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Income tax return filing date is round the corner, Are you ready?
For the financial year 2019-2020, the government has once again extended the deadline for filing Income Tax Returns to December 31, 2020, from the earlier deadline of November 30, 2020. Previously the usual deadline to file Income Tax Returns was July 31, 2020. Every individual whose annual income is above the taxable limit of Rs. 2.5 Lakhs is required to file ITR before the deadline. Further, for taxpayers who are required to furnish a report for international & specific domestic transactions and had to file these reports till November 31, 2020, previously, can now do the same till January 31 2021.
Like every other time, if you are struggling with pulling together all your records, here is what you need to do if you want to avoid any last-minute hassle.
Choosing your best alternatives
Well, it’s time you make the best of your decisions to claim maximum tax deductions against your income.
Income Tax Deductions & Exemptions
- Sec 80 C- Maximum ₹ 1,50,000 (aggregate of 80C, 80CCC and 80CCD) for investments such as PPF, EPF, Bank FD’s, NSC, LIC premium, tuition fees.
- Sec 80 CCC- Maximum ₹ 1,50,000 (aggregate of 80C, 80CCC and 80CCD) for pension funds.
- 80CCD- Maximum ₹ 1,50,000 (aggregate of 80C, 80CCC and 80CCD) for pension funds initiated by the central government.
- 80TTA- Up to ₹ 10,000 per year for Interest on the bank savings account.
- 80CCG- 50% of the amount invested subject maximum of ₹ 25,000 on Equity saving schemes.
- 80CCF- Up to ₹ 20,000 for long term infrastructure bonds
- 80D- For individual taxpayers premium of medical insurance up to ₹ 25,000 in case of individuals and up to ₹ 50,000 for senior citizens. For HUFs premium up to ₹ 25,000 and up to ₹ 50,000 in case the member insured is a senior citizen or super senior citizen.
- 80E- No limit for Interest on education loan.
- 80EE- Upto ₹ 50,000 for Interest on loan payable for acquiring a residential house property.
- 80G- Vary as per the donation amount for General donations of any recognized society
- 80GGA- Based on the quantum of donation for donations related to scientific research or rural development.
- 80GGB- Depends on the quantum of donation for donations to political parties.
- 80GG-₹ 5,000 per month or 25% of total income whichever is less for rent paid if HRA is not received.
Do you know some incomes are tax-free?
As you gear up to collect documents, check out if you have any income which is not taxable?
- If you have any income that you earn from agricultural activities including poultry, cattle farming etc. can be claimed as income tax exemption under Sec 10(1) of the Income Tax Act.
- Any gifts received under Sec 56(ii) of the Income Tax Act is exempted for the following:
- Gifts received from relatives.
- Gifts received on the occasion of marriage.
- If the aggregate value of the gifts received from a person other than the relatives is less than ₹ 50,000.
- If you have received LTA( Leave Travel Allowance) from your employer the same can be claimed for tax exemption for two journeys in a block of 4 years.
- Academic Scholarships received to meet the educational expenses are also exempted from tax.
- Interest earned from savings schemes such as EPF & PPF is also tax-free.
File your Income Tax Online & save your time!
Along with knowing about tax deductions & exemptions, you must be ready with a complete list of documents for filing your returns.
Checklist of documents you need for filing Income Tax Returns
- PAN number
- Income Tax Return (Previous Year)
- Bank Statements ( All accounts)
- Form 16, Form 16 A
- Form 26 AS
- Home Loan Tax Deduction Certificate (If applicable)
- Receipts of tax-saving instruments such as PPF, EPF, NPS, ELSS
- Details of tax-free income
- Annual Statements for mutual funds & other trading accounts
- Receipts for Advance Tax or Self -Assessment( If Applicable)
Are you still confused about choosing an old & new tax regime?
- New tax slabs offer a reduction in applicable tax rate from 20% to 10% and from 30% to 20% in some cases.
- If your annual income falls above the bracket of Rs. 15 lakhs, you may have to forgo 70 exemptions, including house rent allowance, medical insurance premium, and travel allowance if you opt for a new tax regime.
- The tax benefits on paying life insurance premiums are not exempted from tax under the new tax regime.
Taxation in India
- Under the new regime employer’s contribution will be exempted from tax if an employer contribution to EPF and NPS is equal to or less than Rs. 7.5 lakhs in a financial year.
It is thus significant that you prepare well in advance and collect all the necessary information and documents required for filing Income Tax Returns before the filing date to avoid last-minute panic and confusion.