Income tax is one of the most significant forms of revenues for the government. Income tax is levied on individuals on the income they earn. In India, the income tax is levied based on brackets system. Income tax is imposed by the government authorities under their jurisdictions. Most countries mandate their citizens to file their income tax returns on an annual basis.
The revenues generated by the form of income taxes will be utilised by the government to offer better amenities for the public, such as roads and housing. All individuals earning above a certain threshold should mandatorily file their income tax returns in order to stay tax compliant.
Investmenting in certain options/funds, specified by the government, entitles taxpayers for tax deductions. In India, taxpayers can avail tax deductions of up to Rs 1,50,000 per year by investing in options covered under Section 80C of the Income Tax Act, 1961.
What is Income Tax?
In India, all individuals earning an income of over Rs 2,50,000 a year should mandatorily file their income taxes to stay tax compliant. Even if an individual's taxable income is zero, he/she should stile fill their taxes and declare that they have no taxable income. When filing income tax, taxpayers should disclose their income from all sources. It may be from employment, sale of capital assets such as stocks and properties, and other sources.
Who is eligible to pay?
Individuals can file their income taxes during the filing window. It generally opens on 1 April and closes on 31 July, and there may be extensions of one or two months provided. Taxpayers are necessary to have PAN and Aadhaar cards issued by the Income Tax Department and Unique Identification
Authority of India respectively. If taxpayers are not sure of their taxes, then they can avail the services of chartered accountants. Filing taxes correctly is a necessity to stay tax compliant.
A detailed breakdown of the procedure for filing the tax
The general procedure to file income tax on the government website is given below:
- Download the ITR software available on the website for the relevant assessment year based on your ITR type.
- Calculate the returns on the software by uploading information such as income, tax payments, and deductions.
- Click 'Pre-fill' to pre-populate the personal details and tax payments into the form.
- Click 'Calculate' to compute taxes and interest liability. The amount of refund or tax payable will be shown at the bottom.
- Make the payment if tax is payable and repeat the above step so that the tax payable becomes zero.
- Save the data in XML format and upload the same on the website after selecting the appropriate assessment year.
- Click on the 'Submit' button to submit your income tax returns.