The process of filing Income Tax Returns (ITRs) involves individuals and entities needing to report their income, deductions, and tax liabilities to the government. The process provides various benefits as well. For example, in case the tax gets deducted from an individual’s income despite their total taxable income being below the exemption threshold, a refund can be sought by filing the ITR.
Apart from this, timely filing of ITR aids in maintaining the credit score. This way, the approval process for seeking loans and credit cards gets a lot easier.
Moreover, ITR documents can also be used at the time of Visa applications for some of the countries to highlight a clear financial history. In addition, it aids in maintaining overall transparency in financial transactions related to an individual.
Taxable thresholds: It is crucial to gain insight into taxable limits and compare them with the total income. In case the total income is more than the exemption limit, then only the ITR procedure is required to be followed. The exception, however, remains in cases where tax is charged on the income despite being below the exemption limits, requiring people to file the ITR to claim a refund.
Deadline for ITR filing: When it comes to filing the ITR, doing it on a timely basis aids in avoiding penalties or interest that may be levied on any outstanding tax liabilities. Typically, July 31 is the due date for filing an ITR. Related details can be found on the official website of Income Tax India.
Types of ITR forms: Generally, ITR forms are of various types to cater to different sources of income. A taxpayer is required to select the suitable form depending on the source of income.
Deductions and exemptions: There are various exemptions provided under different provisions. These include exemptions under Sections 80C, 80D, etc, under the Income-Tax Act (ITA), 1961. A taxpayer should be well-versed with these exemptions, which will help in minimising the taxable amount and optimise tax liability.
Aadhaar and PAN linking: As per the government’s directive, it is mandatory to link Permanent Account Number (PAN) details with the Aadhaar card for filing ITRs.
Rajiv is an independent editorial consultant for the last decade. Prior to this, he worked as a full-time journalist associated with various prominent print media houses. In his spare time, he loves to paint on canvas.