Month: August 2023

Quickest Way of E-Filing Income Tax Return in 2024

Posted on by Mudra Mentor

When you hear about e-filing income tax, it is basically related to claiming Income Tax Returns online via a secured internet connection. This process is quick and saves a significant amount of your budget as it can be done without the intervention of any professional. 

In this guide, you’ll learn how to exactly file ITR online in simple steps. 

How to File Income Tax Returns Using the Official Portal?

First, refer to the latest regulations to assess your income tax liabilities. Then procure a Form 26AS to affirm TDS payments for that year individually for each quarter. Now, comes the most important part.

Depending on the demarcations published by the Income Tax Department, you need to select a specific ITR form. After this is done, follow the below-mentioned steps to execute e-filing:

Step 1: Search for the official website of Income Tax e-filing and click on the relevant site to access the login portal.

Step 2: Complete the ‘Login’ process by providing your ‘Username’ and clicking on ‘Continue’.

Step 3: Navigate to the tab mentioning ‘e-file’ and select the option ‘File Income Tax Return’ from the dropdown menu.

Step 4: Now, the portal will ask you to mention the ‘Mode of Filing’ followed by the ‘Assessment Year’. Kindly specify these details and click on ‘Continue’. 

Step 5: At this stage, you will need to mention an entity type. This can be the following options – ‘Individual’, ‘Hindu Undivided Family’, or ‘Others’. Select one option and press ‘Continue’.

Step 6: Choose the ITR type. For instance, if you have proceeded as an individual, you will either be required to choose ITR 1 or ITR 4. Similarly, option ITR 2 can be applicable to both individuals and HUFs. 

Step 7: Here you have to mention the reason for filing income tax returns. Additionally, an alert box will educate you regarding the exemption limit and certain regulations as per the 7th provision of Section 139(1).

Step 8: As one of the most important stages of e-filing income tax, you have to provide bank account details where you wish to get the amount back. Meanwhile, if a bank account had already been added then you will be asked to pre-authorise it once. 

Step 9: You will get redirected to a fresh page where most of the information will be already filled up. Go through the details thoroughly and validate the same to proceed to the last step.

Step 10: Procure a hard copy of the application and make arrangements for sending it to the Income Tax Department. This is a mandatory step to initiate the verification stage. Therefore, it should not be missed at any cost. 

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What are Some Common Mistakes While E-Filing Income Tax Returns?

Several mistakes from the taxpayer’s end are noticed time and again while they attempt to file income tax returns online. Take note of these mistakes so that you can successfully avoid them:

  • Not Choosing the Correct ITR Form

ITR-1 is meant for salaried individuals with one or more income streams and having 1 owned property. Also, this ITR type is suitable for people who earn up to Rs. 50 lakhs a year. Similarly, freelancers must select ITR-4 and business people should go for ITR-3. Knowing your ITR category is crucial to put forward a valid request.

  • Not Supporting the TDS Specifications with a Valid 26AS Form

Taxes deducted from income generated from interests, salaries, and other immovable assets get recorded in form 26AS. Therefore, you must get this document verified before applying for IT Returns. 

  • Not Declaring All Bank Accounts

Each of the concerned individual’s bank accounts has to be mentioned except those which are in a dormant stage. Failing to meet these criteria can lead to complications while issuing the refund. 

So, now you have a complete idea regarding e-filing income tax in India. Therefore, you can utilise this knowledge and share it with your peers to help them avoid the most common mistakes that may cost them the cancellation of refunds. 

FAQs on E-Filing Income Tax

  • What is the difference between e filing and regular filing of return?

Among both the procedures the latter one is slower as the involved sub-processes are manual and thus involve possibilities of posting errors. 

  • What is the late fee for IT filing?

Late ITR filings can cause you to pay Rs. 5000 as a penalty if your income exceeds Rs. 5 lakhs per year. In case you earn less than Rs. 5 lakhs, you’ll be required to pay Rs. 1000 for late filing. 

  • What does Form 16A signify?

Form 16A is the certification of tax deducted at source by the employer. It includes all the details of the deducted. 

  • Is interest on FD taxable?

Yes, the profit that you earn from fixed deposit investments is fully taxable. The interest earned must be added to the total annual income and thereby the tax amount will be calculated as per the applicable tax slab regulations.

