Basics of income tax for beginners

All about ITR filing for BEGINNERS!

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Novice to Income tax! Don’t know how to file an Income Tax Return form. Does Income Tax stress you to such an extent? Try not to stress. It is not an advanced science to get it. You should simply to soak in a couple of essentials of Income Tax to get things clear. Let’s get a deep dive into it.

Before starting, let’s get a brief idea about the Income tax. Income tax is basically imposed by government of India on people who are earning income. This assessment is imposed based on an Act called Income duty Act (IT Act) which was passed by the Parliament of India in 1961. Finance minister also make changes in the rates of income tax every year so we should keep our eye on budget or at least on the income tax rates which are going to help us while online income tax return filing.

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When you are Eligible for Online Income Tax Return filing:

For filing income tax return, there are some taxable slabs are set by the government. From those set of instructions you can easily get the idea for filing an income tax return.As per the financial year 2019-20, Income tax slabs and rates are as mentioned below

Income Tax SlabTax needs to pay
Up to 2,50,000Nil
2,50,001 to 5,00,0005%
5,00,001 to 10,00,00012,500 + 20% of total income exceeding 5,00,000
Above 10,00,0001,12,500 + 30% of total income exceeding 10,00,000

Rates mentioned above does not include Surcharge and Cess.

o    10% surcharge is applicable on income tax in case income exceeds  50 lacs but upto  1 crore

o    15% surcharge is applicable on income tax in case income exceeds  1 crore

o    4% Health & Education Cess is applicable on the income tax and applicable surcharge.

Tax rates and slabs are same for Male and Female

According to the latest budget plan 2019, Individual citizens having assessable yearly salary up to Rs.5 lakh will get full duty rebate u/s 87A and along these lines won’t be required to pay a single penny from our pockets. Anyway Income charge Slabs and Rates will stay unaltered for the FY2019-20.

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What is the assessment year for online Income Tax Return Filing?

As indicated by Indian norms, the financial year (charge year) begins on the 1st of April consistently and closes on the 31st March of the next year. It doesn’t make a difference when you’d begin your employment /job, the budgetary year or the assessment year would close on the 31st of March, each year.

For more clarification, let’s suppose

Working months – 1st January, 2017 to 31st March, 2017

Tax Year – 2016-2017

Assessment Year – 2017-2018.

Please note that ITR Due Date is going to be remain same i.e. 31st of July every year (for the assessment year).

Tax exemptions while applying for Income tax return form

Expense exceptions are capital deductions that can diminish your taxability. These reductions make sure that expense is related just on specific parts of your pay. On the off chance that you pay the lease of your home, you can benefit of an exception on your House Rent Allowance that is determined according to your compensation.

In monetary exclusions, try to use section 80C to 80U. These will help out to reduce taxable income and increase your savings. Under section 80, we have PPF, LIC, Fixed deposits, and Mutual funds while applying Online Income Tax Return Filing

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How to file an Income tax return form

❏  Open the link https://www.incometaxindiaefiling.gov.in/home, register yourself here. 

❏  Fill all the details as per the given form.

❏  Collect your form 16 from HR/ finance dept. Form 16 is basically a TDS document. Where all the income details has been mentioned.

❏  Documents like salary slips, or account details, and other documents for tax exemptions should be with you.

❏  Download form 26A from the portal. .

❏  Compute your total income and recheck if there is any error.

❏  Check your tax liability and calculate your actual taxable payment.

❏  Last step is e-verification of ITR filing. That can be done either by sending a hard copy to the income tax office or uploading online to the portal with digital signatures.

FAQ related to income tax return.

What is ITR?

ITR represents Income Tax Return. It is a recommended structure through which the points of interest of salary earned by an individual in a monetary year and duties paid on such pay are conveyed to the Income-charge Department. It likewise permits convey – forward of misfortune and guarantee discount from personal expense department.Different types of income of salary are recommended for recording of profits for various Status and Nature of pay. These structures can be downloaded from www.incometaxindia.gov.in. For more information you can also visit our blog Basics of Income Tax Return Filing for Beginners

What are the ways to file an income tax return?

You can file an income tax return in any form like mentioned below

1.  You can submit hardcopy to the income tax office

2.  Online method with digital signatures

3.  Either can use online method with the EVC method (electronic verification code)

4.  Or can fill the form online and then submit the verification of return in ITR-V

Note:

When you are applying with the 4th method where you are not applying digital signature, you should take two printed copies of ITR-V form. One of them should be signed by who is paying the tax (taxpayer), sent it to through either normal post or speed post within 120 days to the income tax office address. 

If you don’t want to commit mistakes while filing an income tax return, please visit below mentioned link https://blog.caonweb.com/mistakes-to-avoid-while-filing-income-tax-return/

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How can I pay the tax according to my income?

Tax amount will be calculated on the basis of income earned in the previous year. Procedure of accumulation of duties, Income -charge Act arrangements for instalment of assessments ahead or can say before the culmination of earlier years. It is otherwise called Pay as your gain concept. 

Duties are gathered by the government through the accompanying methods like instalment by the citizens into different assigned banks, for example, Advance duty, Self-Assessment charge, and so on.

For more information related to Income tax slabs, you can also visit to https://blog.caonweb.com/know-about-your-income-tax-return-and-income-tax-slabs-income-tax-rates-for-fy-2018-19/

caonwebteam

The CAONWEB Team comprises qualified chartered accountants and experienced investment experts who are passionate enough about finances to bring you the best advice and tips on everything related to your hard-earned money.