Important Things You Need to Know About E-Filling Income Tax

As of August 2019, the number of income tax returns filed online by individuals has soared to about 5.9 Crore. Each year the number of people earning a taxable income has been rising and this year the figure for e-filing income tax return has jumped by almost 20% with respect to the previous year.

With an aim to include a greater number of people under the income tax regime and bring transparency in the same, the Indian Government has been swift in implementing a few changes in the rules and regulations lately.

Why Should You File Your Income Tax?

The Government of India has mandated that every individual earning beyond a certain level has to pay tax based on the income tax slabs, out of which, he/she can claim tax benefits under certain sections of Income Tax Act.  

The benefits of filing your tax return are multi-fold and can be listed as hereunder –

• It shows that you are responsible and take the onus of paying your taxes on time. ITR is a legal document that will help you avail future benefits on various other financial products and services. 

• In case you have availed home loans, you can claim exemptions too. Lenders often ask for the record of your claimed past returns, and with a decent record of the same, they will be more willing to extend their services.

There are several ways you can save tax when you take a home loan. You can avail tax exemption under Section 80C and 24(b).

• Moreover, you can also save extra penalty charges if you do not file your income tax return. ITR filing has been made mandatory by the government; failing which there could be legal complications too.

Things to Consider About E-Filing

There are about 7 different types of e-filing income tax return forms that you need to know before filing your return. These are discussed below –

ITR-1: Any individual earning within Rs. 50 Lakh in a year should file his/her return through this form. Earnings can be through monthly salary, pension, and earned interest or on house property.

ITR-2: An individual or a member from the Hindu Undivided Family (HUF) having income other than from business profit should opt for income tax e-filing through this form.

ITR-3: In case you earn from your business profit on a monthly basis, you can file your ITR with this form.

ITR-4: If an individual earns less than Rs. 50 Lakh from a profession or within Rs. 2 Crore from a business, he is eligible to file this form.

ITR-5: Liability partnerships and associations that have to report their income are eligible for this income tax return form.

ITR-6: Companies registered under various bodies are eligible to file their income tax return using this form.

ITR-7: Universities, political parties and research institutions are eligible to use ITR-7 for filing their income returns.

The most authentic way to download your ITR form is to visit the official website for filing your e-Return. Go to the online portal of the Income Tax Department and search the option under forms downloads. On hovering over, you will receive an income tax returns option.

On clicking the same, you will be redirected to a new webpage where you will be asked to select your desired form for e-filing income tax return. After selecting the form, it will be downloaded in your system. Save it for further reference.

Save Tax Inability With a Home Loan

Home loans enable you to save up to Rs. 1.5 Lakh on the principal under Section 80C and up to Rs. 2 Lakh on the interest paid under Section 24(b).

You can also apply for this financial aid from a reputed financial organization that offers competitive interest rates and suitable repayment options to choose from in order to minimize the burden during repayments.

Filing of income tax returns is critical and mandatory for individuals earning above Rs. 2.5 Lakh. Therefore, make sure you file returns within the last date and make the most of the benefits associated with it.