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Do you have personal income tax queries?

By ANIL REGO
October 27, 2020 09:18 IST
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Please mail us at getahead@rediff.co.in with the subject line 'Tax query for Anil' and Anil Rego of Right Horizons will answer all your tax queries.

While you mail us your queries here's how to begin with filing your income tax returns in five easy steps.

It may seem like a lot of paperwork, but it is swift and smooth once you start with a clear plan, says Anil Rego.

 

Filing your taxes need not be intimidating. The logic is simple. And the process is structured. We'll try to make it easier for you so your list of things-to-do is like back-hand math.

1. Collate your documents at once place

This is step one for laying out an action plan. Make sure your data is at one place.

Mandatory documents include Form 16 for salaried professionals, bank interest, tax savings on investments, capital gains, etc.

2. Choose the right ITR form (even if no tax dues)

The right ITR form needs to be chosen based on your source of income. The most basic form for salaried persons is the ITR-1.

If your income is over Rs 50 lakh and you have capital gains with more than one property you need to file ITR-2.

If on the other hand you have business income, you need to file ITR-3.

Do check the ITR form suitable for you before you start your filing. In case you pick the wrong form, then there is a danger of incomplete information, your return would be invalid and the tax department can issue a notice.

3. Verify credits in form 26AS 

Make sure your ITR is in harmony with Form 26AS. Any disparities in income or TDS will demand explanations later.

Capture all your returns and incomes systematically. Use the e-verify option with your digital signature, Aadhaar OTP, etc.

You may also manually send a signed copy of your ITR acknowledgment to the central processing centre (CPC).

4. Disclose all incomes and account for all deductions

All incomes from hustles, side-gigs, and clubbed incomes are taxable. A taxpayer needs to account for each of these incomes in the bank and reconcile them in their ITR.

Any discrepancy may invite notice from the tax department and penalties can also be applied.

Furthermore, you can avail of various deductions including little known deductions under Sections 80C to 8oU from expenses like stamp duty, interest earned from saving bank deposits, house rents, medical expenditures, donations, etc.

You need to maintain their supporting documents which may be furnished as required.

5. Double-check key information

Before you turn in your records in due time, also take notice of information on multiple incomes, deductions, savings, and investment schemes which can help you stay secure and claim benefits.

If you are uncertain about these benefits, you can use some help from a tax consultant or a chartered accountant.

And there you have it. Five points to keep in mind while filing your taxes. 

It may seem like a lot of paperwork, but it is swift and smooth once you start with a clear plan.

Like Ann Landers once said, 'A person doesn't know how much he has to be thankful for unless he has to pay taxes on it.' Besides, keeping your taxes right teaches more than gratitude. One learns to be more accountable, set the right priorities, and spend smarter.

Anil Rego is the founder and CEO of Right Horizons, an investment advisory and wealth management firm that focuses on providing financial solutions that are specific to customer needs.

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