By INCOMEINSPIRE

09/05/2014 As mentioned earlier, Income Tax is a fees we pay the Govt out of our income for using the resources of the country. In India the tax on income is governed by Income tax Act 1961. We should be paying tax if our Taxable Income exceed the basic exemption limit (which is currently at 2.5 Lakhs for non senior citizens, 3 Lakhs for senior citizens aged between 60-80, 5 Lakhs for senior citizens aged 80 and above). Taxable Income is nothing but the total income earned from all the heads (salaries, business or profession, house property, Capital Gains and other sources) reduced by the tax deductions like 80C, 80D, 80E etc. If the resulting income is more than the basic exemptions mentioned above. The tax rate would depend on the Tax Slabs. You can use our tax calculator to calculate the tax to be paid. Once you calculate your tax and pay it, you should be filing your Tax Returns. Tax Returns are nothing but an affidavit you submit to the government about your Taxable income, the tax on such income and the proof that such tax has been paid. Tax returns can either be filed online (Efiling) or physically. Efiling is a filing the returns online where as Physical filing is filing the tax returns across the counter in the income tax office. Efiling is mandatory for individuals holding assets abroad and also for individuals having income more than 10 lakhs. Why to file an Income Tax Return: Though many usually do not file their Income Tax Return following are few reasons why you should file your return. 1. You won’t be able to carry forward your losses unless you file your returns in time. 2. It might happen your employer might have deducted more tax and you can’t claim the refund of such tax unless you file your return. 3. A penalty of Rs 5000 could be levied if you don’t file your returns along with interest u/s 234a, 234b, 234c 4. Tax Returns are mandatory for VISA processing. 5. Filing a Tax Return would facilitate easy processing of Loans, credit cards etc. 6. Would act as a proof for your income. Benefits of E-filing your Tax Return: Now that you understood the importance of filing your Tax return, its time you understand the benefits of Efiling your return. 1. Saves Time: Is time saving as it reduces the time for preparation, going to the income tax department and filing the return across the counter. 2. Accurate: Is more accurate as the calculations are done by the software and not manually which removes the human errors. All errors are highlighted which would make the return more accurate. 3. Comfort of your own house: You can file your returns online from the comfort of your house, as efiling can be done from any place and at any time.

4. Data available for future reference: once you file your return online, your data would be stored in the income tax dept website, and you would also get a mail containing your ITR-V, which you can view at a later time.