Introduction
Hello there, salaried taxpayers! 🙋♂️🙋♀️ Navigating the world of income tax can seem like a daunting task, but don’t worry, we’ve got you covered. This comprehensive FAQ guide is designed to simplify the process of income tax filing for the Financial Year (F.Y.) 2022-23. Let’s dive in! 💼📝
What are the basic income-tax terms?
- Income Tax: It’s the tax you pay to the government based on your income. 💰
- Financial Year (F.Y.): The year in which you earn an income. In India, it starts on April 1 and ends on March 31 of the next year. The income tax return for F.Y. 2022-23 needs to be filed latest by July 31st 2023.📅
- Assessment Year (A.Y.): The year following the F.Y. in which your income is assessed and taxed. The current assessment year is 2023-24. 🧾
- Income Tax Return (ITR): It’s a form where taxpayers declare their taxable income, deductions, and tax payments. 📄
If your total income is in excess of the exemption limit i.e. ₹2,50,000 in a given financial year, you must file your income tax return.
Which ITR form should I file?
- ITR-1 (Sahaj): For individuals with income up to ₹50 lakh from salary, one house property, and other sources like interest income. 🏠💼
- ITR-2: For individuals and HUFs not having income from profits and gains of business or profession. 🏢
- ITR-3: For individuals and HUFs having income from profits and gains of business or profession. 🏭
- ITR-4 (Sugam): For presumptive income from business & profession under Sections 44AD/ADA/AE. 📈
Non-residents can only file ITR-2 or ITR-3, depending on their income sources. 🌍
Use this wizard on the IT portal to find out the qualifying conditions for ITR forms.
What are the different heads of income?
- Salary: Income received from your employer. 💼
- House Property: Income from house/flat that you own. 🏠
- Profits and Gains from Business or Profession: Income from your business or profession. 🏭
- Capital Gains: Income from the sale of a capital asset. This can be financial assets such as mutual fund investments or a non-financial asset such as real-estate.📈
- Other Sources: Income from sources like interest on bank deposits, lottery winnings, etc. Family pension received by surviving spouse will also come under this head of income. 💰
You can download your Annual Information Statement (AIS) after logging in to the IT portal and it will show interest received, rent received, purchase and sale of securities,etc.
Step-by-Step Guide to Income tax filing
- Collect Necessary Documents: Gather your Form 16, bank statements, and proof of investments. 📂
- Choose the Right ITR Form: Based on your income sources, select the appropriate ITR form. 📄
- Fill in the Details: Enter your personal information, income details, and claim deductions. 🖊️
- Choose your income-tax regime: Budget 2023 provided tax exemptions to those opting for the new tax regime in the form of enhanced tax slabs. Use this online calculator to estimate your tax in the two regimes.
- Verify Your Return: After filling in all the details, verify your return using Aadhaar OTP, EVC, or by sending a signed copy of ITR-V to CPC, Bangalore. ✅
- E-File Your Return: Submit your ITR on the e-filing website of the Income Tax Department. 🌐
You can file your taxes online using the official Income-Tax portal or using the services of an online tax-filer such as Cleartax, Taxspanner, etc.
If your taxes are complicated, use the services of a local tax advisor or a CA.
This post on Freefincal details the ITR filing process.
What are the common taxation concerns?
- Tax Deductions: You can reduce your taxable income by investing in tax-saving instruments like ELSS, PPF, NPS, etc. under sections 80C, 80D, 80E, etc. 💰
- Income tax regimes: If you are a salaried employee, you can change the applicable income tax regime every year.
- TDS: Tax Deducted at Source (TDS) is the amount deducted from your income by the payer before making payment to you. Check your 26AS form after logging in to the incometax portal and accessing the Form 26AS option in the dropdown menu under the e-file tab. 🧾
- Advance Tax: If your total tax liability exceeds ₹10,000 in a financial year, you’re required to pay advance tax. Non-payment of advance tax will require you to pay simple interest of 1% per month on the applicable portion of tax that was not paid as per advance tax due dates. 📈
- Tax Notice: If there’s any discrepancy in your ITR, you may receive a notice from the Income Tax Department. Don’t panic, consult a tax expert. 📮
Conclusion
Income tax filing doesn’t have to be a headache. With a clear understanding of the process and your obligations, you can easily file your ITR. Remember, timely and accurate filing can save you from penalties and notices. Happy filing! 🎉
