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As the income tax deadline draws near scheduled to be on March 31st, taxpayers are strongly advised to take some important steps to ensure a hassle free experience. From linking the Aadhar card with the PAN card to filing income tax returns and reviewing investment proofs, an individual must follow the following steps to ensure a smooth experience.
Link Aadhaar with PAN:
One of the most important tasks that the taxpayers’ should do is to link their Aadhaar cards with their PAN (Permanent Account Number). This holds significant importance as mandated by the Income Tax Department’s guidelines. Not only does this smoothens the tax filing process, but it also ensures compliance with regulatory requirements.
File Income Tax Returns (ITR):
Filing income tax returns is a foremost obligation for all taxpayers. The accuracy in reporting income, deductions, and tax liabilities is paramount to avoid penalties or any ensuing legal repercussions. Timely and meticulous filing is important to avoid any legal troubles later on.
Claim Tax Deductions:
Taxpayers should go through the various sections of the Income Tax Act to ensure the full utilization of all eligible tax deductions and exemptions. These encompass deductions for investments in instruments such as Provident Fund (PF), Public Provident Fund (PPF), Life Insurance Premiums, among others.
Pay Remaining Tax Liability:
It is important for taxpayers to pay any remaining tax liability well before the deadline to avoid any problems later on. This ensures the avoidance of interest charges and penalties that may arise due to late payments.
Invest in Tax-Saving Instruments:
People can invest in tax-saving instruments. Options such as Equity Linked Savings Schemes (ELSS), National Pension System (NPS), or tax-saving fixed deposits can maximize deductions under Section 80C, offering significant tax benefits.
Submit Investment Proof:
Taxpayers who have engaged in investments during the financial year are obligated to provide proof of these investments to their respective employers or the Income Tax Department. The providing of these documents like investment certificates, receipts, or statements, ensures compliance with regulatory stipulations.
Review Form 26AS:
Form 26AS serves as a comprehensive statement detailing tax deducted at source (TDS), advance tax payments, and other tax credits available to the taxpayer. A meticulous review of Form 26AS should be done to ensure the accuracy of tax credits claimed while filing returns.
File Revised Returns:
In instances where errors or omissions are identified in the original tax return filed, taxpayers possess the right to rectify them by filing revised returns. It is important to prevent penalties by tax authorities.
Check for Tax Notices:
Regular monitoring of the Income Tax Department’s online portal is imperative to stay tuned of any communication or notices pertaining to tax filings.
Why should we file taxes early?
Faster Refund Process: As refunds are processed on a first-come, first-served basis, filing taxes early ensures a quicker access to funds.
Making the Most out of loses: Timely filing enables taxpayers to carry forward losses, helping to leverage them to offset future income and maximizing tax benefits.
Avoid Legal Repercussions: Early filing of taxes helps avoid notices and penalties from the Income Tax Department.
Maintains Financial Stability: Early filing produces a sense of financial security and stability by avoiding the uncertainties and last-minute rush.
Additional benefits: It helps in the establishment of a robust financial record, which can prove advantageous in diverse financial transactions such as loan applications, visa processes, or other monetary endeavors.
The completion of these tasks prior to the income tax deadline ensures a seamless tax filing process. It not only avoids penalties and scrutiny from the Income Tax Department but also ensure peace of mind by avoiding last minute rush.
The article has been modified using artificial intelligence (AI) tools.
