As a first-time taxpayer, you’re probably confused about the hows, wheres, whys, whens, and whats of e filing of income tax return. It’s a difficult moment, but don’t let it get to you. We’re here to assist! Continue reading for some pointers on how to make ITR filing easier for first-time taxpayers.
The income tax filing procedure is more complex than it is sometimes portrayed. Yes, you must understand the procedure, the tax rules and perks, the necessary paperwork, and other details that will make ITR filing a breeze. So, let’s get straight into the crucial points that first-time taxpayers should remember while completing Income Tax Returns (ITR).
Factors to Keep in Mind While Filing ITR for the First Time
If you are filing your ITR for the first time, before submitting the ITR tax filing, ensure you have all the necessary information and paperwork. To make submitting IT taxes easier, we’ll go through several key points to remember.
Keep All Pertinent Documents
Form 16, evidence of investment for reductions, TDS data, rent receipts, house loan interest certificates, and other documents must be kept carefully when e-filing of the income tax return. It is also critical to save documentation of IT return filings for future reference. Many assessees discard such records once the IT return filing procedure is completed. These are important records that the Department of IT may need.
The Interest Earned Must Be Stated
Even though the interest income deduction was eliminated three years ago, many individuals still need to report the interest they may have received on bank deposits or NSC certificates. Whatever the amount, such interest should be stated in the return. One should not make the error of disregarding interest income entirely because it needs to be reflected on Form 16 since, in many circumstances, the employer may not have considered the interest income at all when calculating the employee’s TDS. Section 80TTA allows assessees to claim a deduction for interest on savings bank accounts.
Disclose Investment Income
Another common error made by many taxpayers is failing to include investment income. You must record and account for all income, including investment income such as interest on fixed deposits and capital gains from the sale of mutual fund investments or any other asset. Aside from wages, include these earnings under the Income from Other Sources heading.
Certain deductions are also permitted. Section 80TTA of the Income Tax Act states that people under 60 may deduct up to Rs. 10,000 from the total interest received in a year from bank and post office savings accounts.
Make Certain That Revenue is Accurately Disclosed
The ITR filing procedure requires assessees to report all of their sources of income and correct income from each source, whether taxable or exempt. Many individuals fail to disclose lower incomes because they believe it is unnecessary. This may get the attention of the IT department. To guarantee proper IT return filing, one must include all forms of income and declare even the revenue that may be excluded from tax.
ITR Must Be Filed by the Deadline
Most tax professionals recommend submitting IT returns on time. Waiting until the deadline may result in mistakes, technical challenges with the web portal, etc. Furthermore, failing to file IT returns by the due period incurs a penalty in the form of late fines. In rare situations, this may result in the disallowance of a deduction or the carrying forward of losses.
Disclose Income from the Previous Employment
When you change jobs during the fiscal year, you often need to disclose your former job’s revenue. If any income from a former work or any other supplemental gig is not disclosed, there will be a difference in your TDS certificate and Form 26AS. The tax department may issue you a tax demand notice requesting you pay any extra tax dues.
Filing your first tax return might be intimidating, but it doesn’t have to be. You may simplify the procedure and prevent frequent blunders by following some easy steps and taking essential considerations. Remember to collect all required papers, choose the appropriate filing status and deductions, utilize dependable software or service, and file on time. If you want assistance, you can also contact an online tax consultant. This will guarantee that you submit your taxes accurately and confidently, allowing you to reap the advantages of being a responsible taxpayer.