First-Time ITR Filer in 2023-24?

Essential ITR Filing Tips for New Taxpayers:

There will be more than 53 lakh first-time ITR filers in the financial year 2023-24, which is excellent news, and chances are that you are also one of them.

Filing ITR feels like an achievement as it shows that you’ve entered a new life phase and can contribute to nation-building. From the outside, we all are proud and excited, but we all can agree that we are equally nervous and confused in our minds. The financial terminologies scare the majority of us, and filing online ITR feels like climbing a mountain.

No need to worry; here are some essential tips that will help newbies file ITR like a pro. Filing ITR is way easier and simpler if you follow these tips:

1. Get the basics right

It is a human tendency that we feel we know a lot, but in reality, we know way less than we think. Forget taxes, most people don’t even know how zip’s work. So, if you want a stress-free ITR filing experience, start with the basics because if you get this wrong, the journey ahead could be quite intimidating.

The first question that comes to everyone’s mind is when is the last date to file ITR? Remember, the last date to complete the ITR is 31st July 2024. Don’t wait till the last date to fill ITR.

If you have a partnership firm that doesn’t require an audit, the last filing date will also be 31st July, but the ITR filing date for a partnership firm, which requires an audit, is 31st October, so keep it in mind.

Another basic information that you need to remember is that the ITR is filed through the official government website. So don’t click on any malicious website to file ITR.

2. Get all the Documents Ready

If you’re filing ITR for the first time, make sure you have all the required documents near you. Most people start filing the ITR form and then realize they don’t have a vital document. Proper preparation of documents will make the filing process more manageable and also create less confusion.

The exact documents needed for ITR filing can vary according to your income sources and deductions claimed. Here’s the list of general documents that you must have with yourself before the ITR filing date 2023-24 goes by:

PAN Card: One of the most crucial documents needed for ITR filing. 

Aadhaar Card: It is mainly used for the E-verification process.

Form 16: A vital document to file ITR by a salaried individual. It is provided by your employer. 

Form 16A/ Form 16B/ Form 16C: Form 16A is issued for TDS deducted on payments other than salaries like fixed deposits, recurring deposits, etc. Form 16B is issued for the sale of property. Form 16C reflects the TDS on rent. 

Bank Account Details: When filing an ITR, you must disclose all your active bank details. So keep all the bank details near you.

Bank Statement: ITR filing requires information like interest earned on a savings account, and we can find these details on the Bank statement. 

Home Loan Statement: If you claim deductions for home loan repayments, gather the statement showing principal and interest components.

Form 26AS/AIS/TIS: These comprehensive reports consolidate all TDS/TCS/interest information linked to your PAN, ensuring accuracy and completeness.

Foreign Income Documents: For individuals with foreign income, relevant documents (consult a tax advisor for specific requirements) may be needed to claim tax credits and benefits under Double Taxation Avoidance Agreements (DTAAs).

Dividend Income Documentation: Broker statements or Demat summaries detailing dividend income earned during the year are required for accurate reporting.

3. File ITR Online

Online ITR filing in India is hands down the best way to file an income tax return. If you are still relying on manual ITR filing in this digital era, it’s time to upgrade as online ITR filing will save you tons of time and money.

Choose what you want for yourself, with a few clicks and online income tax return filing done or loads of irritating paperwork and documentation.

4. Take Eligible Tax Deductions

Will you ever leave money on the table? The answer is a huge NO, so why don’t you take the tax deductions you are entitled to? While filing the ITR, don’t be in a hurry. Take your time to know about the tax deductions you are entitled to.

A little bit of research about taxes and deductions can help you save a lot in direct taxes.

5. Don’t Procrastinate

You are not the only one procrastinating about ITR filing, as the majority of people delay the ITR filing process. Although it may feel basic, people still wait for the ITR filing date of 2023 extended.

Make ITR filing your priority, as any delay in ITR filing will lead you to pay penalties, and no one likes paying penalties.

