Know the intricacies involved in filing Income Tax returns

Income Tax returns

There are many ways by which you can file your income tax return. The ways can be broadly categorized into two categories -Filing ITR Online and Filing ITR manually. For the benefit of the readers and the concerned individuals let us understand each of the two ways in detail here. E-Filing returns through the website of Government -Since every government encourages to E-file return so they have a government owned site which help taxpayers to E-file income tax returns. E-Filing returns through private websites – Some private companies have developed websites which facilitates a person in E-filing of ITR easily. The main advantage of E-filing through private websites is that they have very user-friendly interface such that even a non-finance person can E-file income tax easily. Many taxpayers take the help of a tax professional, Chartered Accountants or certified publishers who e-file on their behalf. Normally the income tax department sets the class of persons who are compulsorily required to E-file ITR and making it optional for other class to either file manually or E-file electronically.

There are various benefits of E-filing the tax returns over manual filing. Firstly, E-Filing ensures accuracy in tax calculations as compared to manual filing. Secondly If you E-File you get tax refunds quickly. Thirdly, while E-Filing you get to know how taxes are calculated on your income. Lastly, when you E-File the records get saved forever. Thus you can access them online anytime. Also there other various benefits to file the returns electronically. The whole process becomes faster at both the ends – tax payer and income tax office. It enables the department to process your return faster and refund the surplus amounts. You can file the ITR using your convenient place and time. There is no validity of working hours to file it. Special software has been built to compute your taxes which validates and connects directly to the income tax department. This enables smooth transition of information by reducing human errors.

Why one needs to file tax returns?

Filing IT reruns is the duty of every citizen who comes under the Income Tax Law. This is a lifelong process even one goes out of the preview of tax after retirement or due to other reasons.

Due to the following reasons one needs to file the IT returns:

  • There is a penalty for failing to file a tax return which is separate from failing to pay taxes. A taxpayer can avoid the failing to file penalties by filling a tax return on-time.
  • Interest for nonpayment also accumulates from the time the tax return is due. This means even if you are not filling, interests are accumulating. A taxpayer can save money by setting-up an installment plan rather than just completely not filling and paying the taxes.
  • Another reason to file a tax return is that individuals think they owe money, but what if they have a refund. This means that non-filers with a refund just gave away a low interest loan to the government. Refunds can only be claimed by filing tax returns. A refund can be forfeited if tax returns are not filed on-time.