I started filing my own taxes a few years ago by reading up online/watching YouTube videos.
Coming from a non finance background, I spent a lot of time reading up to understand the different sections, deductions, etc. when I first filed my own taxes. I learnt a lot in the process and was exhilarated when the ITR went through without any issues.
Fast forward a year and I had to file taxes again. To my surprise, I struggled to recollect majority of the things I’d learnt last time and had to go through the same process again.
This time, I decided to do my future self a favor by jotting down high level pointers that’d help me in filing future tasks.
Now, that I’ve benefitted from this for multiple years, I thought why not put this out for others too.
Forms
Proposed Investment Declaration
- Tentative investments the individual is planning to make in the said FY
- To be furnished by individual to employer at the start of the FY
- Employer deducts TDS based on this declaration
Form 12BB
- Statement of claims submitted by individual to employer at the end of FY
- Submit proofs to validate that the tentative investments declared were actually abided by
- Should tally with the Proposed Investment Declaration made at the start of the FY
- Discrepancy would result in higher TDS deduction
Form 16
- Certificate issued by the employer to the individual at the end of the FY
- Denotes the tax (TDS) paid by the employer on behalf of the individual
- Crucial for filing IT Returns
- Two Parts
- 16A - Contains the amount deducted and date on which it was deposited with the government
- 16B - Detailed breakup of the individual’s salary and how TDS was calculated based on the Proposed Investment Declaration & Form 12BB in the entire FY
Form 26AS
- Statement of tax amount deducted (TDS for salaried individuals) issued by the IT Dept
- Should tally with Form 16 denoting that TDS deducted by employer was indeed deposited to the government
Sections
10 (13A) - House Rent Allowance
Lowest of the following
- Actual HRA received from employer
- For those living in metro cities: 50% of (Basic salary + Dearness allowance) For those living in non-metro cities: 40% of (Basic salary + Dearness allowance)
- Actual rent paid minus 10% of (Basic salary + Dearness allowance)
24B
- Deduction on Interest amount towards Home Loan (₹2L)
80C
- Public Provident Fund
- Employer Provident Fund
- Equity Linked Savings Scheme
- Principal amount towards Home Loan
- Fixed Deposits
- Tuition Fees
- Life Insurance Premium (LIC/ULIP/Term)
- National Saving Certificate (Post Office)
80CCC
- Pension Plans
80CCD (1)
- Employee’s contribution to NPS (National Pension Scheme)
80CCD (1B)
- Additional deduction of ₹50,000 is allowed for amount deposited to NPS account
80CCD (2)
- Employer’s contribution to NPS
Maximum Deduction via 80CCE (80C + 80CCC + 80CCD)
A. 80C + 80CCC + 80CCD (1) = ₹1,50,000
B. 80CCD (1B) = ₹50,000
80CCE = A + B = ₹2,00,000
80TTA
- Deduction for Income from Savings Bank Interest (upto ₹10,000)
80TTB (for senior citizens)
- Deduction for Income from Savings Bank Interest (upto ₹50,000)
80D
- Medical Insurance
- Self, Spouse & Children - ₹25,000
- Parents - ₹25,000
80G
- Donations
80GG
- House Rent Paid - if individual doesn’t get HRA from employer but pays rent
80E
- Education
80EE
- Additional deduction for first time home buyers (upto ₹50,000)
- Value of the house should be Rs 50 lakh or less
- Loan taken for the house must be Rs 35 lakh or less
Deductions
- Standard Deductions - ₹50,000
- Tax on employment (Professional Tax) - ₹2,400
- Entertainment Allowance - only applicable for Central/State government employees
Guides
Helpful Links
Which ITR Should I File? ITR Types, Income Tax Returns, ITR forms for FY 2021-22 (AY 2022-23)
Section 80 Deduction : Income Tax Deductions under Section 80C, 80CCD, 80CCC, 80D
Keep below things handy
- Form 16
- Annual Information Statement (AIS) & Taxpayer Information Summary (TIS)
- 26AS
- Bank Statements
- Equity Investment Tax P&L
- Rent Receipts
- Receipts for Donations