Filing income tax returns is the responsibility of every salaried individual. This money allows the government to work on welfare schemes and strategies for the country.
However, ‘how to file income tax’ is a common concern among individuals, especially those who are new to it. Whether you are a regular taxpayer or a first-timer, understanding the process can make tax season a breeze for you.
Let us help you solve your queries about how to file income tax and familiarise you with the common mistakes to avoid.
Beginning the Application Process
Starting with the basics, here is the process you must follow to file income tax:
- Gather Your Documents: It is essential to get your paperwork in order. For this, you’ll need the following:
- Form 16: This is offered to salaried individuals by the employers, which summarises your income and tax deductions.
- Bank Statements: Gather your bank statements showing your interest income, if any.
- Investment Proofs: Keep records of your investments under Section 80C (like life insurance, PPF, etc.).
- PAN Card: This is your unique identity card for filing the tax.
- Choosing the Right Form
There are different forms for different sources of income. If you are a salaried individual, Form ITR-1 is the right option for you. For business owners or those with multiple income sources, Form ITR-3 or 4 might be a suitable option for you.
- Online or Offline Filing
Since you have got options, you must be wondering how to file income tax return online for salaried employees or others. Online filing is convenient, and you can fill it on the authorised income tax online portal using your details.
On the other hand, offline filing means a visit to the tax office with your paperwork.
- Step-by-Step Filing
You can follow this detailed process if you are browsing ‘how to file income tax return online’:
- Registration: Create an account on the e-filing portal using your PAN details.
- Form Filling: Choose the right form and start filling in the credentials. It is essential to match your income figures with your documents.
- Income Details: Enter your salary, interest income, and any gains from stocks – basically all about your income sources.
- Claim Deductions: If you have investments under section 80c, you can claim them here to reduce your taxable income.
- Review and Submit: Double-check your entries and submit the form.
Common Mistakes to Avoid
While finding answers to how to file income tax or fill out the form, you may need to correct some common mistakes. We have listed a few here to streamline the process:
- Incorrect Details: A simple typing error can cause trouble. It is essential to ensure that your entries are rechecked.
- Missing Deadlines: Filing ITR late might invite penalties. Ensure you file ITR before the due date.
- Not Reporting All Income: During ITR filing, even freelance gigs or the interest from your savings account needs to be reported.
Ease Your Hassles of Filing an ITR
Filing income tax is simple and easy if you follow the process thoroughly. With the proper preparation and understanding, salaried individuals can pay their taxes on time.
During ITR filing, Form 16, PAN Card details, bank statements, and statement proofs are some essential documents. Moreover, you must check all the figures and data provided to avoid nullification of your application. If you want to save taxes before ITR filing, get in touch with Canara HSBC Life Insurance experts. They offer different investment options that can favour you financially in the long run.
So, smarten up and diversify your funds today for tax savings!