Finance Buddy

Income Tax Return (ITR) filing is a must for salaried employees having an annual income above Rs 2.5 lakh. The Income Tax rules have several provisions through which employees can reduce their overall tax outgo. However, it has been observed that many employees fail to make the most of these tax-saving provisions. This article explains five common problems faced by salaried employees and their solutions. Unawareness about available deductions A large number of salaried employees are unaware of the deductions available to them over and above Section 80C of the Income Tax . “Therefore tax planning awareness needs to be created for the following deductions i.e 80CCD(1B)/80D/80E/80EEA/80EEB/80G/80TTA/80TTB/80U to reduce tax liability,” says Sujit Bangar, Founder of Taxbuddy.com . Lesser TDS deducted due to multiple Form 16 Whenever an employee changes his/her job, the employer claims standard deduction and Basic Exemption due to which TDS is less deducted and the employee ends up payi...

  In a bid to ease the process of filing an income tax return (ITR), the Central Board of Direct Taxes (CBDT) has issued a draft proposal to introduce a common ITR form for most taxpayers. The CBDT has proposed to merge all the existing ITR forms except ITR 7. However, the current ITR 1 and ITR 4 will continue. The income taxpayers will get an option to choose which form they want while filing their tax returns — the proposed common ITR form or the existing form (ITR 1 or ITR 4), as per the draft proposal issued by the CBDT on November 1, 2022. At present, taxpayers are required to furnish their income tax returns in form ITR 1 to ITR 7, depending upon the legal classification of the taxpayer and the nature of the income. "The current ITRs are in the form of designated forms wherein the taxpayer is mandatorily required to go through all the schedules, irrespective of the fact whether that particular schedule is applicable or not. This increases the time taken to file the ITRs ...

In a bid to ease the process of filing an income tax return (ITR), the Central Board of Direct Taxes (CBDT) has proposed a common income tax return form that aims to replace six of the seven existing ITR forms — ITR 1 to ITR 6. ITR 7 which is applicable to charitable institutions, business trusts, investment funds, etc. has been kept out of the proposed common ITR form. The taxpayer, however, will have the option to file ITR 1 or ITR 4 (if it applies to him/her) instead of the common ITR form if they want to do so. While CBDT plans to simplify the ITR filing process with the proposed common ITR, frequent changes in the tax return process can be a challenge for thousands of taxpayers. To answer a series of questions that may require detailed knowledge of tax laws lay taxpayers may have to end up paying for a chartered accountant's services. Here are the plus and minus points of the proposed common ITR. Don't have to go through the process of selecting the correct ITR anymo...