Simple Tips To File Income Tax Returns Yourself

Filing income tax return is quite a perplexing task but it can be made simple by following certain simple tips. Today there is hardly any need for professional assistance to file IT returns as it has been simplified through advanced technologies. Income tax returns can be filed online quite easily.

Simple tips to File IT returns

Before downloading any files from online websites, it is quite essential to ensure whether the income is exempted from taxes. Income upto a limit of 2, 00,000 for both men and women are exempted from taxes. Senior citizens are also exempted from taxes upto an income limit of 2, 50,000 rupees.

There are many online websites that offer assistance in filing income tax returns. Search an appropriate website and download the IRS form. These websites also offer relevant tips and information on how to compute the tax liabilities and fill the form. Prior experience is seldom required to file tax returns as most of these sites offer assistance to file these forms correctly.

The electronic income tax return filing process is quite simple compared to the stress and complications involved in filing taxes in the earlier days.

It is important to register yourself in the website of directorate of income tax, India, ( https://incometaxindiaefiling.gov.in/ ) if you are not yet registered. To set the login and password, fill in the PAN number and other details. Log out and then log in with the use of user id or PAN number.

The website contains all the required forms for filing the IT returns. 

• Download the form for individual tax filing purposes. 
• Fill details such as name, address, source of income city, state and pin code. 
• Fill in the PAN number wherever required. 
• Fill all the relevant details about income, investments and taxes paid and check the details thoroughly.

Fill in the details of the company and addresses if the income is derived only from salary. If all the details are correct, it is time to create an XML file and submit the form. A copy of the file is sent to the personal email ID of the person. The acknowledgement can be downloaded easily.

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How to Invest in Various Tax Schemes

Investing in tax saving schemes should start from the beginning of the year itself instead of postponing the activity to the year end. There are many tax saving options available to the investors. Proper planning should be done by considering all available options and the right decision is to be taken. For better utilization of the available schemes, investors can seek the help of tax consultancy firms by paying a nominal fee. A brief description of the available tax saving options is given below for better utilization.

Section 80C

Under section 80C of Income-Tax Act, total admissible deduction for tax saving schemes is Rs. 1 lakh per annum. The following schemes are covered under this section.

• EPF: Employee Provident Fund deducted from salaries of the employee is tax exempted. It is deducted at 12% of the basic salary and an equal amount of contribution is made by the employer to the account. It is a good scheme for salaried class. The employee has an option to contribute more than 12% also subject to the maximum limit of Rs.1 lakh. Interest earned on this amount is tax free.
• PPF: Public Provident Fund is tax exempted up to a ceiling of Rs. 70,000 contribution per year. This is for people not covered by EPF scheme. This fetches an interest rate of 8% which is lower than EPF. Interest earned is tax free. But funds are locked for 15 years in this scheme.
• NSC: Amount invested in National Saving certificates is also tax free. But interest earned under this scheme is taxable at maturity.
• Fixed Deposits: Bank Fixed Deposit with tax saving schemes is also exempted under this section subject to the total exemption of Rs.1 lakh. But interest earned is taxable at maturity.
• Senior Citizen Saving Schemes: These options are available for 60 years and above old or to those voluntarily retired after 55 years. But interest is taxable.
• Equity Linked Saving Schemes: These schemes known as ELSS are market related investments for not less than 3 year period and are covered for tax savings. These investments are popular as they reap good returns. But interest is taxable.
• Unit Linked Insurance Plans: ULIP is also market related and good as it offers double benefits of insurance cover and equity investment benefits. Interest is taxable.

In addition to above options, Section 80C includes the tuition fees paid for children, LIC premiums and Home Loan installment payments also under the Rs.1lakh deduction admissible limit.

Section 80CCF

Introduced in Finance Bill 2010-11, another Rs.20,000 tax deduction benefits is allowed on investments made in infrastructure bonds of some notified organizations for a minimum period of 5 years. This is in addition to the normal limit of Rs.1lakh under section 80 C.

Section 80D

Under this section, health insurance premiums paid up to Rs.15, 000 for self and Rs.15, 000 for parents (Rs.20, 000 in case of senior citizens) is exempted from tax.

Section 80E

The entire interest paid on educational loans for self, spouse and children is exempted from tax.

Section 24

Under this section, tax benefits are allowed up to Rs.1, 50,000 on all interest payments.

One needs to weigh the pros and cons of each investment and have a careful comparison, before selecting the investment option. If you are a new tax payer then you can take advise from income tax consultants. They will provide you an easy and profitable way in which you can save your tax as well as some handsome investments also for a better and worthy future.

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