How to Prepare a Tax Return
An income tax return is a message from the taxpayer to the Income Tax Department alerting the department of the taxpayer’s financial information. The information is provided for each financial year and includes numbers such as the taxpayer’s taxable income and tax liability. Depending on the type of taxpayer, different forms are used to file income tax returns. When a taxpayer’s taxable income exceeds the basic exemption limit, he or she must file an income tax return. The basic exemption limit is the amount of money that is not subject to income tax. A taxpayer submits information regarding taxable income and its source, appropriate deductions. And the amount of tax due to the government by completing income tax forms. In this post, we’ll look at how to file an income tax return and the different options you have for doing so.
Also Read: Income Tax Return Filing
Total Income Calculation
Taxpayers can think of total income as the total amount of money earned over the course of a fiscal year. However, according to the Income Tax Act, gross total income must be calculated by adding all of the following types of income:
- Salaries are a source of income.
- Income or deemed income derived from a residential property
- Profit generated by a business
- Gains in capital
- Additional revenue derived from other sources.
How to Complete Tax Returns
You can file a physical income tax return (by submitting an income tax form) or an electronic income tax return. The majority of taxpayers will not be able to file their tax returns manually. All such taxpayers must file their income tax returns only through online registration.
Manually submitting a tax return
Individuals who meet specific requirements can file their tax returns in paper format. The individual can prepare and file the return in person at an Income Tax Office. Taxpayers with salary income and up to one residential property can submit ITR-1 SAHAJ. To manually file an income tax return, the taxpayer must fulfil the requirements listed below:
- The taxpayer is 80 years old or older throughout the fiscal year.
- The taxpayer’s total gross income is less than five lakhs, and there is no income tax refund claim.
Income Tax Return Verification
- Verification or substantiation of an income tax return entails demonstrating to the IRS that the return filed by or on behalf of the taxpayer was only posted to the IRS website after the taxpayer gave his or her authorization. The verification allows the department to ensure that the information in the return is provided to the best of the taxpayer’s knowledge.
- An income tax return can be verified online or by attaching an ITR-V form as an attachment. Attesting the applicant’s signature in a tangible or digital format serves as confirmation. Filing an income tax return with a digital signature does not necessitate any verification on the part of the applicant; however, using the physical mode does necessitate verification on the part of the applicant. The tax filing process will remain unfinished if the applicant does not verify the ITR-V form. Therefore, verification must be carried out as soon as the tax return is submitted.
- When it comes to online verification of the income tax return form submitted at the time of uploading the file, the applicant has several possibilities. If the taxpayer’s taxable income is less than Rs.5 lakhs and the refund amount is less than Rs.100. An email and phone number can also be utilised. In other circumstances, an OTP must be generated using an Aadhar Card. The taxpayer must ensure that the cellphone number listed on the Aadhar card is in an active connection status in order for the Aadhar-based OTP procedure to work.
Suggested Read: Income Tax Notice