4 Things To Remember Before Filing Income Tax Online

Career, personal life, vacations, holiday… these are some common things every individual revolves around. But, when it comes to abiding by the tax compliances and paying your income tax, it should be your first and the foremost objective of your life. With the advent of e-filling process and convenient online platform, it is now no longer a scary task to fill up your income tax returns. However, there are many important points that may confuse many people.

Before you explore the internet to find out how to file income tax returns online, it is necessary to understand the top 5 things related to your tax implications so that nothing appears unfamiliarly.

* Understanding the Component of Your Salary

Your salary includes some important components you should also know about. Some of them may help you save on your taxes as they fall under the section 80c. So, when you start receiving your salary, you should reach out to the human resource department or finance executive to get your salary details, which is also known as pay slip or tax statement. It will help you streamline the process of e-filling ITR online without any difficulty.

* TDS or Tax Deducted At Source:

TDS is the tax that your employer deducts from your remuneration at the time of payment. It is mandatory for every payer to take a particular amount of tax from your salary if your taxable income is more than Rs 2.5 lakh in a year.

Similarly, your bank does also deduct the tax from your income earned from your saving accounts, fixed deposits, and other investment avenues you earn a particular amount of money every month. Banks generally don’t have any idea about your total taxable income, so they usual deduct the taxes at the rate of 10%.

* Standard Deductions

Salaried employees are eligible to get the benefit of standard deductions. This is an additional tax exemption that you can claim in addition to the section 80C. Now the limit of standard deductions has been increased to 50,000 from 40,000 in the interim budget 2019.

* Calculating the Taxes You Have to Pay After TDS

Your final tax amount payable is calculated based on your total income and the tax rates applied to your income. You can understand it more accurately through the following formula:

Final Tax Payable = The Total Taxable Amount – TDS

So, these are some important things that you should be aware of if you are going to e-file income tax returns for the financial year 2019-2020.