Income Tax Returns

In some cases, it is mandatory to file an income tax return but it can also be filed voluntarily. There are many benefits of filing income tax return which you must not avoid.






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    Overview of Filing Income Tax Return 2023-24

    The deadline for submitting an Income Tax Return (ITR) for the Financial Year 2022-23 is set for July 31.

    The new Assessment Year 2023-24 commenced on April 1. Typically, the deadline for filing the Income Tax Return is July 31, and it is anticipated that this date will remain unchanged for the current year.

    In the past, the Government has granted extensions for filing ITRs for various reasons.

    However, this year, it is unlikely that any further extensions will be provided, as the Central Board of Direct Taxes (CBDT) has released the new ITR forms for Assessment Year 2023-24 over a month in advance.

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    Benefits of Paying Income Tax

    Every conscientious citizen of the nation has a duty to file their taxes annually, as this is both a moral and social responsibility. This practice establishes a basis for the government to assess public expenditure and offers a mechanism for taxpayers to regularly pursue refunds and various forms of relief.

    The act of paying taxes signifies a commitment to civic duty. Furthermore, as the tax authority maintains a comprehensive record of an individual or entity’s income and any taxes owed, it facilitates smoother future transactions for that individual or entity.

    It is advisable to consider voluntarily submitting tax returns, even if your income falls below the mandatory filing threshold. Many states require proof in the form of tax returns from the previous three years for real estate registration. When refunds are processed, it significantly simplifies the documentation of the associated transactions.

    To secure approval for a mortgage loan in the future, it is essential to maintain a consistent history of tax filings. If you intend to apply for a loan as a co-borrower, you may be obligated to present your spouse’s tax returns. Additionally, credit card issuers may require proof of tax returns prior to issuing a card.

    Timely payment of taxes offers numerous advantages, irrespective of whether your income exceeds the threshold for filing. Losses, including both speculative and non-speculative, as well as short-term and long-term capital losses, that are not reported on an individual’s or entity’s tax return for a given fiscal year cannot be deducted from taxable income in future years. This rule applies to all types of losses. Therefore, it is crucial to file returns consistently, as you cannot predict when you might need to claim an adjustment for prior losses.

    Financial institutions often seek access to your federal and state tax returns from previous years before engaging in business with you. In fact, regulatory requirements may compel them to do so, thereby necessitating that taxpayers submit regular tax returns, even if they opt to file voluntarily. It is important to note that a tax return must be filed even if the purpose is solely to adjust for prior losses.

    Surcharge
    • Should your yearly earnings surpass Rs. 50 lakhs, an additional income tax of 10% will be applicable.
    • For individuals whose total income exceeds Rs. 1 crore, a tax rate of 15% is mandated.
    • In cases where the annual income exceeds Rs. 2 crore, a tax rate that is 25% above the standard rate will be imposed.

    • If your total income attains Rs. 5 crore, a tax rate of 37% will be required.

      The maximum surcharge rate under the New Tax Regime has been reduced from 37% in the 2023 Budget to 25%. This change is set to take effect on April 1, 2023.

     

    Essential Documentation Required for Income Tax Return Submission

    • Documentation for accounts maintained with the Public Provident Fund, Registered Retirement Savings Plans, and savings accounts at financial institutions and postal services includes a passbook.
    • Pay slips, Aadhar Card, PAN Card, and Form-16 TDS Certificate issued by your employer, which outlines the salary earned and any TDS deducted, if applicable, are also necessary. Additionally, Interest Certificates from banks and post offices are required.
    • Any payments received beyond salaries, such as interest from fixed deposits or recurring deposits that surpass the TDS thresholds established by current tax regulations, must be reported using Form-16A.
    • In the event of selling real estate, the buyer is obligated to furnish you with Form 16-B, which details the tax withheld from the sale proceeds, as mandated by law.
    • Form 16C, provided by your landlord, specifies any tax withholdings related to your rental payments. Your annual tax statement is represented by Form 26AS, which encompasses all tax information associated with your PAN.
    • This includes TDS deducted by your employer, TDS withheld by banks, and TDS from any other entities for payments made to you.
    • Furthermore, it includes advance taxes you have submitted, self-assessment taxes you have paid, and documentation of tax-saving investments.
    • Evidence for deductions under Articles 80D to 80U, such as health insurance premiums for yourself and your family or interest on education loans, is also required.

