Sunday, June 16, 2019

Filing out a tax return for the first time? Here are seven important tips


Individuals (residents and non-residents) need not pay taxes on income up to Rs 2.5 lakh. Beyond this limit, their income becomes taxable based on slab rates prescribed under the law.


There are many who find income tax calculation and filing to be a tough task. However, reading and learning about it can turn out to be a skill useful for a lifetime. Knowing this basic skill gives you the confidence to deal with your income and taxes. Here are a few important tips that are useful when filing income taxes, especially for first-time taxpayers.

Tips for first-time taxpayers
Tax payment period and related terms

Tax is calculated based on the income earned during the period from April 1 of the current year to March 31 of the following year. This period is called the financial year (FY) and the year in which the income is assessed is called the assessment year (AY).
For example, the income accrued during the financial year 2018-19 is assessed in the assessment year 2019-20.

Income tax slabs
Taxpayers must determine the income tax slab they fall under to determine their tax liability for a given financial year. The income tax slabs are designed based on the income range per annum.

Each category of income per annum will correspond to a certain percentage of tax. Additionally, a certain percentage of cess will also be applicable.
Individuals (residents and non-residents) need not pay taxes on income up to Rs 2.5 lakh. Beyond this limit, their income becomes taxable based on slab rates prescribed under the law. The basic exemption limit is increased to Rs 3 lakh for a senior citizen and to Rs 5 lakh for a super senior citizen.

Form 16
Form 16 is a TDS certificate provided by an employer for salaried individuals. This form includes all the salary details to be entered while filing income tax returns. The latest Form 16 is designed such that it can be directly used to report all the information to be entered in new ITR-1 form. It consists of information on the deductions you have claimed, the salary earned, and exemptions availed.

The employer should provide Form 16 by 15 June every year. Though, the due date for providing Form 16 has been extended to 10 July 2019.

Business Standard

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