"The hardest thing to understand in the World is Income Tax" This is a saying by the famous scientist Albert Einstein himself. Now, it's time to file your income tax returns, popularly called filing ITR. The deadline of July 31st soon approaches. You have to file ITR for the income you have earned in FY 2016-17 by July 31st 2017. But there's a problem. You don't have Form 16. Why don't you have Form 16.....Oh, the boss has not given it to you. Now that's a big problem. How will you file ITR?
For those who don't know, Form 16 is a certificate that is given to you (salaried employee), by your employer. You get details like components of your salary, other income and also tax deductions . You also have a summary of the TDS (Tax Deducted at Source), which has been deducted by the employer on your behalf and credited to the tax department.
Want to know more about Tax Planning? You can file ITR even without the Form 16 and it's not very difficult. Want to know more on tax planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.
Collect all your monthly payslips. You then add them and calculate your gross yearly salary. So what is your gross salary? Gross salary is your taxable salary, before Chapter V1-A deductions. Chapter V1-A deductions are Section 80C to Section 80U deductions. Do not include the exempt portion of allowances. Add only the taxable portion of HRA, LTA and other allowances.
If your employer has deducted any taxes on your income, you can easily find these details through Form 26AS. Form 26AS has details of TDS deducted by your employer or even your bank. Form 26AS can be downloaded from TRACES. If you spot a discrepancy in TDS actually deducted and the TDS which should have been deducted, contact your employer immediately and ask him to rectify this error.
You get House Rent Allowance (HRA) as part of your salary package. You get this amount, towards the expenses of your rented accommodation. Your employer decides how much HRA you get, based on your salary and the city/metro where you reside. To claim the HRA exemption, submit your rent receipts to the payroll department.
You may also like: HRA Calculations for FY 2016 To 2017.
You get tax deductions under Section 80C up to INR 1.5 Lakhs a year. You get a tax deduction, up to INR 1.5 Lakhs a year, under Section 80C of the income tax act, on the premium you pay for life insurance plans. You also get this benefit on your investments in PPF, ELSS, Tax saver FD, EPF, NSC, Post office monthly income schemes, Sukanya Samriddhi Yojana and so on. You can claim all the deductions under Section 80C while filing ITR, even if you have not disclosed them to your employer.
You can also claim deductions under Section 80D (health insurance premium), Section 80E (Interest on education loan) and other deductions like Section 80DD, Section 80DDB and other Chapter V1A deductions. Keep investment proofs handy in case the tax assessing officer asks for them.
Have you disclosed income from other sources like interest income on FD to your employer? No problem....But you better disclose income from other sources when you file ITR. Do you own a house or a property? Do report it while filing ITR. You must also report interest income earned from FD or savings bank account or any other income.You must also report rental income you have earned on your house/property in the Financial Year, after deducting Municipal Taxes and Standard Deduction at 30%.
If you find the tax paid by you in the financial year is less than what you should actually pay as per Form 26AS, you have to pay the difference. So file ITR online and pay your taxes.
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