Learn More on Annual Income Tax Return Filing in India Here
In India, income tax is the biggest revenue generator for the central government, with total tax revenue exceeding in billions of dollars. Income Tax Return is the form used by individuals or businesses to file appropriate information about their income and tax; then subsequently submit it to the Income Tax Department. But do you know how does annual income tax return filing in India work? There are few requirements and procedures for one to file an income tax return. Find out how yearly income tax return filing in India is done here.
How Do We Know if One Needs to File Income Tax Returns?
Generally, according to the Tax Act, anybody less than the age of 60 years and has an annual income of more than Rs2.5 lakh needs to file income tax returns. An organization, on the other hand, must record annual assessment forms if the said company has brought pay or a misfortune during their financial year. You will have to document returns that you have entered any transaction under the Annual Information Return. Additionally, the return has to be filed for any income from property, such as medical institution.
Guides to File Your Income Tax Return (ITR)
Once you find you or your business fit the criteria for income tax returns, you need to know the right steps that are required in order to file your ITR. The following are guidelines to file your ITR:
• Documents Such as TDS Certificates Are Required (Form 16/6A)
You will have to collect your documents that are needed for your ITR; these include your salary slips, interest certificates and Form 16. These documents will be calculated in your taxable income and give you a figure of tax deducted from your income.
• Check Forms 26As
Check your TDS certificates with form 26As; this is done so that tax deducted is deposited with government and against your PAN.
• Avoid Errors
Be meticulous when keying in the amounts in the TDS certificates (Form – 16, Form – 16, etc.); Form 26AS must be aligned. If there is an error, you will not be able to claim the credit on that tax deducted.
• Calculate Total Income for the Financial Year
You will then have to calculate total income chargeable to tax after verifying all the taxes that were deducted from your income. Proceed this step when you have collected all documents.
• Calculate Your Tax Liability
It would be best if you computed your assessment obligation by applying the expense rates in power for FY 2019-20 according to your salary chunk. The personal assessment sections and rates have stayed unaltered for FY 2019-20 when contrasted with the earlier year.
• Compute Final Tax Payable if Any
When you have figured your assessment obligation in the prior advance, deduct the expenses that have been as of now paid by you through TDS, TCS and Advance Tax during the year. Include intrigue, assuming any, payable under segments 234A, 234B and 234C.
• Document Income Tax Return After All Taxes Are Paid
You can start the process to file your ITR once you have settled your taxes. Keep in mind that any claim for refunds from the tax departments is only allowed if you have filed your approved ITR.
• Verify ITR
There are five electronic methods and one physical verification step. Be sure to verify it in within 120 days, or it will be automatically rejecting.
• E-verification From Tax Department
The tax department will also verify you regarding your ITR through an electronic method, such as an e-mail. Remember to register your e-mail address for e-filing account.
• IT Department Will Acknowledge Return After Verification
The tax department will only process your ITR once it has been verified and will notify through your registered e-mail. If there is an error, they will request you correct your mistakes instead of rejecting it.