Income Tax E-Filing Tips for First Time Taxpayers

Income Tax E-Filing Tips for First Time Taxpayers

Every year many taxpayers file their income tax return for the first time wherein many of them dread the complex process of tax calculation and filing. The online income tax filing process is much easier than physical filing process as it does not require manual calculations. For those who file their return for the first time, online process will be easier as all they need to do is enter the required information. With many income tax e-filing websites, the technology used auto-identifies the applicable ITR form on the basis of the information submitted.

ITR-1 Sahaj, in most cases, is the form to be filled by salaried, first-time taxpayers without any other source of income. On completion of the online tax filing process, an acknowledgment form ITR-V will be auto generated. This form needs to be downloaded, signed and sent to the CPC office in Bangaluru.

While filing income tax return online, you need to keep these essential documents and information ready:

  • Form 16
  • PAN card
  • Aadhaar Card
  • Bank Statements
  • Form 26AS

Other important things to remember during income tax e-filing:

  • Collect your Form 16 earlier:

Most employers hand out Form 16 by 31st of May, which is essential for income tax filing as it contains all the information including salary, tax benefits and tax deducted in the financial year. Earlier you collect Form 16 from your employer or organisation’s HR department, more time you get to go through all the details and understand them.

  • Get ready to claim HRA benefit:

HRA or House Rent Allowance is the second biggest component of your salary after basic pay. This amount is tax-free if you are staying at a rented accommodation and to claim this benefit, you need to produce rent receipts during income tax e-filing. If you are staying with your parents then also you can claim this benefit by showing rent payment proof. However, there are some conditions to claim HRA benefits which are limited to actual HRA paid or actual rent paid or 40-50% of the basic salary, whichever is less. Employees working in metro cities can claim HRA benefit up to 50% of the basic pay, while for other places, the threshold is limited to 40%.

  • Know your LTA benefits:

LTA or Leave Travel Allowance is a component of employee’s salary package and you can claim tax relaxation during income tax filing against these expenses. However, the relaxations are subjected to certain conditions and the benefit can be claimed against travel expenses incurred during holidays. You can claim LTA benefit twice in a period of four years. Other than this, there are conditions set for travel mode, destination limit, mode of leave taken and members accompanied to claim this benefit during income tax e-filing. If you have travelled with your family members then you can claim benefit for their expenses too. You need to claim this benefit before 31st March of the Financial Year.

  • Keep your investment proofs ready:

Investments are an important tool for claiming tax benefit if they fall under the provisioned category of investments mentioned in the Income Tax Act. Under Section 80C, you can claim tax benefit up to INR 1.5 lakhs against such investments you did and you need to do this by 31st March. If you do not produce such investment proofs to your employer and they have deducted excess tax from your salary, then you can claim a refund for those amount during income tax filing.

  • Keep bank statements ready:

Bank statements are also required for preparing tax returns as they show the amount of interests you have earned on your savings account and fixed deposits. The Form 16 might not have these details and therefore, you need to keep these details ready in your hand. Interest earned on saving account is exempted from tax liability up to a limit of INR 10,000. And benefits associated with interest earned on FDs are related to the tax slab applicable to you. Both these benefits are provisioned under Section 10TTA and to claim these benefits during income tax e-filing, you will need your bank statement.

Also, to claim benefit under Section 80G, you need to furnish name and PAN details of the charitable trust. If you cannot see a different column in the ITR form to claim benefit against such donations, then you can simply claim a tax refund by furnishing the proofs during income tax filing.

The final thing you need to keep in mind is that the last date of filing income tax, which is 31st of July. Missing this deadline can attract a penalty on your tax burden and will spoil your tax credit history. Also, do not forget to sign and send the ITR-V form to CPC after income tax e-filing which verifies your return.


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