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    ITR filing glossary: 10 terms you should know

    ITR filing glossary: 10 terms you should know

    ITR filing glossary: 10 terms you should know
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    By Anshul   IST (Published)

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    SUMMARY

    Income Tax Return (ITR) filing is the process by which a taxpayer has to file a report of total income earned in a financial year. A person can claim the refund of the excess tax paid/deducted during the financial year by filing an ITR for that year. Here are basic terms you should know before filing ITR:

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    Income Tax Return (ITR) filing is the process by which a taxpayer has to file a report of total income earned in a financial year. A person can claim the refund of the excess tax paid/deducted during the financial year by filing an ITR for that year. Here are basic terms you should know before filing ITR: (Image: Shutterstock)

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    Assessment year: Assessment year is the year in which an individual will file the return for the previous year. So, the assessment year is 2021-22 for the previous financial year 2020-21 in ITR filing. (Image: Shutterstock)

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    Assessee: As per Income Tax Act, an assessee means “a person by whom any tax or any other sum of money is payable under this Act.” (Image: Shutterstock)

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    Exempt income and taxable income: Exempt Incomes are not chargeable to tax i.e. they are not included in the total income for the purpose of tax calculation. While taxable incomes are chargeable to tax. (Image: Shutterstock)

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    Investments: Declaring investments can help one in achieving more deductions on tax. These include HRA, Life Insurance Premiums, National Savings Certificate, ELSS Tax Saving Mutual Funds, among others. (Image: Shutterstock)

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    Section 80C: Deductions under this section are only available to individuals and HUF. This section allows for certain investments like NSC, etc. and expenditures to be exempt from taxation up to the amount of Rs.1.5 lakh. (Image: Shutterstock)

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    ITR forms: Income Tax Department has notified seven forms for filing ITR for financial year FY20-21 or assessment year FY21-22. These forms include Sahaj (ITR-1), Form ITR-2, Form ITR-3, Form Sugam (ITR-4), Form ITR-5, Form ITR-6, and Form ITR-7. The purpose of different forms is that each form is for different kinds of disclosure depending upon the amount or nature of incomes, assets and liabilities or foreign assets held by a person, availing of presumptive scheme, etc. (Image: Shutterstock)

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    Tax regimes: As of now, there are two tax regimes existing in the tax system. Budget 2020 announced a new tax regime giving taxpayers an option to pay taxes as per the new tax slabs from FY 2020-21. This new tax system has been made optional and continues to co-exist with the old one. (Image: Shutterstock)

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    TDS: TDS or Tax Deducted at Source is income tax reduced from the money paid at the time of making specified payments such as rent, commission, professional fees, salary, interest etc. by the persons making such payments. (Image: Shutterstock)

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    Form 16: Form 16 is a certificate issued by an employer and it contains the information that one needs to file the income tax return (ITR). These certificates provide details of TDS/TCS for various transactions between deductor and deductee. (Image: Shutterstock)

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    Form 26AS: This is a consolidated annual tax statement, which is an essential document required during filing Income Tax Return (ITR). This is just like the tax passbook, which has all the information of all the incomes that have been reported, the taxes that have been deducted and other specific financial transactions that have been reported against the assessee’s Permanent Account Number (PAN). (Image: Shutterstock)

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