Income Tax Return is the common document that serves as income proof for all groups; businessmen, working professionals, and self-employed individuals. There are people who ignore filing an ITR assuming they are successful in saving taxable income. That is not the real scenario. Any individual who earns more than Rs 2,50,000 must file an ITR. It is beneficial in many ways. With proofs of Income Tax Return, you gain better chances of loan approval, visa approval, and filling a government tender. The concept of filing ITR has made everyone’s life transparent and easy. If you have been regularly filing an ITR, you are doing a good job. If it is your first time or you think you messed up in the past few years, here’s what can make your task easier. There are a few checkpoints while filing Income Tax Return. This blog explains four most important checkpoints.
Check the Documents
When filing your ITR every year, you must keep a check on the documents you are required. Without the correct documents such as income proof, investment proof (e.g. term life insurance copy), interest earned proof, Form 16, Form 26AS, house rent proof etc. you may have to redo the entire process of filling those documents. You need to fill your ITR on the right form too. When you have everything at hand’s reach, the job of filling an ITR gets easier than ever. One more advice is to file your ITR before time and not wait for the last minute. Leaving it for the last minute can get on your nerves and increase the chances of human errors. Documents that you need to submit may vary from what others need to submit. The deciding factor is the type of income.
Collect TDS Information
TDS or Tax Deducted Source is another essential element that you must have before filing your ITR. An employer or a payer deducts TDS. The amount that the employee or the payee doesn’t get goes to the government account. There are two types of TDS, and you should know which one to get. One is Form 16 and the second one is Form 16A. You should receive a TDS certificate by the end of every year. Further, you add the correct detail of the TDS deduction with that of the form 26AS. In case of a mismatch or discrepancy, you may call for a trouble from the department of Income Tax.
Collect Interest Receipts on Bank Account
Do you have a Saving Bank Account? If yes, you earn interest on the amount you have. If the interest you earn is Rs 10,000 or less, you get an exemption. If not, you need to show the deduction under Chapter VI A, Section 80 TTA. Your FD and RD interests are taxable too. Together with the savings interest, you also declare FD and RD interest.
Link Your Mobile Number
For the quick and easy access to the ITR process, linking Aadhar Number with the PAN Number is mandatory. This is possible only after you receive an OTP on your registered mobile number. For those who may be thinking they can do without linking their mobile number, they may have trouble uploading ITR documents; which otherwise is a work of a few minutes.
Having said that, do you want to keep a control on your outgoing tax amount? You can be happy as there are several tax saving instruments that can help you be exempted for tax. Names that are familiar are Term life insurance or any life insurance, ELSS, PPF, NPS, NSC, Health Insurance, and ULIP. While you are aware of most of the tax saving instruments, something that may catch your attention is Term insurance.
Term insurance is an insurance policy that lets you control your future with a lumpsum amount or monthly payout benefit under two circumstances; either your demise or disability due to a major accident or illness. Paying a nominal amount can help you give financial security to your loved ones. Also, it gives tax benefits up to Rs 1.5 lakh under Section 80C. As this concept benefits the tax payer as well as the dependents, it is useful to purchase the policy.
Filing an ITR is a duty of every Indian citizen. If you have been avoiding the task considering it to be a tedious one, you should feel stress-free. With these four important points checked, filing an ITR becomes a piece of cake for you. Are you filing your ITR this year? Hurry up!