Wondering what is income tax and how does it act? Income tax in India is a tax returned by people or entities depending on the level of gains or earnings during a financial year.
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What is E Filing?
E-filing or electronic filing is completing or filing your income tax returns online. There are two ways to register or file your income tax returns. The common way is the offline way, where you go to the Income Tax Department’s location office to physically file your returns. The other way is when you e-file your tax is through the internet. Over the past few years, e-filing has become successful because it is more comfortable, and doesn’t demand prints of documents, and can be made for free!
Income Tax E-Filing method
- The most comfortable choice for first-time e-filers.
- This platform automatically recognises the ITR you need to file based on your income sources.
- Further, upload your Form 16 into your income tax return online portal.
- You can register your return immediately from the portal without logging into the income tax website.
- Valuable tips to help you with filling up the information.
Benefits of filing income tax return online
- Prompt processing
Statement of Income Tax Return (ITR) is quick and responsive. More importantly, discounts, refunds if any, are prepared faster than paper-filed returns.
- Better precision
E-filing software with built-in validations and automatic or electronic connectivity is easy, simple and reduces errors considerably. Paper-filings can be inclined to errors. Moreover, when any paper-based form is transferred to the electronic system, there is a chance of human error in data entry.
No time and place restriction in filing returns online. Further, E-filing facility is accessible 24/7 and you can register anytime, anywhere at your preference and availability.
Better protection than paper filings since your information is not available to anyone either by chance or by design. With paper filings, features of your income can drop in the incorrect hands at your chartered accountant’s office or in the Income Tax (IT) Department’s office.
- Convenience to past data
You can quickly obtain past data while registering your returns. Most of the e-filing applications securely store data and provide for easy access at the time of filing subsequent returns.
- Confirmation of receipt
You will get immediate approval of filing, both at time of filing and consequently, through email on your registered email id.
- Ease of use
E-filing is beneficial and the specific guidance makes it simple even for people not very conversant with the internet.
- Electronic banking
The benefit of direct deposit for a refund and direct debit for tax returns. You have the option to file now, pay later – choose what day to debit your bank account for a tax return, amongst other convenience features.
Why is income tax filing important?
Whether you are a citizen of Indian or an NRI, registering or filing an income tax return is mandatory, if your total Indian income tops Rs 2.5 lakh.
Even if you don’t reach this threshold, it’s a great practice to file or e-file your income tax return filing online. An income tax return is an essential document you must provide at the time of availing a housing loan, as it indicates your business discipline and success as well as shows your ability to reimburse a loan.
If you are thinking of going abroad for higher education, or are about to take up a project or business outside of India, you’ll need at least three years’ filed in-come tax returns to display as proof of in-come. Hence, people preparing your visa application may demand your ITR documents to assess your financial well-being, which in return determines that you can promote yourself on your own in their country.
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