Income tax Guide for Beginners

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When you plan to file taxes for the first time, you need a guide that gives you complete information about how to file taxes and what documents are required for it, all this information you can get through this blog.

What is Income Tax?

Income tax refers to the tax imposed on the income earned by an individual or business in a financial year. It is mandatory for all taxpayers to file their returns before the due date. When you pay tax, you have to provide information about your income source. You can file your income tax online or offline on the official website of Income Tax Department.

Who can file Income Tax Return?

Individuals

Hindu Undivided Family (HUF)

Association of Persons (AOP)

Companies

Firms

Trusts

How to file income Tax Return?

Follow the steps below to file Income Tax Return

Step 1 : Go to the Income Tax Department's e-filing website.

Step 2 : If you are a new user then register first. If you are an existing user, log in with your user ID and password.

Step 3 : After successful login, on the dashboard, click on 'e-File' > 'Income Tax Return' > 'File Income Tax Return'.

Step 4 : Choose the assessment year for which you want to file and click "Continue".

Step 5 : Select the method of filing your ITR return and choose the "Online" option.

Step 6 : Choose your status, such as individual, HUF, or others.

Step 8 : Choose the appropriate ITR form based on your income.

Step 9 : Now, select the reason for filing your ITR return.

Step 10 : Enter your bank account details, ensuring that the information provided is accurate and valid.

Step 11 : A page will open displaying your already-entered information. Review and verify your details.

Step 12 : Verify your ITR return within 30 days.

Note : You can also file your ITR return through the Web Online CA platform.

Financial Year?

Financial year refers to a twelve-month period used for financial reporting and tax purposes. It usually runs from April 1 to March 31 of the following year. For example, financial year 2023-24 will run from April 1, 2023, to March 31, 2024.

Assessment Year?

Assessment year is the year following the financial year in which income is assessed and taxed. It is the year in which taxpayers file their income tax returns based on the income earned during the previous financial year. For example, the assessment year for financial year 2023-24 will be 2024-25.

Documents required for filing Income Tax Return

Below mentioned documents are required for filing income tax return

Aadhar Card

Pan Card

Bank Statements

Salary Slips

Form-16

Form 26AS

TDS Certificate

Form-16A/ Form-16B/ Form-16C

Benefits of ITR filing

Income Proof : Income proof is important for individuals, and Income Tax Return (ITR) serves as a comprehensive document detailing your annual income.

Visa Application : When you apply for a visa, many countries mandate that visa applicants submit copies of their income tax returns as part of the documentation process. Submitting income tax returns can simplify your visa application process.

Easy Loan Approval : ITR plays an important role in loan approval. When seeking a loan from a bank or financial institution, they often request a copy of your income tax return as proof of your income. Income tax returns can be important in facilitating loan approval.

Avoid Penalty : Filing income tax returns on time can help individuals avoid penalties imposed by the Income Tax Department. Filing income tax returns on time can also provide peace of mind to individuals.