You can file your returns with minimal hassles even if it’s your first time. Read on to find out how.
If you have just landed a job and are completely new to the concept of income tax, you are likely to dread the process of filing returns. However, it will not find it as tedious as it is made out to be if you follow a few steps. The process can be completed online after downloading the relevant ITR forms from incometaxindiaefiling.gov.in and entering the information asked for. Since salary is likely to be the only source of income for those who have just started earning, the form applicable will be ITR-1 (for individuals with salary and interest income), also called SAHAJ. The advent of e-verification has done away with the need to download the ITR-V (acknowledgement) form and send it to the income tax department’s Bengaluru centre, making e-filing a completely paperless process. If you still feel the task is daunting, you can use the service of private return filing portals like H&R Block.
Here are few points you need to bear in mind before while preparing to file tax returns:
If you are a fresher who lives with her parents, you can claim the same tax relief on House Rent Allowance (HRA) that is available to those stay in rented apartments, if you can pay some rent to your parents – a fact that your HR department is unlikely to brief you about. Generally, HRA constitutes nearly 50% of an employee’s basic salary. This HRA can fetch you some tax benefits, subject to conditions. That is, it will be limited to the lower of: actual HRA, actual rent paid or 50% (if you are based in a metro city) of the basic salary.
Leave Travel Allowance (LTA) benefit is part of employees’ pay package, meant to be claimed when they travel during holidays. It offers tax benefits too, but they come with certain restrictions. For instance, you avail of tax benefits on LTA only twice in a block of four calendar years (the current block runs from 2014-17). This apart, there are rules on mode of travel, destination, kind of leave taken and family members whose travel expenses can be included in the overall benefit. If you haven’t already, make sure you file a claim before March 31.
Typically, human resources or finance departments of most organisations start handing out Form 16, which contains particulars of your taxable salary, tax benefits claimed by you and taxes deducted during the year, by late-April or May. In other words, it contains almost all the details you require while filing your returns. Do not postpone downloading or collecting it from the departments concerned. The sooner you obtain it, the better it is. You will have more time to go through the details and file returns well in time. Remember, the July 31 is the due date for filing tax returns.
You need your bank account statements to know interest earned on savings account and fixed deposits as your Form 16 is unlikely to include the details. While fixed deposit interest will attract tax slab rate applicable to you, interest on savings account up to Rs. 10,000 is exempt from tax under section 10TTA. Going through your bank account statements will also help you identify donations made during the year that you might have forgotten. If they are eligible for deduction under section 80G, you will need to retain proofs and furnish all details – like name and PAN of the charitable organisation – in the section provided. Since most organisations do not make space for tax breaks on such donations in their investment declaration formats, you will have to claim a refund during the return filing process.
If you haven’t claimed deductions under section 80C of up to Rs. 1.5 lakh on investments, you can do so until March 31. If you fall in the tax bracket, your employer would have already deducted applicable taxes at the time of crediting your salary. In that case, you can still make investments and claim proportionate refund while filing tax returns.