Income tax return filing is a yearly action that every responsible citizen of the country is expected to do. It serves as a foundation for the government to determine the quantity and means of expenditure of citizens, as well as a platform for assesses to request refunds and other types of relief as needed.
Income tax return filings are required for some people but optional for others, according to the law. The IRS now allows you to file your income tax return online through e pay tax online, which takes only a few minutes in most circumstances.
Who Is Required To File Income Tax Returns?
According to income tax legislation, any assessee whose gross total income (GTI) exceeds the lowest income tax bracket for his or her age must perform income tax return filing. Assessees under the age of 60, between the ages of 60 and 80, and over the age of 80 are entitled to a basic exemption of 2.5 lakh, 3 lakh, or 5 lakh, respectively.
Individuals who have a GTI below the basic exemption amount may be required to income tax return filing under certain circumstances. If you fall under any of the categories listed below, you must file an ITR.
- If your electricity bill totals more than 1 lakh for a single bill or the entire financial year.
- If you have a current account with a bank or a cooperative bank with a balance of one crore rupees.
- If you are a permanent resident who receives income from a different nation AND/OR has assets in a foreign land AND/OR has signing authority over any account located outside the country.
- If you have spent more than Rs. 2 lakh on yourself or others in preparation for a journey to another nation.
Before claiming a deduction on capital gains incurred under any of the following provisions – 54, 54B, 54D, 54EC, 54F, 54G, 54GA, or 54GB – make sure your GTI does not exceed the basic exemption level.
Tips To Remember While Filing Your ITR For FY 2020-21
Here are some quick suggestions to remember while filing your ITR for FY 2020-21:
Select The Appropriate ITR Form
There are seven forms available on the official income tax return filing website, and you must select the correct one. If you fill out the improper IT form, your application may be rejected, and you may even receive a letter from the department. Before filling out each form, read the instructions carefully.
Be Wary Of Phishing Emails
Through e-mail or phone conversations, the Income Tax Department will never ask you for your OTP, Password, or other similar information for credit cards, banks, or other financial institutions. As a result, taxpayers are advised to ignore such e-mails and phone calls and to never divulge their personal or financial information to anyone. Keep your investment documents in a safe place.
You must also disclose any capital gains made from the sale of shares, mutual funds, or real estate, in addition to providing a thorough breakdown of interest profits from fixed deposits, IT refunds, and so on. If you sold a property within a given fiscal year, you must disclose the complete information on the buyer while paying your taxes.
Don’t worry; the online e pay tax online form will provide spots for you to fill in this information. However, keep all of your investment papers on hand to speed up the data entering procedure.
Calculate Your Income Tax Liability Based On The New Or Old Tax System
Individuals and HUFs can select between the new and old tax regimes starting in FY 2020-21. Concessional tax rates are available under the new tax structure. Whereas, under the current tax system, the taxpayer can take advantage of a variety of exemptions and deductions. Individuals who choose a new tax system for the fiscal year 2020-21 should remember to submit Form 10IE. Form 10IE is a declaration that the taxpayer must file to either opt in or out of the new tax regime. The abovementioned form can be submitted electronically through the income tax e-filing system by taxpayers. It must be provided prior to the filing of the relevant assessment year’s income tax return filing.
Determine your income tax burden based on the tax regime that is most favorable to you (old or new).
Senior Citizen Income Tax Rates
If you are a senior citizen between the ages of 60 and 79, you would be eligible for a basic tax exemption of up to 3 lakh INR. The basic tax exemption amount for those above the age of 80 is 5 lakh INR.
TDS On Rented Property
Tenants who pay a monthly rent of more than Rs 50,000 must deduct TDS at a rate of 5%. However, your landlord will receive credit for the TDS, and you will not be able to deduct it from your tax liability.
Make Sure You Don’t Make Any Mistakes When Filing Your ITR
After you’ve gathered all of your financial data, make a broad summary of it, including professional receipts, rent, dividends, capital gains/losses, salary, savings interest, and so on. Similarly, you can gather all information on investments made throughout the year in order to save money on taxes. You can prevent underreporting income and underclaiming deductions by following this procedure.
Be a responsible citizen and pay your income taxes on time, as it is only via tax payments that our country will be able to stay up with other developed countries and continue to prosper.
It’s also important to realize that simply submitting your income tax return filing isn’t enough. Otherwise, your filing will be canceled if you do not validate it within the 120-day deadline. The return can be digitally signed or e-verified online using Aadhaar OTP or net banking. Otherwise, mail a validly signed ITR-V to Bengaluru’s Centralized Processing Center (CPC) by regular mail or Speedpost, not e pay tax online.