Essential Tips for First-Time Taxpayers: Filing Your Income Tax Returns

As the deadline to file Income Tax returns (ITR) approaches on July 31, first-time taxpayers should familiarize themselves with the basics of the process to avoid penalties. Here are 10 key points every beginner should know:

1.Determine Your Total Taxable: Income Include all income sources, such as salary, after accounting for tax-saving deductions.

2. Understand Your Tax Regime: Choose between the old and new tax regimes. The new regime, introduced in 2020, offers lower tax rates but limits certain deductions and exemptions. If no choice is made, the default is the new regime. Evaluate both options to decide what's best for you.

3. Gather Essential Documents: 
   Prepare all necessary documents, including
   - Form 16 from your employer
   - Bank statements
   - Investment proofs for tax-saving investments
   - Rent receipts (for HRA claims)
   - Loan statements (for home loan interest deductions)
   - PAN Card and Aadhaar Card

4. Review Form 26AS: Check this form for a summary of your income and TDS (Tax Deducted at Source) deductions to ensure accurate tax filing.

5. Annual Information Statement (AIS): This statement includes details like interest income, dividends, securities transactions, and foreign remittances, pre-filled for your convenience.

6. Choose the Right ITR Form: Selecting the correct ITR form is crucial for accurate filing. Different forms apply to different types of income and taxpayer categories.

7. Claim Eligible Deductions: Maximize your tax savings by claiming deductions under sections like 80C (up to Rs 1.5 lakh), 80D (health insurance), 80TTA (bank interest), and 80G (donations).

8. Meet the Deadline: File your ITR by July 31 to avoid penalties and interest charges. Check the official Income Tax Department website for any deadline extensions.

9. Opt for E-Filing: The Income Tax Department recommends e-filing through its portal. It's convenient, reduces errors, and first-time filers can follow a guided step-by-step process.

10. Verify Your Return: After filing, verify your ITR within 120 days. This can be done via Aadhaar OTP, net banking, or by sending a signed ITR-V form to the Centralised Processing Centre in Bengaluru.

By following these steps, first-time taxpayers can ensure a smooth and accurate tax filing experience.

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