Income Tax Filing
Definition of 'Tax Return'
- The tax form or forms used to file income taxes with the Internal Revenue Service (IRS). Tax returns often are set up in a worksheet format, where the income figures used to calculate the tax liability are written into the documents themselves. Tax returns must be filed every year for an individual or business that received income during the year, whether through regular income (wages), interest, dividends, capital gains, or other profits.
- . A return of excess taxes paid during a given tax year; this is more accurately known as a "tax refund".
- Every tax payer is required to declare to the Income tax Department in the Government of India, at the end of a financial year, in a form prescribed by the Government, summary of incomes which he earned during the year ended on 31st March.
While it is true that one might have paid all due tax on his salary earnings, it is possible and highly probable that he has other incomes like interest on savings bank, dividends from companies, cash incomes from part time work or other varied sources like rent, fees, royalties on which no tax has been deducted or, if deducted, only on a portion/part.
The Government collects this statement in the form of a Tax Return in one of the eight forms prescribed.
This statement duly signed and affirmed by the individual as it being a complete and true statement of his income during the previous financial year is called RETURN OF INCOME. (Income Tax Return).
It is Mandatory for all individuals having income from last financial year more than 1.6 lacs has to File income tax returns. We are come up with simple solution of Filing income tax returns easily.
Importance of Filing Income Tax returns.
There is a misconception among some salaried individuals that because the employer has deduced tax at source, they are not required to file tax returns. Even though tax has been deduced and there is no other source of income, or liability to pay tax, employees have to file income tax returns. Every individual has to necessarily file the income-tax returns if the total income, before allowing any deduction, exceeds the exemption limit.
Even if your income is below the exemption limit, which is bound to happen at the beginning of one's career, filing income tax returns will help in the documentation process if you are taking a loan or an insurance policy or when you are applying for a visa.
Best Practices Filing Income Tax returns
- Disclose Income from tax free dividend received on mutual funds, Long term capital gains on stocks sold in stock market,
- Disclose all transactions / Investments comes under Annual Information Return. ( Cash Deposits totaling more than ten lacs, Payment credit aggregating more than two lacs, Payment to mutual funds to aggregating two lacs ,Payment to Buy bonds or debentures aggregating five lacs, Payment to buy shares more than one lac, Purchasing a property having value more than 30 lacs, Payment to buy RBI bonds aggregating five lacs ).
- Include all dependent family members Income in section Specified persons income (SPI).
- If you have refund from income tax department enter cross check bank account no and MICR Code.
