Income tax is a tax that is paid on any form of income earned by someone, including salaries, return on investments, profits from your business, etc. Everyone who has some sort of income will have to file their income tax return for the financial year by a certain date.
The money collected from income tax is used by governments for various developmental projects for the benefit of everyone in the country. It is important that you file the returns on time in order to avoid the risk of paying a penalty.
Here are a few things about income tax returns that will make it easier for you to understand and file the same:
1. Know How Much Tax you have to pay
The amount of tax you will have to pay depends on a number of factors including whether or not you are a citizen of the country, the number of jobs you have, etc. The most important factor is the total amount of income you earn.In most countries, there is a progressive tax system where one has to pay more if they earn more. There are different tax slabs for different income groups and people have to file their income tax return according to the income category that they fall into.
You need to total your income and see if you are earning more than the exemption amount. If yes, check which group you belong to and the amount of tax you have to pay for your income on the official website of the tax-collecting agency.
2. Know whether or not you need to file taxes
If you are an employee in a company, income tax is probably being automatically deducted by your employer, and money you receive in the bank each month is your salary after tax deduction. There are several jobs where this is not the case and the entire salary is received by employees.In any case, you will have to file an annual income tax return without fail. It is compulsory for any person who is earning above the exempted income to pay income tax and file a return annually.
3. Check if you are eligible for deductions
While recording your income in the income tax returns, you can request deductions in the income tax that you have to pay if you have spent money for certain work-related activities throughout the year.There are several reasons for an individual to be offered tax deductions. Make sure that you go through the list of things that make you eligible to request deductions in your income tax on the official website of the tax collection agency.
You should have proper documentation and receipts with you to provide proof whenever it is asked for. If you don't have proper proof, you might not be eligible for the deduction and will end up paying the full tax amount for your income.
4. You should hire a consultant
Filing an income tax return can get extremely complicated if you are new to the process because of the various intricate protocols that are required to be followed. It would be a bit difficult for you to file your tax return properly while keeping in mind the various deductions you are eligible for and the several things that you need to include in your returns.In case you miss something important, you might have to pay a penalty. To avoid this, it is better that you hire a consultant. Taxopia will help guide you through the process of filing your income tax returns.
They have assisted hundreds of people in doing so and ensuring that there is no error in their documents and also help you avail all deductions that they are eligible for. Make sure that you get in touch with Taxopia before you begin filing your income tax returns.
Filing income tax returns is an important duty of every citizen and you need to be aware of the several things that are required of you when filing it. Keeping the points mentioned above in mind will help make the process simpler for you.
