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Questions (FAQs) on
What is Income Tax Return ?
Income tax return or more popularly known by it’s acronym ITR is the process of declaring your income for a particular financial year and submit the details of taxes paid or to be paid by you to the Income tax dept of the Govt of India. So, the ITR has 2 major components :- Declaring the Income & Declaring the Taxes.
Declaring your income : In your annual Income tax return, you have to give a complete list of all your earnings together to the income tax department. Your income includes sources such as salary, business income, professional fee income, rent, bank interest earned, capital gains or losses, family pension, awards or lottery money etc.
Declaring your taxes: In cases where TDS (tax deduction at source) has been paid by you, you need submit the amount as TDS and where TDS is not paid but on self-assessment tax liability occurs you need to pay advance tax. Certain amounts of your income which fall under standard deductions and the amount that you invest in tax savings instruments as permitted in IT act, you get tax waivers as well.
There are prescribed formats & guidelines for the ITR filing which you need to adhere to.
What are the ways to file Income Tax Return (ITR)?
Primarily there are 4 ways to file your income tax return.
Option 1 – You can do it yourself. Go to income tax website, download the forms, read the guidelines, fill the forms, attach the documents, sign & send it to income tax dept.
Option 2- The most convenient & popular way is to do e-filing. You can do it at income tax website or there are may e-filing third party websites and even e-filing mobile apps which are very user friendly and make it simple for you to file your return online, absolutely paperless.
Option 3- Thru Tax Return Preparers (TRPs). Income Tax dept has certified professionals who specialize in income tax filing and their services can be availed at very low fee. They bring professional expertise, deep knowledge of the subject & updates on income tax laws. They are your income tax advisors.
Option 4 – Taking the services of Chartered Accountants. The CAs who are practicing offer services on not just tax filing but entire management of income tax and even advise on litigation matters. If you are looking for best taxation consultants then CAs are undoubtedly the best tax advisors to connect.
What is the difference between Financial Year & Assessment year in Income Tax ?
In your income tax returns you find both the terms Financial year & Assessment Year. Financial year is the year ( 1st April to 31st March) during which you earned an income. Assessment Year ( 1st April to 31st March) is the year during which the income of the previous year is being assessed or evaluation for tax filing purposes. For example, if you earn some income X during the financial year 2015-16 it means the income which was earned by you during 1st April 2015 to 31st March 2016 and when next year you are supposed to file the returns it becomes your assessment year - 1st April 2016 to 31st March 2017.
How does a Tax Advisor help me?
Income tax laws are ever changing and every budget session brings some or the other surprises on tax slabs, tax filing & laws. This all leads to complication and you get to a point where income tax starts looking like a difficult project to you. A tax consultant in this case brings you the much required relief and answers all your queries on taxation.