By Priti Rathi Gupta
In 2010, the Indian government declared July 24 the National Income Tax Day. This is just six days before July 31, which is the last date for filing an income tax return (ITR) which is mandatory for anybody earning over Rs 250,000 annually. On an average, an urban professional falls under the tax bracket right from the beginning of his/her career. Taxes and returns are a critical part of responsible financial management, and hence it is imperative to file a tax return before the due date.
How does an ITR help? Filing an ITR legitimises one's earnings, and in case of excess tax paid to the government, one can always claim a refund. Even though it is not compulsory to file a return if the total income is below taxable limit, it is beneficial to do so. An ITR is the best document of proof of income. The process also makes one eligible for loans, since the ITR of the three years gone is what banks require to judge the pay-back capacity of the loan seeker.
Absence of an ITR can also reduce the chances of getting a visa to travel abroad. ITR also becomes imperative to obtain a high life-cover insurance policy or high-limit credit card. With just about a week to go before the last date, it is best to file the return timely to avoid tax troubles.
Technical jargon and excessive paperwork can make filing an ITR seem tedious, but this is now easier than ever before and merely a few clicks away. To begin with, you need to have a few documents in place -- PAN card, bank account details, Form 16, Form 26AS and proof of investments, which are useful for tax filing. All one needs to do is register on
Tax saving tools: Multiple tools can be used to save income tax every year. For those living away from home, the rent receipt is your biggest tax saver since part of house rent is tax exempt. The other tax saving instruments are: