Tax returns for a lot of people seem like a daunting task. However, if you have the right expertise to back you up, then it can be a rather simple task. This blog will look at three things that you should keep in mind when filing income tax returns in 2021.
Every year, the Income Tax Department makes changes to the tax-filing procedure and tax forms. It is critical for a taxpayer to be aware of these developments in order to complete a tax return that is free of errors (ITR).
The ITR forms for AY 2022 have been released, and the ITR filing date has been extended till September 30,2021. However, it is advisable to begin tax preparation now and file the ITR as soon as possible. It will not only speed up the processing of tax returns, but it will also lower your possibilities of making mistakes.
Before you get started, there are a few things to consider.
- New vs old tax regime:
- Dates are extended, however there is no tax relief:
- Changes in tax forms:
In the Budget 2020 we saw the introduction of a new optional tax regime by the government. From FY2021 onwards, individual taxpayers have the option to choose between the old tax regime and the new tax regime.
The new regime offers a lower slab rate of taxation, but the taxpayer will have to forego a number of deductions and exemptions that were previously accessible.
It is normally recommended that the taxpayer select the regime at the start of the year. If you were unable to make the planned investments or expenses for which you could claim a tax deduction under the previous regime, you can move to the new one if it results in a lower tax burden for you.
This is especially important for business owners. Business owners should choose the right regime carefully because it can only be changed once.
Salaried individuals, on the other hand, can change it every year based on their pay, house property, and other sources of income.
The deadline for filing an ITR has been extended until September 30th. It does not, however, provide any relief from the tax liability. If you have advance tax due, you may be required to pay penalty interest on it. it is advisable to pay the tax as soon as possible and file the ITR.
This year, the eligibility criteria for ITR 1, which is commonly used by salaried taxpayers, have been updated. A person who has had tax deducted at source (TDS) deducted for a cash withdrawal under Section 194N, or employees who have deferred tax on employee stock options (ESOPs) received from their company, cannot file ITR 1. As a result, select the form while keeping these changes in mind.
We hope that you found this article about filing tax returns helpful. As you know, it is important to file your tax return and it is your responsibility to do so.
If you have any questions, please contact your tax professional. Or feel free to reach out to us at File My Income Tax or write to us at firstname.lastname@example.org We would love to assist you in any way we can.