Tuesday, September 20, 2016

E-Filing IT Returns

These last few years with the introduction of Aadhar and computerization of many government departments a lot of government related activities can be done online. As a law abiding common citizen you generally use at least following facilities: Property tax payment, electricity bill payment, Income Tax filing, police verification requests etc. 
Out of these income tax filing was considered difficult and needing special accountants who made sense of various clauses and provided you with an optimized strategy for saving tax. But these days the various clauses are also cleaned up and made easy to understand, so with e-filing of income tax returns the whole tax paying and return-requesting process has become quite easy. 
The income tax cycle for most salaried employees is as follows: You declare a investment declaration at start of your to your organization. Based on that declaration they calculate your tax for year and cut it from your monthly salary. This is Tax deducted at source(TDS). In Dec-Jan your organization asks for your actual investment proofs. Based off them your actual tax is calculated and remaining tax is again deducted from Jan/Feb/Mar salary. After this the financial year is closed. You get form 16 for this year in May(generally). That form 16 contains the whole picture of your total income, deductibles and actual tax you had to pay. Now if your income is greater than 5Lac or if you have paid some extra tax(maybe because you showed less investments but there was room for more and you went for it etc), then you need to file income tax returns.
Using efiling website incometaxindiaefiling.gov.in  you can file the returns. All you need for this is your form 16 for the respective year. The form 16 contains all the figures that you need to fill in the online form. Then you add your bank account details to it. And then you submit it. It takes 2-3 months for this to get processed. And then you get a Return certificate. 
Why ITR is important?
Your tax payment is connected to your CIBIL score. This score is used by banks to check your credibility and accordingly your loan/credit card etc requests are processed. 

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