Things every Taxpayer must know

As a taxpayer we must be aware of the procedure and the facilities we can avail, while efile Income Tax Return. Paying Income Tax is just not enough, a taxpayer should know the basics of Income Tax, so that they can file their Income Tax without any errors. Here are 5 things which a taxpayer must know before filing ITR: -

What does Financial and Assessment Year mean?

Financial year is the year in which you earn the Income, it starts from 1 April every year and ends on 31st March the following year. Assessment year is the year following the financial year. For e.g. If 2017-18 is the Financial year we are talking about, the relevant Assessment year would be 2018-19.

Income Tax Slabs

There are different income tax rates for different classes of taxpayers. As a taxpayer you must know which tax slab you fall under and what is the rate at which you are supposed to pay your income tax. To know about which Income Tax Slab you belong to, click here

Check Form 26AS to claim TDS

If any tax is deducted you can check it in your Form 16, which your employer provides you. However, for tax deducted on other incomes can be checked in Form 26AS. Other than TDS, Form 26AS also reflects payment of Advance Tax etc.

How to E-Verify your ITR?

E-verifying your ITR is something you cannot afford to ignore. Every year once you file your ITR, you are supposed to E-verify it, as not E-verifying your ITR is as good as not filing your Income Tax Returns. You can E-verify your returns either manually or electronically, by sending the acknowledgement of ITR to CPC Bangalore within 120 days of filing returns.

Income from previous employer

After changing the job taxpayers often forget to give the information of their previous employer to their new employer. In this case tax is deducted on the assumption that income for the remaining months is the only income for the year. However, this poses a problem when such individual files their tax returns after the year-end. As, the incomes from the two employers are added and the deduction and exemption are halved, and tax liability arises on the taxpayer’s part.

Tax Saving Options, Other Than 80C

You must have made appropriate investments to save taxes under Section 80C of Income Tax Act, 1961, but before you make future investments have a look at this piece by All India ITR.

As soon as, the season of filing IT Return arrives, we all get busy in pondering how to save the maximum amount of taxes. Section 80C is certainly a major aid, but there are more ways to save taxes, other than 80C. So, here are a few options you can consider while filing your ITR and filling Form 16 part B and you can use these techniques when you are filing online ITR.

Here’s How you can save taxes, other than 80C

You can claim Tax deductions while filing ITR on your accommodation expenses. If you stay in a rented apartment in one city and have a house property for which you have taken housing loan, you can claim a deduction on the Home Loan interest.

If you have not taken a home loan, then fret not, as you can claim deductions for the premium you pay for your Medical Insurance. If the premium amount goes up to Rs. 25,000 in case of self, spouse or dependent children, then you are eligible for tax deductions and this limit exceeds to Rs. 30,000 in case of Senior Citizen parents.

You can also get deductions if you are paying the interest on Educational Loan for the higher education of the self, spouse or dependent children. Deductions can be claimed till eight years or till the loan is paid, whichever is less.

Other than these situations, if an individual has made any kind of donations to an organization/ fund, then he/she can claim deductions up to 50% to 100%, while filing ITR, depending on the type of organization/ Fund.

An individual can also save taxes up to Rs. 50,000 by making a contribution towards National Pension Scheme. That’s how you can save taxes other than 80C. You can find more information on topics like e filing, refund status, income tax calculator, income tax refund, etc. on our blog.

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