Paying taxes is a crucial part of financial responsibility, yet many new taxpayers feel overwhelmed. Understanding the basics of taxation, compliance, and available benefits can make the process smoother and help avoid penalties. Here are 10 key things every new taxpayer in India must know.
1. Know Your PAN and Aadhaar
Your Permanent Account Number (PAN) is essential for all financial transactions, including filing tax returns. Linking your PAN with Aadhaar is mandatory to ensure smooth processing of tax filings and refunds.
2. Understand Your Tax Slabs
Income tax in India is based on progressive slabs, which determine the percentage of tax you pay depending on your income. Knowing the current tax slabs helps you plan your finances efficiently.
3. File Income Tax Returns (ITR) On Time
Even if your income is below the taxable limit, filing an ITR is beneficial. Timely filing:
Avoids penalties
Enables smooth loan or visa processing
Helps track your financial history
4. Claim Eligible Deductions
Common deductions for new taxpayers include:
Section 80C: Investment in PF, PPF, ELSS, life insurance
Section 80D: Health insurance premium
Section 24(b): Home loan interest
Section 10(14): Allowances like HRA
5. Keep Income Proof and Receipts
Maintain salary slips, bank statements, rent receipts, and investment proofs. Proper documentation helps during ITR filing and avoids future notices from the tax department.
6. Understand TDS (Tax Deducted at Source)
TDS is deducted by employers or banks from salary, interest, or payments. Track TDS through Form 26AS to ensure it matches your tax liability.
7. Use Online Tools for Filing
The Income Tax Department’s e-filing portal allows taxpayers to:
File ITR online
Check refund status
Download Form 16 and 26AS
8. Avoid Tax Evasion
Paying taxes honestly ensures legal compliance and avoids penalties, interest, and potential prosecution. Misreporting income or claiming ineligible deductions is risky and illegal.
9. Stay Updated on Tax Laws
Tax laws are updated every financial year during the Union Budget. Keeping up-to-date helps you:
Claim maximum benefits
Avoid penalties
Make informed financial decisions
10. Consult Professionals if Needed
If you’re unsure about filing, deductions, or new tax rules, consider consulting a chartered accountant or tax advisor. Professional guidance helps avoid mistakes and optimize tax planning.
FAQs:
Q1. When is the last date to file ITR in India?
Typically, the due date is 31st July of the assessment year, though extensions may be announced by the government.
Q2. What documents do I need to file ITR?
Salary slips, Form 16, bank statements, PAN, Aadhaar, investment proofs, and rent receipts if claiming HRA.
Q3. Can I file ITR online for the first time?
Yes, the Income Tax e-filing portal supports first-time taxpayers with step-by-step guidance.
Q4. What is Form 26AS?
Form 26AS is a consolidated tax statement showing TDS, advance tax, and refunds, useful while filing ITR.
Q5. Are online tax filing platforms safe?
Official government portals and licensed tax filing platforms are secure and compliant with IT rules.
Published on : 30th September
Published by : SMITA
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