Taxation is simple yet the most difficult things to deal with, there are just so many inclusions and exclusions that are bound to confuse anyone. But, government from time to time tries to simplify the process.
Let us decode the taxation process step by filing.
Understanding the exemption limits: Be sure to check your individual taxation limits to see which one fits you the most. For instance, the taxable limit for an individual up to the age of 60 is INR 2,50,000, likewise, there are various income tax slabs that keep on changing year on year.
Should you file tax returns: Filing returns is always a good practice because it is a self-assessment wherein you certify what amount is legally government’s income. If you don’t file assessment, the government would not know whether it is their rightful income, or they need to return the money in form of tax returns, which impacts government’s future budget. Even if you overpaid, you would leave the government in a vague situation wherein it wouldn’t know what amount is exactly payable to them, and just like everyone else, the government too doesn’t like uncertainty. If your income exceeds the exemption limit, then you must file for tax returns, failing to do so will incur a penalty, and if your income exceeds Rs 5 Lakhs, then you should mandatorily file the tax return electronically. Any tax consultant should be able to help you with it.
Penalty: If you do not file tax returns by the last date of filing tax refunds, then you can attract a penalty of Rs 5,000. Thus, be always ready and try to file the tax return before the deadline.
Refund: If you have invested money as per sections like 80c, 80g or has special exemptions like 80dd, then you can claim the refund for the exempted income taxed.A good tax consultant will help you figure this all out.
Giving an account of all the income: Remember that government has an eye on all of your transactions, so report everything that you know, including interest and any other income that you have. It will help quick and hassle-free assessment of taxes.
Save money with good consultation: In a due course of time, you would figure out that it is the best way to go about doing things because a good tax consultant can help you save a lot of money that you otherwise pay in taxes.
NRIs are taxed differently: If you are an NRI, be sure to check additional inclusions/exclusions about paying income taxes, and also under the benefit and difference of NRE and NRO accounts, and taxation, it is important, to take a sound guidance before filing income tax. Hence you must pay special attention to every aspect of taxation.