation if their dividend payment exceeds Rs. 10 lakh. dividends on stocks or mutual funds are included in this.
The aforementioned points must be thoroughly understood before completing income tax returns. Taxpayers should understand that if they do not pay their taxes on time, they will be penalized or fined. As a result, every individual who is subject to paying tax must follow the rules of Income Tax and pay it on time.
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