Income Tax Return: Filing ITR for the first time? Know key points to remember to avoid Rs 5,000 penalty

As the last date for filing Income Tax Return (ITR) approaches, it's essential to complete this task without incurring any penalties. For the financial year 2022-23 and assessment year 2023-24, make sure to file your ITR by July 31, 2023. Regardless of whether you are a salaried individual, freelancer, or business owner, filing ITR is mandatory for all.

Here are some key points to keep in mind while filing your ITR:

1. Choose the appropriate tax regime: India offers two tax regimes - the Old Tax Regime and the New Tax Regime. Select the one that suits your financial needs the best.

2. Gather the required documents: Before filing ITR, ensure you have the necessary documents such as personal details, tax statement, investment and income proofs. Additionally, you'll need Form 16, Form 26AS, PAN card, Aadhaar card, and Annual Information Statement from your company. If you have any loans, keep the interest certificate ready as well.

3. Select the right ITR form: The Income Tax Department issues different ITR forms for various categories of taxpayers. Choose the appropriate one from ITR-1, ITR-2, ITR-3, or ITR-4 based on your income and profile.

4. Verify your ITR: Verifying your ITR is crucial, especially for first-time filers. Failure to do so within 30 days of filing will render your ITR invalid. To avoid penalties, ensure you file your ITR by July 31, 2023. Late filers will be subject to a fine of Rs 1,000 or Rs 5,000 from August 1, 2023. Individuals with income below Rs 5 lakh will incur a penalty of Rs 1,000, while those with income above Rs 5 lakh will face a penalty of Rs 5,000.

By following these guidelines, you can efficiently file your ITR and fulfill your tax obligations on time.

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