An Income Tax Return (ITR) is the best document of proof of income, It is mandatory for anybody earning an annual income of more than Rs. 2, 50,000 to file an ITR. The last date for filing an income tax return is on 31st July. Taxes and returns are a critical part of responsible financial management, and, hence, it is important to file a tax return before the due date.
ITR is beneficiary in many ways like you will be eligible for a loan, depending on you IRT of last 3 years you will get a loan and moreover filing an ITR legalizes one’s money, Even though it is not compulsory to file a return if the total income is below taxable limit.
Income Tax norms have been tightened over the last few years. With the linking of Aadhaar to PAN, and with deadlines getting stricter, it’s important to follow due processes and file one’s income tax returns on time. In case of not having an ITR can also lead to the chances of not getting a visa to travel abroad, it is best to file the return timely to avoid tax troubles.
Now here’s how to avoid any errors:
1. One must do tax planning from the beginning of the financial year to grow wealth as well as save taxes averting last-minute lapses.
2. The first thing to be cautious about is selecting the correct ITR form and assessment year. Avoid last-minute filing since the hurry could cause lapses. Filling in personal details correctly is imperative and these should match those on the PAN.
3. Mention the correct bank account number and IFSC, it will ensure smoother ITR processing.
4. To avoid tax trouble, Declare the income earned from various investments.
5. In case of a job change within the financial year, do not forget to mention the earnings from your previous job
6. Once an ITR is filed online, it needs to be e-verified either through Aadhaar authentication or by sending a signed acknowledgement copy to the IT Office.
7. Tax saving tools: Multiple tools can be used to save income tax every year. For those living away from home, the rent receipt is your biggest tax saver since part of house rent is tax exempt.