5 smart things to know about Income Tax Return in India
January, 24th 2024
ITR Filing: Filing income tax returns is a process where individuals and entities report their income, deductions, and tax liabilities to the government. The process offers numerous benefits as well. For instance, if the tax gets deducted from someone's income despite their total taxable income being below the exemption limit, the person can claim a refund by filing the ITR.
Besides, filing ITR on time helps in maintaining the credit score, further aiding in easy approval for loans and credit cards. ITR documents can also be used during Visa applications for certain countries to show a clear financial history. Additionally, it helps maintain transparency in financial transactions between citizens and the government.
Here are the top 5 smart things to know about ITR in India
It is important to understand taxable limits and compare them with the total income. If the total income exceeds the exemption limit, then only the ITR procedure needs to be followed. The exception, however, remains in cases where tax is charged on the income despite being below the exemption limits, requiring people to file the ITR to claim a refund.
It is also important to understand the deadline for filing the ITR. Filing the ITR on time helps in avoiding penalties or interest levied on any outstanding tax liabilities. The due date for filing ITR in India is usually July 31. You may visit the official website of Income Tax India to check the details.
Types of ITR Forms
There are multiple types of ITR forms to cater to different sources of income. Therefore, it becomes pertinent for people to select the suitable form based on the source of income.
Deductions and Exemptions
Several exemptions are provided under different provisions, such as exemptions under section 80C, 80D, etc. Having a better understanding of these exemptions helps minimize the taxable amount and optimize tax liability.
In India, it has become mandatory to link PAN details with the Aadhar Card for filing income tax returns. Therefore, it is crucial to get these two documents linked to avoid any complications.