Income tax is a necessary sin. Every earning individual, resident or non-resident, has an obligation to pay the taxes annually. However, there are specific ways to fill out your income tax forms for it to be accepted by the authorities. In case, it is filled incorrectly, the income tax department has every right to cancel it or reject it.
It is All Digital Now! Fill You Income Tax Returns Online
Gone are the days when you had to fill out the ITR forms manually. With India treading a path of digitization, every process has gone online. With easier to follow procedures, step by step techniques, the income tax filing process is simpler than ever. Automation of the entire ordeal saves time and effort of having to run from pillar to post and saves the time of the government officials too. An e-verification process has now made visiting the post offices redundant too.
Know Your Income Tax Form. Wrong ITR Can Be Rejected.
Income tax forms have been confusing ever since there has been a segregation of the entire business scenario. Be it for an individual, Hindu Undivided Family or a company, income tax forms are separated for each one of them. Depending on the tax eligibility, Income Tax Forms vary in multiple ways. Let’s find out which one income tax form is the best for you!
1) ITR 1:
This form is best suited for people who have their source of income listed as salary or pension. Whether you are a full-time employee or a retired person, any savings of income earned from the interest, are covered under this form. However, if your income exceeds 50 lakhs, you cannot claim your returns under this form.
2) ITR 2:
This form is deemed the best for Hindu Undivided Families, and individuals who have their salaries declared other than those from the ones mentioned in the ITR form 1. Every income from other sources, even if not from profits, need to be declared under ITR 2.
3) ITR 3:
Again, used by HUFs who have business declared as a partnership. Incomes from profits, gains from the partnership is filled under this form. However, the income from the salary, commission, interest, bonus, and benefits, needs to be declared under other forms.
4) ITR 4:
Firms that have businesses listed under proprietorship need to declare their incomes under ITR 4. An absolute form for declaring the returns, this form is more beneficial in several ways.
5) ITR 4s:
HUFs and presumptive business can use this particular form to file their returns when the deadline comes out in March. However, this form has been discountinued.
6) ITR 5:
Limited Liability Partnership or body of individuals or any Association of persons identified by the Income tax department and the ones with allocated PAN cards under the former classification can use ITR 5 make use of this form to file their income tax returns. The source of income can be anything other than those mentioned specifically for ITR1 or those of the HUFs.
7) ITR 6:
There are several companies that claim their returns through section 11. Section 11 is meant for firms who claim income through charity or religious purposes. However, these bodies can claim returns under this form.
8) ITR 7:
Every other firm which is not covered under the above-mentioned list can make use of the final form type to claim returns. People or organisations who claim income under section 139(4A), Section 139(4B), section 139(4C), Section 139(4D) need to make use of this form for all returns purpose. This form is mandatory to be filled by several colleges, educational institutions research agencies, and even by hospitals.
Did You Fulfil All the Pre-Requisites?
To claim the income tax returns you need to fulfil a couple of pre-requisites. Salaried individuals need to include a Form 16 whereas Form 26AS is meant for a consolidated annual tax statement. Ensure that you claim tax deductions under several other sections mentioned and allowed under the different sections of the Income Tax Act.
Where Should You Invest for Tax Exemptions?
Most of the tax deductions are counted under Section 80 C. Whether it is a public provident fund, an Equity Linked Savings Scheme, Life Insurance Schemes, Employee Provident Scheme, Fixed Deposits, so on and so forth, the tax deductions play an important role. Claim that House rent allowance too. However, do not pick out an investment because it is non taxable during withdrawal. The investment should always focus on maximizing your returns and creating wealth instead of just saving that extra TDS.
You could make use of several portals that direct you to fill and file your income tax returns at the end of the year. Not only do you get specific recommendations to fill out the right forms, but also get the prerogative to pick out the options which can help you a lot of tax too. After all, when the account is credited at the end of three months after tax filing, it always feels good!