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Friday, July 19, 2013

How to file income tax returns online in India?

There are many rules and regulations when it comes to paying tax in India. One cannot be aware of all such rules. Earlier the process of filling of tax returns was quite a tedious job. But now with the advent of the internet, every individual can file their own tax return. This has been promoted by the Government of India as agents charge unnecessary fees for filing of returns.

Tax returns can be filed by all those people who are residents and living in India. The source of income has to be in India in the form of rupees. However for the NRI living abroad there is some other tax laws that you might need to get through before you file your return. You should know about all the exemptions. If you find them complicated then you can take the help of a CA or accountant.

The basic requirement for filing any tax return is the existence of a valid PAN card. PAN stands for Permanent Account Number. If you don’t have a PAN it can be applied for online itself with the process being very simple.

There are some laws that are needed to be remembered in case an NRI is filing a tax return in India.
1.    You are taxed only on the income that is earned in India. This law is only applicable to India and may vary for a different country. So if you are someone resident in country X you might have to pay tax for income earned in country Y.

2.    You need to find out if your resident country has a DTAA with India. DTAA stands for Double Tax Avoidance Agreement. If it’s a yes then you are eligible for tax concessions.

3.    If your total income is less than the prescribed limit then you need not pay any tax. However there are some exemptions to this clause. Make sure you have them all covered and red carefully.

4.    Continuing with the above point even if your income is below the limit, you will need to pay tax if you have income from capital gains. An example of such capital gains is income from equity shares. For short terms capital gains the tax deduction takes place later but in term of long term capital gains tax deduction takes place at source.

5.    You will need to pay taxes if you income is above the prescribed limit. Such income is calculated from immobile property, wealth gains and other revenue in India.

6.    Inheriting property in India does not incur taxes but any form of incomes such as rent will draw taxes.

So how does one go about filing for online filing of tax returns? Below are the steps one needs to follow. (For An NRI)
1.    Obtain your PAN card online with the help of a brokerage firm.(
2.    In the second step you will need to choose the form to file your tax return for. They are
i)     ITR 1 – For all those who have income from salary, pension, interest or agricultural activities.
ii)    ITR 2 – For all those who are not earning from profession or business.
iii)   ITR 3 – for partners in the same firm
iv)   ITR 4 – for those earning from proprietary business or profession.

Fill up the form and you can deposit the same in two methods.
First you can submit them online after attaching your digital signature in it. You can get the digital signature from a designated authority,
Secondly you can physically send the form to the income tax officer.

Tax filing is no longer standing at the accountant desk anymore!

1 comment:

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