What are Income Tax Returns, and How to File Them?

The government collects various types of taxes from individuals and businesses for the country’s development and welfare. Of all these taxes, the Income Tax is the most common and probably the most important.

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What is Income Tax Return?

When you file your Income Tax Return you validate that you have paid your income tax. If you have paid more tax that required then you can also get the balance as a refund. On the other hand, not filing ITR can attract penalties and even a legal action.

How to File ITR?

You have to pay income tax on not just your salary but also on the additional incomes that you may be receiving such as income from a rented property, businesses, etc. So, you have to combine all the sources of incomes and then calculate the actual applicable tax. You also need to minus the TDS already deducted from your net income. Thus:

Tax Payable = Total Taxable Income – TDS already Deducted

You need to fill and file an income tax form that’s applicable to you. For instance, theITR-1 form is for the salaried individuals, theITR-2 form is for the individuals earning income from sources other than a business or profession, etc.

You can easily file ITR online by following these steps:

1. Register yourself on the Income Tax portal incometaxindiaefiling.gov.in
2. Select the appropriate forms
3. Arrange the documents that you will need to provide, such as PAN, TDS certificates, etc.
4. Fill and upload the ITR form
5. An acknowledgment number will be generated which you must keep safe with yourself.
6. That’s it!

Filing Income Tax Returns is extremely important. Even if you have skipped filing your ITR to this point, you can still start now.