“The hardest thing in the world to understand is the income tax” ~Albert Einstein
This bang on assessment on income tax by Einstein was made decades ago; but it still holds true. For majority of us, the mere mention of the word ‘tax’ is enough to trigger a headache and an avalanche of stress.
According to wikipedia, a tax is a financial charge or other levy imposed upon a taxpayer by a state to fund various public expenditures.
Purpose of tax is to raise revenue to fund government to carry out expenses on economic infrastructure, military, scientific research, public work like construction of roads and bridges, public utilities like maintaining of law and order and operation of government itself. Tax is also the main source of government revenue needed for developmental and welfare programs like free education and mid day meal schemes for poor and assured employment plans.
Thus income tax filing is an important duty of all the citizens who come in the tax paying category. It is our duty towards our nation. The importance of income tax can not be emphasized enough as it is the powerful force which drives the economic growth of the nation and helps in creating more jobs which is the urgent need right now for youth of India. It is also a barometer for progress of a country as rising income tax shows a corresponding growth in income.
Still, only about 4% of the population pays taxes, according to the income tax department records. Some factors to be considered here are- that 60% of the population is excluded as they are into agriculture. Out of the remaining, certain percentage of the citizens doesn’t fall into the tax bracket. Also, a large percentage of those who fall in taxable bracket, don’t pay their taxes regularly or timely. Some deem it as an unnecessary, unimportant, time consuming burden. All this results in tax base remaining low in our country, resulting in lack of revenues for the authorities.
Thus, it is necessary for those who come in tax paying bracket to do their duty by filing tax returns regularly and timely and also encourage others in their family and friend circle to do the same. This way the tax base can be increased which will be advantageous to the nation as a whole.
Also, our job does not end at just paying the taxes, filing returns is an equally important activity so that details of all income sources including salary, interest rent earned etc can be specified and appropriately taxed.
Some personal benefits of filing income tax return are:
- It is highly useful in your financial life. It comes handy for sanctions of loans be it for your dream house, vehicle or higher education.
- Opening bank account, trading in stocks or making any other investment becomes easy for you if you have income tax return statement.
- It can be used as your standard income proof.
- It becomes easy to obtain a visa for foreign travel as most countries want to cross check if you are financially sound before granting visa. In such cases, income tax return can effectively prove your financial worth and sound status.
- Financial portfolio planning becomes easy, which can lead to maximized returns.
- There are good chances of getting a refund of extra tax paid by you if you file the ITR.
Income tax department of India has taken several measures to make the process of tax filing easy, quick and hassle free by adopting informational technology. ITR can be easily filed online by registering on the income tax India website from anywhere, anytime. Several services have recently been upgraded and a user friendly grievance mechanism has been put in place for the benefit of tax payers.
E-filing of income tax return is the best option as it is:
- Faster and easier-It is very simple, convenient and quick to file ITR online. E-filing transfers your tax return documents instantaneously to income tax department. It gets filed in timely manner without any undue hurry when the deadline approaches. It is completely DIY (do it yourself) with easy steps to follow and it can be done from anywhere at your convenient time through your computer, tablet or smartphone.
- It is non time consuming– you don’t need to travel long distances in heavy traffic to tax offices or your financial advises’s office. There is no need to stand in long queues . If you submit your tax return online on regular basis, the statement comes pre-filled with earlier information like salary details, investments, fixed revenue sources. You can then file it with a few clicks in a couple of minutes, thus saving lot of valuable time.
- It is secure and completely confidential- the information is guarded through high grade encryption system. There is no chance of the important tax documents getting misplaced, lost or forgotten unlike the traditional paper based system.
- E-filing is cost effective and free – you don’t need to pay heavy fees to get your documents prepared and submitted by professionals.
- It is more accurate– the online site is always accessible from anywhere. You can check your information and make changes as many times as you want before final submission. You can double check the details like PAN number, bank account numbers and address. So, there is almost no chance of wrong info related to name, income, address etc.
- Tax estimation can be calculated easily and accurately – taxable income, tax dues can be easily calculated. You can thus find optimum plans to maximize deductions which will lower your taxable income by great margin, which puts you into a lower tax bracket, helping you save a big amount.
- Tax refund of excess tax is fast and completely hassle free- you can get tax refund directly into your bank account, often within a month if you file tax return online.
- You can view your tax credit and file it online from any part of the world at your convenient time. You can even track the processing status in real time.
Some documents to keep handy while e-filing your tax return:
- Form 16- This is your tax credit statement as well as your salary certificate. It has two parts- part A (contains TDS details from your salary )and part B( contains salary details like allowances, basic salary, deductions under chapter vi A etc.) You can upload your form 16 directly or fill it manually making sure you don’t miss out on any info.
- Tax credit statement 26 A – Form 26 A contains details of -tax deducted from tax payers income,tax collected,advance tax etc.
- Investment details- details of ASF, NSC, ULIP, UTI, PPF, Equity saving schemes, ELSS etc.
- Interest income details- interest earned on saving bank account, PPF account, FD etc.
- Medical or life insurance details-The premium you pay for these are allowed as deduction from your income.
- Bank account details- It is compulsory to mention all your active bank accounts as on date of e-filing the tax return. Details like account number, IFSC of your bank branch and type of account should be provided.
Over all, e-filing is not a difficult task, but if you need assistance in filing your tax return electronically, there are tax-expert platforms like H&R Block to help you. They have experienced and expert professionals on their panel who can guide you at each step and are available on chat to solve all your queries. H&R Block – the largest tax filer in the world which has the experience of serving 2.5 crore clients worldwide, has tied up with 300+ corporates in India and e-filed more than 3 lakh returns with customer score of 9/10.
Their in depth knowledge is also a great advantage to individuals with capital gains, dual taxation, ESOP workings, global income,sale of foreign shares, and many similar complicated issues. They also provide year long access to your adviser, your account page and documents that help in planning taxes in better way with guarantee of accuracy and confidentiality.
So, let us all take a #taxpledge to regularly and timely file our income tax returns. Hope this initiative by blogadda and H&R Block truly acts as a wake up call for everyone and we all take a much needed step forward in becoming worthy citizens of our great nation.
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