    • Lastly, a bank statement for a mortgage loan is necessary.

    Procedures for Completing an Income Tax Return

    The Income Tax Department has now authorized the electronic submission of tax returns. Prior to understanding the process of electronically submitting an income tax return, it is essential for a taxpayer to maintain accurate records for the computation and reporting of their Income Tax Return (ITR).

    • Calculate Your Income

    • Requirements Include Form 26AS and Tax Deducted at Source (TDS) Certificates.

    • Choose the Appropriate Income Tax FormGo to the Income Tax Portal and Download the ITR Software
      Check Entered Data
      Convert the File to XML Format
      Upload Your XML File to the Income Tax Portal
      After Selecting the XML File to Upload from Your Own Computer, Click Submit

    What are various approaches to reduce income tax liabilities?

    • Under Section 80C, individuals are permitted to claim a deduction of up to Rs 1.5 lakh for various expenditures, including investments in Equity Linked Savings Schemes (ELSS), Life Insurance Corporation (LIC) policies, mutual funds, educational expenses for children, and interest payments on home loans.
    • Additionally, contributions made to the Central Government National Pension Schemes qualify for an extra deduction of Rs 50,000 under Section 80CCC, which is in addition to the Rs 1.5 lakh limit.
    • Section 80D of the Internal Revenue Code allows taxpayers to deduct health insurance premium costs for themselves, their spouses, dependent children (up to 26 years of age), and dependent parents (up to 65 years of age).
    • Contributions made to eligible charitable organizations and trusts can be claimed as tax deductions under Section 80G.
    • For individuals with fewer than 10 children, the housing allowance may be reduced as per Section 13A.
    • Loans taken for higher education are eligible for deductions under Section 80E.

    • For owner-occupied residences, the deduction for home loan interest under Section 4 is capped at Rs 2 lakh, whereas there is no limit for properties that are rented out.

    Legalixo Support in transitioning a Income Tax Returns

    • Purchase a Plan for Expert Assistance
    • Add Queries Regarding the conversion
    • Provide Documents to Legalixo Expert
    • Complete all other required Actions
    • Get your work done!

    Benefits of Paying Income Tax

    Every conscientious citizen of the nation has a duty to file their taxes annually, as this is both a moral and social responsibility. This practice establishes a basis for the government to assess public expenditure and offers a mechanism for taxpayers to regularly pursue refunds and various forms of relief.

    The act of paying taxes signifies a commitment to civic duty. Furthermore, as the tax authority maintains a comprehensive record of an individual or entity’s income and any taxes owed, it facilitates smoother future transactions for that individual or entity.

    It is advisable to consider voluntarily submitting tax returns, even if your income falls below the mandatory filing threshold. Many states require proof in the form of tax returns from the previous three years for real estate registration. When refunds are processed, it significantly simplifies the documentation of the associated transactions.

    To secure approval for a mortgage loan in the future, it is essential to maintain a consistent history of tax filings. If you intend to apply for a loan as a co-borrower, you may be obligated to present your spouse’s tax returns. Additionally, credit card issuers may require proof of tax returns prior to issuing a card.

    Timely payment of taxes offers numerous advantages, irrespective of whether your income exceeds the threshold for filing. Losses, including both speculative and non-speculative, as well as short-term and long-term capital losses, that are not reported on an individual’s or entity’s tax return for a given fiscal year cannot be deducted from taxable income in future years. This rule applies to all types of losses. Therefore, it is crucial to file returns consistently, as you cannot predict when you might need to claim an adjustment for prior losses.

    Financial institutions often seek access to your federal and state tax returns from previous years before engaging in business with you. In fact, regulatory requirements may compel them to do so, thereby necessitating that taxpayers submit regular tax returns, even if they opt to file voluntarily. It is important to note that a tax return must be filed even if the purpose is solely to adjust for prior losses.

