ITR Filing: Filing return? First, know this IMPORTANT THING through income tax calculator
Income Tax Return Filing: One should find out the income tax allowance being given to an earning individual under the Income Tax Act 1961.
Income Tax Return Filing: Income Tax Return or ITR Filing is one of the most important responsibilities of an earning individual. But, before filing your ITR, you should find out the income tax allowance being given to an earning individual under the Income Tax Act 1961. According to the investment experts, Income Tax Allowance has three parts — taxable, non-taxable and partially taxable income. Therefore, it is advisable to an earning individual to segregate one's income in these three parts using the income tax calculator and then only for the income tax return filing.
Elaborating upon the income tax allowances Jitendra Solanki, a SEBI registered tax and investment expert said, "Income Tax Allowances are given by the recruiter to its employees on the basis of the employee's requirements." The SEBI registered experts went on to add that allowances can be classified into three categories — taxable, non-taxable and partially taxable. Allowances like child education are exempted from any income tax provided the person produces the bill against the variable. Similarly, travel allowances or TA are partially exempted while HRA is 100 per cent taxable.
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According to the official website of the Income Tax Department — incometaxindia.gov.in, "(Income Tax) Allowances are fixed periodic amounts, apart from salary, which is paid by an employer for the purpose of meeting some particular requirements of the employee. E.g., Tiffin allowance, transport allowance, uniform allowance, etc." The website clearly mentions, "Perquisites are benefits received by a person as a result of his/her official position and are over and above the salary or wages. These fringe benefits or perquisites can be taxable or non-taxable depending upon their nature. Uniform allowance is exempt to the extent of expenditure incurred for official purposes U/S 10(14)."
Therefore, it is advisable for an earning individual going to file its ITR, must check about the income tax allowances and the category under which it falls.