E-filing of tax returns has grown manifold in the past 6 years. In 2007-8, less than 22 lakh taxpayers filed their returns online. Last year, more than 2.15 crore taxpayers took the online route. The end of the current financial year is still more than 3 months away but e-returns have already crossed the 2 crore mark. The surge is also due to the new rule that requires taxpayers with an annual income of Rs 5 lakh to file their tax return online.
Filing tax returns online is easy. The average taxpayer won't take more than 30-40 minutes to enter all the details and upload the return. It is also very cost-effective. Tax filing portals charge individual taxpayers anything between Rs 200 to Rs 900 for uploading their tax returns. You can also do it for free on the official website of the income tax department.
Calculate your gross taxable income and the tax payable after all deductions and exemptions. Private portals charge a fee because they hand-hold taxpayers through the process. It's easier and ensures that your tax return is error free. Some e-fling companies even verify your return for a small fee. They check if you have entered correct information and alert you when you are going wrong.
Before you file your returns, check whether the tax you paid has been correctly credited to your name. The Form 26AS has details of the tax deducted on behalf of the taxpayer and can be easily checked online. It is even easier if you have a netbanking account with any of the 35 banks that offer this facility.
Otherwise you can go to the official website of the income tax department and click on "View Your Tax Credit". First-time users will have to register but it takes less than 5 minutes before you can log on and view your details.
Common deductions and exemptions Your gross taxable income gets reduced by the following deductions and exemptions.
TAX SAVING INVESTMENTS: Under Sec 80C, up to Rs 1 lakh invested in specified products or spent on certain heads is eligible for deduction. See the table below for a checklist.