Taxes levied by the government on the annual income or profits earned by individuals and businesses are called income taxes. An essential instrument of revenue collection, these taxes are an integral part of national policy and play a vital role in the redistribution of wealth among the population.
Under the income tax act of 1961, all taxpayers are liable to file their income tax returns annually. The year under the law for calculating the tax starts from 1st April and ends on 31st March of the following calendar year.
The income tax filed by an individual or a business is generally subject to a tax slab rate decided by the finance minister of India during the union budget.
Things to keep in mind while filling the ITR online
While many factors must be considered while one plans to file ITR online, some of the important ones required to be remembered to file an error-free return are as follows.
- Holding Foreign Assets or Income: all Indian citizens holding foreign assets or accruing income outside India are liable to disclose the above while filing their IT return. Failure to disclose such assets will result in black money implications and is punishable under the Income Tax act.
- Global Employees: Global mobile employees must correctly identify their correct residential status to file their Income Tax.
- Correct Form and Computation of Income: An individual must choose the correct ITR form based on the correct calculation of all incomes of an individual. One must calculate the correct deductions and exemptions that apply to them if any.
- Disclosure of all the specified assets should be made if an individual’s income exceeds 50 lacs annually.
- The Annual Information Statement and the Tax Information Summary need to be reconciled so that all transactions, incomes, and taxes are consolidated into one statement.
- All bank account details need to be disclosed.
- Carry forward losses need to be mentioned in the right places correctly.
- New vs. Old Tax Regime: A new optional tax regime was introduced by the government in 2020, hence giving the taxpayers the option to choose from two tax regimes.
- If an individual has no income or a low limit, they still might be required to file their IT return if specific criteria are fulfilled.
- It is advisable to stick to the dates while he/she files ITR online. This year the last date to file ITR was 31st July. Beyond that, the ITR filed is belated ITR and may have a penal interest applicable to it.
- Proof of Verification: Keeping an online or offline verification message regarding filing your ITR after it has been processed is essential.
In conclusion, it is not just essential but mandatory to know some of these points while ensuring timely filing of the Income Tax Return. Therefore, these tips above should be kept in mind and carefully followed while one file ITR online.