FAQs for First-Time Income Tax Return Filers

Every year, taxpayers must file the applicable Income Tax Return (ITR) and provide information about their earnings and taxes paid during the previous financial year to the Income Tax Department. The information included in an ITR must be relevant for a fiscal year from April 1st to March 31st of the following year.

Your earnings may come from various sources, including your salary, business profits, the sale of your home or other assets, dividends, capital gains, interest payments, etc. The Income Tax Department will repay you if you have overpaid your taxes for a particular, fiscal year.

Answers to Important Questions that First-Time Filers Must Have

Here are a few important questions that individuals or organisations ask while filing ITR for the first time.

1. What is Income Tax?

A direct tax levied on your total income earned is called income tax. It represents a percentage of your income levied by the government every financial year. 

The tax paid by individuals covers costs associated with the development of the country’s infrastructure, agriculture, health, and education. The tax amount depends on a taxpayer’s income levels or gains throughout a financial year and is calculated based on his/her tax slab. Generally, the higher your income, the higher your tax percentage.

2. What are the benefits of paying Income Tax?

The manifold benefits of paying income tax are mentioned below:

• Before approving loans or other credit options, financial institutions can ask you to produce your filed ITRs. They may cancel your loan application if you cannot provide it. This is because the income tax return acts as valid income proof. 
• You might also be asked to submit your filed ITRs for VISA applications.
• Filing an ITR creates goodwill between yourself and the government, showcasing that you are a responsible taxpayer. In return, you get the benefit of availing of credit cards with minimal documentation from banks and NBFCs.

3. What is the window to submit ITR?

If you are a salaried employee, your employer will deduct tax at source and remit it to the government on your behalf. If advance tax is due, 90% of it must be paid before March 31st of each fiscal year. Once the fiscal year has ended, you can submit your ITR return.

The ITR filing window typically remains open until July 31st of the applicable assessment year. However, the IT department will send notices if the ITR filing deadline is extended.

4. How to save income tax?

If you are following the old tax regime, you can save income tax in the following ways:

• You can avail yourself of tax deductions of a maximum ₹1.5 lakh under Section 80C by investing in several tax saving schemes like LIC, ELSS, Mutual Funds, etc.
• You can also claim an additional deduction of ₹50,000 above ₹1.5 lakh under Section 80 CCC(1b) by contributing to the National Pension Scheme (NPS) of the Central Government.
• Section 80D provides tax relief on premiums paid to life insurance schemes.
• Section 80G allows tax benefits on donations to well-known trusts and organisations.
• House Rent Allowance is exempt from taxation fully or partly under 10(13A).
•  Section 80E provides tax relief on higher education loans.

If you decide to follow the new tax regime, most deductions and exemptions have been scrapped with modifying income slabs. Still, the few tax deductions that you can avail of under the new tax regime are: 

• Standard Deduction
• Contribution to National Pension Scheme (NPS)
• Contribution to Agniveer Corpus Fund
• VRS proceeds up to ₹5,00,000
• Gratuity received up to ₹20,00,000
• Interest and maturity amount received from PPF and Sukanya Samriddhi Yojana
• Income from Life Insurance and agricultural farming
• Interest received on Post Office Savings Account of up to ₹10,000

5. How to file an income tax return online?

Filing an income tax return is easy. You just need to follow the steps mentioned below.

Step 1: Visit the official website of the Income Tax department and log in with your User ID and password. If you are a first-time user, you must first register yourself by furnishing your PAN and other related details. 

Step 2: After logging in, navigate to the Dashboard. Click on ‘e-file’, then ‘Income Tax Returns’ and ‘File Income Tax Return’. 

Step 3: Select the applicable assessment year and your preferred mode of filing. 

Step 4: Select the taxpayer's status, i.e., whether you are an individual, HUF or Others, and click on ‘Continue’. 

Step 5: Select the ITR form you need to file and the regime you wish to follow, i.e., the old or new tax regime. 

Step 6: Review the pre-filled data under Personal Information. You can also edit or add information wherever applicable. After confirming the information in all sections, click on ‘Proceed’. 

Step 7: If you are liable to pay taxes based on the computation of entered data, you can choose to Pay Now or Pay Later. You might also be eligible for a refund. 

Step 8: After successfully paying tax (if applicable), click ‘Preview Return’. 

Step 9: Select the declaration checkbox, click ‘Proceed to Preview’ and then ‘Proceed to Validation’. 

After completing all these steps, you will get a message indicating a successful electronic filing. The ITR verification acknowledgement form is prepared and available for download.

6. How to get an income tax return copy online?

Following these steps, you can easily download the income tax return copy online.

Step 1: Visit the official website of the Income Tax Department and log in by using your credentials. 

Step 2: Under ‘My Account’, click on View Returns/Forms.

Step 3: Once redirected, enter your PAN details, choose ‘Income Tax Returns’ and click on ‘Submit’. 

Step 4: A new window will open, displaying a list of your filed ITRs and their downloadable ITR-V acknowledgement. 

Step 5: Click on the ITR-V acknowledgement form you want to download. Once the file opens, you can download it as a PDF.

7. What is Form 16?

Employers annually provide Form 16 to their employees who receive salaries. The document includes details regarding an employee's income, tax-saving investments and deductions, and any tax deducted at source (TDS) for the relevant financial year. It is an essential document to submit your income tax returns.

Form 16 has two parts: Part A and Part B. Part A contains details about TDS deduction and Part B contains a breakdown of the total tax paid. The IT department has mandated employers to provide Form 16 to employees who earn more than ₹2.5 lakh annually. 

• What precautions should I take to avoid issues while filing my ITR?

To avoid issues in filing your return and getting your refund, ensure you do the following:
•    Link Aadhaar and PAN.
•    Pre-validate your bank account where you want to receive your refund.
•    Choose the correct ITR before filing it; else filed return will be treated as defective and you will need to file a revised ITR using the correct form.
•    File the return within the specified timelines.
•    Verify your return and you can opt for e-Verification (recommended option – e-Verify Now) is the easiest way to verify your ITR.
•    File the responses for the notices received from the ITD within the specified timelines.

• Is e-Filing and e-Payment the same thing?

No. e-Filing is the process of electronically submitting your Income Tax Return on the e-Filing portal and e-payment is the process of electronically paying tax.

Final Word

By keeping the above things in mind, hopefully, you won’t find it difficult to file ITR alone anymore. You need to check and verify all the details you submit while filing an ITR. You must always file the applicable ITRs and pay your tax on time to avoid heavy penalties imposed by the government of India.