Updated: 6 days ago
Filing your Income Tax Returns (ITR) and figuring out how to maximize savings on tax could be extremely tricky and complex, especially with the added option of the New tax regime in Budget 2020.
It is no news that tax can burn a hole in your income if the payable tax is not minimized or the ITR is filed incorrectly.
"The hardest thing in the world to understand is Income Tax" - Albert Einstein
If these are your sentiments, we feel you. This step-by-step guide along with a comprehensive Tax Wizard on MoneyPlanned will help you file your taxes with ease and save the maximum amount on tax.
Let's begin without further ado. Here you go.
Step 1: Calculate Your Tax Payable
First things first. Calculate your total tax payable and the goal is obviously to minimize it to the max.
After the 2020 Union Budget, you can opt for one of the two options for filing your taxes:
The Old Regime (with exemptions like 80C, etc)
New Regime (without any exemptions)
Our tax saving calculator helps you make this decision. To calculate your tax savings with ease, try it out now.
Step 2: Collect All Required Documents For Filing ITR
Here's a comprehensive list of all documents that are involved in the tax filing process that comes in handy.
Form 16: This is the TDS (Tax Deducted at Source) certificate provided by your employer. It contains the calculations for TDS and breakup of any exemptions availed such as HRA.
Form 26AS: This is your overall tax statement, available at www.incometaxindiaefiling.gov.in. It includes the following: - TDS deducted by your employer - TDS deducted by Banks, etc - TDS deducted by any other parties from payments made to you - Advance taxes paid by you - Self-assessment tax paid by you, if any
Tax saving investment proofs: List of all the proofs for availing deductions like 80C, 80CCD, etc. Here are a few income-generating investments that also help save tax. - Employee's Provident Fund (EPF) - Public Provident Fund (PPF) - Life Insurance Premium - Equity Linked Savings Scheme (ELSS) - Sukanya Samriddhi Yojana (SSY) - National Pension Scheme (NPS)
Home Loan Statement: Statement from Bank/NBFC showing principal and interest payment of the home loan. It is used to avail deductions under Section 24.
Interest certificates: You need to state the sources of interest income in ITR, from a bank savings account, post office, and other investments. Alternatively, you can use your updated passbook.
Form 16A/16B/16C: 16A is for TDS deducted on Fixed Deposits, Recurring Deposits, etc. 16B is for TDS on sale of a property. 16C is for TDS on rental income deducted by your tenant.
Capital Gains: Get statements from Mutual Fund Houses or Brokers for gains from mutual funds or shares. For the sale of a property, deed and sale deed needs to be purchased.
Other Deduction Claims Proofs: To claim deductions for Sec 80D-U you need the respective proofs like Mediclaim receipts, Education loan statement, etc.
Details of Investments in Unlisted Companies: The following details of the company need to be furnished - PAN of the company - Opening balance - Shares acquired during the year - Shares transferred during the year - Closing balance.
Step 3: File Your ITR On Income Tax Portal
There are three types of ITR Forms namely ITR-1, ITR-2, ITR-3, and ITR-4 classified based on your level/source of income, asset value, and a few other factors.
Here's a checklist for you to figure out which ITR form is applicable to you.
Once you have selected which ITR form you need to fill, you can proceed to file and submit the ITR.
The Procedure for Filing ITR-1 Online
If ITR-1 is applicable to you, here's the detailed procedure for the e-filing of ITR.
#1: Log in to your e-Tax account on this link www.incometaxindiaefiling.gov.in Click on "Filing of Income Tax Return".
#2: Select "Prepare and Submit Online" under Submission mode.
#3: Verify and edit all the details about income, deductions, etc. according to your documents
#4: Verify the TDS and make sure all the details are filled correctly without any errors.
If you discover any omission or wrong statements after filing your IT return, you can furnish a revised return.
#5: Then, you get the final tax payable details.
Verify if you can get a tax refund or if you have any balance amount payable.
#6: If you have any tax refund, select your account to receive it.
Else, complete the payment of the balance tax amount to the Income Tax Department on the link enclosed below.
Select Challan 280 and proceed by filling up your details.
Save the BSR code and Challan number from the receipt and fill it up in the ITR.
#7: Upon payment and filling up the ITR, head to the final section, and select either of the options to complete your verification.
Hurray! You've finished filing your ITR.
That's it. Easy, wasn't it?
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