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When you start earning money, remember that some part of such money belongs to the government. In simple words, you will have to pay taxes and file Income Tax Return. Some times first-time ITR filers face a little difficulty as they are unaware of certain essential and basic information. So in order to make your ITR filing process smooth, we have compiled some essential information for first-time ITR filer.
An ITR is a yearly statement that provides your income and tax payment during the year to the income tax department. It is necessary for individuals earning a specific amount to file ITR. Through this process, the taxpayer reports of his total income earned in a financial year. The income tax department has notified various forms such as ITR-1, ITR-2, ITR-3, ITR-4 etc.
Due date of ITR filing
Firstly you should be aware, as a first-time ITR filer, of the due date of filing income tax return. An individual who earns income from salary or is self-employed is required to file ITR before July 31st every year. For the financial year 2020-21which means from April 1, 2020, to March 31, 2021, the government extended the due date of ITR filing to 30th September 2021.
Income Tax Slabs
The government had introduced new tax regime where taxpayers can make tax payment at concessional rates after relinquishing major exemptions and deductions.
Let’s look at the old tax slab and the new tax slab, which was introduced in FY 2021-22.
The senior citizens and super senior citizens had the benefit of higher basic exemption of 3 lakh and 5 lakh rupees, respectively, under the old tax regime.
You would be liable to pay 4% health and education cess on the income tax amount and the surcharge, if applicable, while calculating tax under any tax regime. In case where your taxable income is less than 5 lakh rupees, then you are eligible for tax rebate as per Section 87A of up to 12500 rupees, and there is no tax liability under both tax regime.
Please note that taxpayers who opt for the new tax regime in the FY 2020-21 are required to submit Form 10IE[1] to the Income Tax Department. Therefore the taxpayer is required to compute tax liability as per the tax regime they opt.
Get basic information
Filing ITR requires submitting your basic details. Hence you are required to provide PAN, Aadhaar Number and bank account details.
Get Documents related to Income sources
You will be required to provide sources of income in your income tax return. Hence collect all documents related to your sources of income such as Form 16 and Form 16A, bank passbook/account statement, capital gains statement for the sale of shares/mutual funds and other income receipts. In case where your income is exempted from tax payment, then declare it under the exempt section of income of the ITR.
Investment Documents
One can claim deduction from their gross total income for certain investments or expenses incurred during the financial year. Such deduction can be for investment in Insurance premium, donations, National Pension Schemes etc. One can claim deductions under Chapter VI A deductions and can collect all related receipts and documents and ensure its availability at the time of filing ITR.
Earlier, we had told you to collect all documents related to your sources of income, such as Form 16 and Form 16A. Therefore here we will know basic details about these forms.
Form 16-
It is a TDS certificate of tax deducted during the year by the employer. It comprises of the salary break-up like allowances, deductions etc. It is a vital form for salaried individuals as they need it while filing ITRs.
Form 16A-
It is a TDS certificate which is issued for tax deducted on incomes apart from salary. For instance- banks issue this form to their customers for tax deducted on interest payments on deposits during the year. It is issued for tax deducted on different incomes.
Form 26 AS-
It is a statement that contains details regarding the tax paid by or on behalf of the taxpayer during a financial year. The deductor deducts TDS and provides such details in the TDS return to the income tax department providing the deductee’s PAN. Such information shall reflect on the Form 26AS of the PAN therefore, you are advised to check the details of Form 16 and Form 16A with Form 26 AS. You may notify in case of any mismatch.
From the above pointers, it can be said that ITR filing can be done without any hassle if you have the basic information. If you are a first-time ITR filer, then all these details will help you to file ITR easily.
Read our article:Filing Income Tax Return? :Points to note for Individual Taxpayers
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