Don’t want to commit more mistakes while filing ITR? Here are the 28 common ITR filing mistakes that people commit.

6. Ask for Advice

There is no shame in asking for financial advice if you can’t figure out how to file an ITR. A lot of people take it to their ego that they can file taxes on their own and end up committing blunders.

Yes, there are a lot of resources that help you file ITR on your own, but if you are struggling, taking advice from a financial consultant or CA is the best decision.

Tip- Don’t take advice from people who aren’t professionals in the field, as their advice will be without any solid proof or fact, and it can cost you a lot.

7. Double-Check Details

One basic rule of thumb while filing an income tax return is that you should double-check every single detail, no matter how basic it is. Even though it might feel a bit overprotective, it is way better than filing incorrect information and delaying the filing process.

Filing inaccurate details in the income tax return filing process can create a lot of complications in the return filing, so it is advised to be extra cautious.

8. Don’t forget E-verification

We feel the job is done when we have successfully filed our returns, but there is more to it. We also need to do an E-verification of the ITR within 102 days of filing, or our ITR will be considered invalid. 

E-verification is a crucial part that confirms the authenticity of your ITR. You won’t get any potential refunds if you don’t complete the E-verification process on time. 

Not only this but completing the E-verification after the allotted period will result in penalties. 

Conclusion

With the above tips, you can have a stress-free and smooth ITR filing experience. The key is not to commit basic mistakes and always keep the learning phase open. But remember to take financial advice only from professionals, not armchair experts.

What are the tips that have helped you file ITR swiftly? Let me know in the comments.

Frequently Asked Questions

1. Who is considered a first-time income tax return (ITR) filer?

A first-time ITR filer is an individual who is filing their income tax return for the first time in a particular assessment year, i.e., they have never filed an income tax return before.

2. Why is it necessary to file an income tax return?

Filing an income tax return is mandatory for individuals whose total income exceeds the taxable threshold set by the government. It helps in declaring your income, claiming deductions, and ensuring compliance with tax laws.

3. What documents are required for filing the income tax return as a first-time filer?

Documents required may include:

PAN (Permanent Account Number) card

Aadhaar card

Form 16 (if employed)

Bank statements

Investment proofs (e.g., LIC, PPF, etc.)

Rent receipts (if applicable)

Details of any other income sources

4. Which ITR form should a first-time filer use?

The choice of the ITR form depends on the sources of income. Generally, for salaried individuals with no business income, ITR-1 (Sahaj) is applicable. However, individuals with income from other sources like house property, capital gains, etc., may need to file using different ITR forms such as ITR-2 or ITR-3.

5. How to file the income tax return for the first time?

There are two primary methods:

Online filing: Through the Income Tax Department's e-filing portal using your Aadhaar number or by generating an electronic verification code (EVC).

Offline filing: By submitting a physical copy of the filled ITR form to the nearest Income Tax Office.

6. Are there any penalties for not filing the income tax return?

Yes, if you are liable to file an income tax return but fail to do so, you may be subject to penalties and legal consequences, including fines and prosecution.

7. What if I make a mistake while filing the income tax return?

If you realize you've made a mistake after filing your return, you can rectify it by filing a revised return within the specified time frame.

8. How can I track the status of my filed income tax return?

You can track the status of your filed return online through the Income Tax Department's e-filing portal using your PAN and acknowledgement number.

9. Is it necessary to keep records of income tax returns filed?

Yes, it is essential to maintain copies of filed income tax returns and supporting documents for at least six years from the end of the relevant assessment year. These records may be required for future references, audits, or assessments.

10. Can I seek professional help for filing my income tax return?

Yes, you can seek assistance from chartered accountants or tax professionals who specialize in tax matters to ensure accurate and timely filing of your income tax return, especially if you find the process complex or have multiple sources of income.

Remember, filing income tax returns is not just a legal obligation but also a civic responsibility that contributes to the nation's development by ensuring the collection of revenue for public welfare initiatives.