A Beginner’s Guide to Filing Income Tax Returns

Filing your income tax return (ITR) for the first time can be a daunting task, but with the right guidance, it can be a smooth and straightforward process. This guide aims to provide you with a comprehensive understanding of how to file your ITR in India, ensuring you stay compliant and make the most of the available benefits. Read this blog: How to Pay Zero Tax Legally in India

Why File Your Income Tax Return?

Filing your ITR is not just about fulfilling a legal obligation; it’s also about securing your financial future. An ITR serves as proof of your income, which can be crucial when applying for loans, visas, or even renting a house. Moreover, it helps you claim refunds if you’ve paid excess taxes and ensures you benefit from various deductions and exemptions. You may want to check Understanding Real Estate Taxes: A Simple Guide for Homeowners

Understanding the Basics

Know Your Tax Slabs

For the financial year 2024-25, the tax slabs are as follows:

• Income up to ₹2.5 lakh: 0%
• Income from ₹2.5 lakh to ₹3 lakh: 5%
• Income from ₹3 lakh to ₹5 lakh: 5%
• Income from ₹5 lakh to ₹6 lakh: 20%
• Income from ₹6 lakh to ₹9 lakh: 20%
• Income from ₹9 lakh to ₹10 lakh: 20%
• Income from ₹10 lakh to ₹12 lakh: 30%
• Income from ₹12 lakh to ₹15 lakh: 30%
• Above ₹15 lakh: 30%

Identify Your Tax Filing Status

Your filing status depends on your age and income. For instance, senior citizens (above 60 years) and super senior citizens (above 80 years) have higher exemption limits. Check this blog out: RBI Monetary Policy Update: Insights and Implications for the Indian Economy

Gather Necessary Documents

Before you start, ensure you have all necessary documents:

• Form 16: Provided by your employer, detailing your salary and tax deducted at source (TDS).
• Bank Statements: To verify interest income.
• Investment Proofs: For deductions under Sections 80C, 80D, etc.
• Property Details: If you have rental income or a home loan.

Step-by-Step Guide to Filing ITR

Register or Log In on the Income Tax Portal

Visit the Income Tax e-filing portal and create an account if you don’t have one. Use your PAN (Permanent Account Number) to register.

Select the Right ITR Form

The ITR form you need depends on your income sources:

• ITR-1 (Sahaj): For individuals with income from salary or pension and up to one house property.
• ITR-2: For individuals with income from more than one house property, capital gains, or income from other sources.

Fill in the Required Information

Enter your personal details, income details, and any deductions or exemptions you are claiming. Ensure all information is accurate to avoid any discrepancies.

Review and Submit

Double-check all entries for accuracy. Once you are satisfied, submit your ITR. You can also e-verify your return through net banking, Aadhaar OTP, or other methods.

Key Trends and Statistics

Rise in Tax Filings

In the assessment year 2021-22, a total of 6.75 crore taxpayers filed their income tax returns, marking a 5.6 percent increase from the previous year’s 6.39 crore filings. This trend indicates a growing awareness and compliance among taxpayers.

Widening Tax Base

The number of ITR filings has shown a consistent upswing over the last few years. In AY 2023-24, 7.41 crore returns were filed, including 53 lakh new first-time filers. This is an indication of the widening of the tax base subsequent to various reform measures put in place by the Department. Besides, read How to Build an Investment Portfolio from Scratch.

Income Inequality Concerns

Critics have raised concerns about income inequality based on tax data. The top 1 percent of income tax payers went from earning 17 percent of all income in 2013-14 to 23 percent in 2021-22. However, the government has taken steps to simplify the tax regime and make it more equitable. Read Stocks vs. Mutual Funds: Which One Is Right for You?

Conclusion

Filing your income tax return is a crucial step in managing your finances and complying with the law. By understanding the basics, gathering the necessary documents, and following the steps outlined in this guide, you can file your ITR with confidence. Stay informed and take advantage of the various deductions and exemptions available to maximize your savings. For more detailed information and updates, visit the Income Tax Department website. For those in pursuit of their dream home, investment opportunities, or a sanctuary to call their own, Jugyah provides top housing solutions with its intelligent technology.

Frequently Asked Questions

Q1. What is the deadline for filing ITR?

The deadline for filing ITR for the financial year 2024-25 is July 31, 2025.

Q2. Can I file my ITR online?

Yes, you can file your ITR online through the Income Tax e-filing portal.

Q3. What if I miss the deadline?

If you miss the deadline, you can still file your ITR, but you may not be able to claim a refund for any excess taxes paid.

Q4. Do I need a PAN to file my ITR?

Yes, a PAN is required to file your ITR. It helps in identifying taxpayers and ensures accurate record-keeping.

Q5. Can I file my ITR if I have no taxable income?

Yes, you can file your ITR even if you have no taxable income. This helps in maintaining a clean financial record and can be beneficial in the future.