File tax returns on time to avoid unnecessary hassles

It’s the tax season. Here are a few tips to ensure an error-free tax filing process.

File your returns

There is a misconception among some salaried individuals that because the employer has deducted tax at source they are not required to file returns. Even though tax has been deducted and there is no other source of income, or liability to pay tax, employees have to file income-tax returns. Every individual has to necessarily file the returns if the total income, before allowing any deduction, exceeds the exemption limit.

Even if your income is below the exemption limit, which is bound to happen at the beginning of one’s career, filing returns will help in the documentation process if you are taking a loan or an insurance policy or when you are applying for a visa.

Pick the correct form

There are different Indian Income Tax Return (ITR) forms. Depending on the various streams of income you have, you have to select the form accordingly. Make sure you select an appropriate form after taking into consideration the flow of income from various streams.

Disclose exempt income

Income such as dividend received on mutual funds and long-term capital gains on securities are exempt from tax. However, tax laws require you to report the same in your tax returns even though you do not have to pay any tax on them.

Annual information return

While filing income tax returns, it is essential to disclose any significant investments made during the

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