Income Tax Return (ITR) filing: You can ignore these tax terms, but it will be a costly mistake!
Income Tax Return (ITR) filing: Every Indian needs to file income tax returns as soon as they enter the formal workforce and start earning beyond a certain level that makes them enter the exclusive, taxpayer's club. Income Tax Return (ITR) filing: Tax filing is a very cumbersome process for those who are new to it or new to the formal job sector fold. Fresh out of college and pushed into the corporate world, millennials are often lost when it comes to tax planning. This happens primarily because they are never introduced to it during their school or college life.
Income Tax Return (ITR) filing: Millenial Focus
FinTech firm Zeta said that most millennials think that if their salaries fall below the taxable bracket they shouldn’t even be filing ITR (Income Tax Returns). However, that is not true. "Every Indian needs to file income tax returns as soon as they enter the formal workforce and start earning. Hence, it is absolutely important that these processes are made familiar to millennials in the initial months itself so that they aren’t scrambling at the last minute i.e., hours before filing their taxes," it said.
Income Tax Return (ITR) filing: Key Terms
To help those who are newly employed and also new to the taxation system, here are some key income tax return terms they should must get up close and familiar with so that they do not lose a lot of money going forward nor become a target for the taxpayer, which can be an ever more dreadful prospect:
Income Tax Return (ITR) filing: Gross Income
Applicability: You are liable to file taxes if your gross total income (before deductions) exceeds Rs 2,50,000. In simple words, this is the initial tax-bracket or slab. (Pixabay)
Income Tax Return (ITR) filing: Deadline
‘Previous year’: Previous year is the 12-month period that begins on 1st April and ends on the 31st March of the next year. It's similar to the Financial Year. No matter when you start your job, your tax year closes on 31st March and a new tax year starts on 1st April. These are important dates to remember, because once you have missed on those, then it gets into a more tedious process to get those claims. (Pixabay)
Income Tax Return (ITR) filing: Assesment year
Assessment year: This is the year in which you will file your returns for the previous year. Let's say if April 2018 to March 2019 is your financial year, then your Assesment year would be April 2019 to March 2020. (Pixabay)
Income Tax Return (ITR) filing: Section 80C
Section 80C: This is a section under Income Tax Act that allows you to take off Rs 1,50,000 from your Gross Income. You need to invest this amount in various investment tools as notified under the act to claim a tax rebate. (Pixabay)
Income Tax Return (ITR) filing: Benefits
Flexible Benefits: Make sure you opt for the flexible benefits your organisation offers. These are tax saving benefits like the meal, telephone and internet reimbursements, LTA, fuel allowance etc. These benefits will help you save close to Rs 80,000 over and above the deductions under Section 80C, which itself offers Rs 1.5 lakh in investment related benefits. (Pixabay)
Income Tax Return (ITR) filing: Form 16
Form 16: This is a certificate issued by an employer validating the fact that TDS has been deducted and deposited with the authorities on behalf of the employee. Form 16 is a must-have document for working employees. (Pixabay)