Things to know Before Filing Income Tax Returns

Come July 31, and you will be running from pillar to post to file your income tax returns. Let’s take you through a few pointers before you start.

What is filing tax returns?

Tax Filing is a process, wherein a person declares to the government their income and taxes accordingly paid by them. It is akin to taking clearance from your organisation or college on the last day of your work or education.

Who has to file Income tax Return?

A person whose taxable income exceeds INR 2.50 lakhs in a financial year needs to file for returns.

Does having a PAN (Permanent Account Number)  mean no need for filing returns?

PAN is just a document that you have to provide while you file for returns. It does not mean you are exempt from filing returns. Everything boils down to your income.

The benefits of filing income tax returns (ITR)

For availing loans, visa and immigration processing, as an income proof, claiming excess tax paid via refund, applying for a higher insurance cover
Even though, your employer deducts a certain tax from your salary, you still have to file for a return if your income exceeds basic exemption limit. You also claim benefits by filling your investment details, and refund claims.

Different salary heads

Before filing income-tax returns, you have to ensure you know the different heads under which your income comes. Unless you know the various sources of income, you will not be able to file your taxes accordingly. Your different sources of income could be in the form of your salary, rental income from any property, any business profit or capital gains from shares etc. You have to add all the incomes under various heads and then compute your taxes.

Important documents for filing I-T returns

Form No.16: Issued by your employer

Form no 16A: Issued by all the payers who have deducted tax while making payment to you during the year.

A/C statements: All your operating accounts during the year.

Property details: Any property bought or rented out an existing property -- you will need receipts of rent paid as well as taxes. You will also have to submit copy of loan certificates, if the property is purchased through a loan.

Contract Notes: For sale & purchase of shares during a financial year

Tax Challans: Details of tax payments made during the year if you have made an advance payment.

Hope these pointers will help you understand how you need to file your returns. For more, you can log onto HDFC Life’s online website and take the help of a financial advisor.

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Things to know before filing income tax returns