    Surcharge
    • Should your yearly earnings surpass Rs. 50 lakhs, an additional income tax of 10% will be applicable.
    • For individuals whose total income exceeds Rs. 1 crore, a tax rate of 15% is mandated.
    • In cases where the annual income exceeds Rs. 2 crore, a tax rate that is 25% above the standard rate will be imposed.

    • If your total income attains Rs. 5 crore, a tax rate of 37% will be required.

      The maximum surcharge rate under the New Tax Regime has been reduced from 37% in the 2023 Budget to 25%. This change is set to take effect on April 1, 2023.

     

    Essential Documentation Required for Income Tax Return Submission

    • Documentation for accounts maintained with the Public Provident Fund, Registered Retirement Savings Plans, and savings accounts at financial institutions and postal services includes a passbook.
    • Pay slips, Aadhar Card, PAN Card, and Form-16 TDS Certificate issued by your employer, which outlines the salary earned and any TDS deducted, if applicable, are also necessary. Additionally, Interest Certificates from banks and post offices are required.
    • Any payments received beyond salaries, such as interest from fixed deposits or recurring deposits that surpass the TDS thresholds established by current tax regulations, must be reported using Form-16A.
    • In the event of selling real estate, the buyer is obligated to furnish you with Form 16-B, which details the tax withheld from the sale proceeds, as mandated by law.
    • Form 16C, provided by your landlord, specifies any tax withholdings related to your rental payments. Your annual tax statement is represented by Form 26AS, which encompasses all tax information associated with your PAN.
    • This includes TDS deducted by your employer, TDS withheld by banks, and TDS from any other entities for payments made to you.
    • Furthermore, it includes advance taxes you have submitted, self-assessment taxes you have paid, and documentation of tax-saving investments.
    • Evidence for deductions under Articles 80D to 80U, such as health insurance premiums for yourself and your family or interest on education loans, is also required.

    • Lastly, a bank statement for a mortgage loan is necessary.

    Procedures for Completing an Income Tax Return

    The Income Tax Department has now authorized the electronic submission of tax returns. Prior to understanding the process of electronically submitting an income tax return, it is essential for a taxpayer to maintain accurate records for the computation and reporting of their Income Tax Return (ITR).

    • Calculate Your Income

    • Requirements Include Form 26AS and Tax Deducted at Source (TDS) Certificates.

    • Choose the Appropriate Income Tax FormGo to the Income Tax Portal and Download the ITR Software
      Check Entered Data
      Convert the File to XML Format
      Upload Your XML File to the Income Tax Portal
      After Selecting the XML File to Upload from Your Own Computer, Click Submit

    What are various approaches to reduce income tax liabilities?

    • Under Section 80C, individuals are permitted to claim a deduction of up to Rs 1.5 lakh for various expenditures, including investments in Equity Linked Savings Schemes (ELSS), Life Insurance Corporation (LIC) policies, mutual funds, educational expenses for children, and interest payments on home loans.
    • Additionally, contributions made to the Central Government National Pension Schemes qualify for an extra deduction of Rs 50,000 under Section 80CCC, which is in addition to the Rs 1.5 lakh limit.
    • Section 80D of the Internal Revenue Code allows taxpayers to deduct health insurance premium costs for themselves, their spouses, dependent children (up to 26 years of age), and dependent parents (up to 65 years of age).
    • Contributions made to eligible charitable organizations and trusts can be claimed as tax deductions under Section 80G.
    • For individuals with fewer than 10 children, the housing allowance may be reduced as per Section 13A.
    • Loans taken for higher education are eligible for deductions under Section 80E.

    • For owner-occupied residences, the deduction for home loan interest under Section 4 is capped at Rs 2 lakh, whereas there is no limit for properties that are rented out.

    Legalixo Support in transitioning a Income Tax Returns

    • Purchase a Plan for Expert Assistance
    • Add Queries Regarding the conversion
    • Provide Documents to Legalixo Expert
    • Complete all other required Actions
    • Get your work done!

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