Friday, August 6, 2010

How to file your income tax returns!

As the d-day (31 July) to file the income tax returns is just couple of days away, it is high time that you file your returns before it is too late. If you are very busy, then you can file your returns online too. You are duty bound to do so.

You have to remember that filing of tax returns is mandatory for everyone whose gross total income exceeds the basic exemption limit, which is Rs1.90 lakhs for women below 65 years of age, Rs 2.40 lakhs for senior citizens and Rs 1.60 lakhs for any other individual, for the financial year 2009-10 (for income earned between April 2009 and March 2010). The due date for filing the tax returns for financial year 2009-10 in case of individual tax payers is July 31, 2010. The current tax returns don`t require any documents to be annexed.

According to noted income tax consultant,Surinder Gambhir,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, you have to fileincome tax returns. It is necessary to file income-tax returns if the total income, before allowing any deduction, exceeds the exemption limit.

All you need is Form 16 and 16A along with the summary of all your bank accounts. And of course your PAN Card number.

There are eight Income tax return (ITR) forms. Depending on the various streams of income you earn, you have to select the return form accordingly. If you have income from salary, pension and interest income, then ITR-1 is the form for you. If you have capital gains or rental income or you’re paying off a home loan in addition to interest income and salary income, then you need to fill ITR-2. Make sure you select an appropriate form after taking into consideration, the flow of income from various streams.

There are two possible ways to file your returns—online and offline.

Though many are contemplating whether it’s worthwhile shifting from the old fashioned method of filing returns physically to a modern method i.e. e-filing which was introduced in the assessment year 2006-07, but the fact remains that with the last day for filingIncome Tax returns coming close, whatever means you choose-offline or online, what matters is that it is done before its too late.


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