7 Useful Tips on How to Use Credit Card Smartly in 2024

Posted on by Mudra Mentor

Many people, even today, prefer not to use credit cards. This hesitation restricting them to own one usually results from the fear that makes them contemplate regarding what will happen if they miss out on timely repayments.

However, seldom one tries to learn the proper usage of credit cards. This in turn, leads to hardships at times of financial emergencies. 

Here, we will discuss how to use credit card smartly to make transactions simpler and lead the desired lifestyle.

7 Smart Hacks You Must Follow While Using a Credit Card

To ensure the optimal utilisation of credit card benefits, kindly follow these tips:

  • Focus Towards Building an Exceptional Credit Score

Consider making monthly bill payments and completing other recurring transactions using your credit card. Subsequently, ensure to settle the outstanding amount on time to increase your credit score. It will make you eligible for better credit facilities in the future. Therefore, besides capitalising on the momentary offers try to develop a habit of repaying your bills timely to build a flawless credit history.

  • Track All Your Expenses

Monitoring the day-wise expenses will help you prioritise your credit card payments. Additionally, you will become more aware financially and only limit the card usage for specific requirements involving cashback and rewards.

Creating pre-set barriers for credit card usage will restrict instances of personal finance disruptions moving down the line.

  • Go for Reward Points

Keep an eye on the ongoing offers to utilise your credit card smartly. This will make sure that you do not miss any opportunity to earn some additional cash. Also, it will help you not to trigger any unnecessary credit card transaction.

  • Stick to Timely Repayments

This tip must be adhered to month over month as long as you are using your credit card. Any lapse in this practice attracts unnecessary interest burden and negatively impacts your credit score.

Also, certain lenders levy late fees and financing charges when you fail to repay on time. Therefore, it is advised to use the credit card wisely and never skip payments to avoid difficulties in availing loans later on.

  • Develop a Habit of Analysing Credit Card Statements

It is always crucial to keep an eye on the credit card statements and tally the billing inputs immediately after they are being generated at different points of sale. Indirectly it contributes to your personal financial decisions.

Also, you can notice some changes that should have been pointed out earlier and thus report them to the concerned officials. Overall, it helps you not to incur extra costs due to some mistakes caused by any merchant while posting a transaction.

  • Do Not Rely on Too Many Credit Cards

Different credit cards come with their own set of unique offers. This often tempts us to go for newer instruments. But what we tend to forget is that more credit card accounts bring in more hassles as you may lose track of your borrowings.

Hence, it is better not to spend using multiple credit card accounts, especially when you are new to the credit world. When you follow this tip, then under no circumstances you end up borrowing more than you can afford.

  • Maintain a Contingency Fund

Emergency funds allow you to escape bigger cash crunches without resorting to significant loan burdens. Therefore, try building a contingency fund having enough money to support your basic sustenance needs for six months. Simultaneously, when it comes to credit card usage, try not to exceed 30% of the credit utilisation ratio.

Maintaining these two rules will help building confidence of the lender. As a result, you will be eligible for better credit card offers in the future.

Now as you have learnt about how to use credit card wisely, ensure to do proper research before selecting a lender. Always remember to compare the reward systems to confirm whether their offerings actually align with your interests. Finally, refrain from unnecessary credit expenses to avoid additional financial burden.

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FAQs on How to Use Credit Card

1. Is using a credit card smart way to purchase things?

Yes, many rewards can be claimed if you use a credit card to pay off bills. Also, it helps you to build a solid credit history and avail interest-free loans every month.

2. What are the various ways of making money using a credit card?

First, you can receive a signup bonus as a new registrant. Next, you can keep on receiving cashback and reward points that can be later on redeemed for money. Also, you can refer your peers to earn some extra cash.

3. Can I use my credit card for everything?

Yes, a credit card can meet your daily expenses as long as the credit limit is not breached. However, as a good practice you must monitor the credit card statements to make mindful credit purchases.

4. How to use a credit card for beginners?

Beginners should stick to a low credit utilisation amount and set up autopay to pay off the outstanding amount each month. Also, they must define certain categories for which they shall be using the card.

DigiLocker

Posted on by Mudra Mentor
Owing to various reasons, we often need to carry important documents like Aadhaar card, PAN card, driving licence, etc. with us in physical wallets. This involves a great risk of misplacing the documents which in turn leads to exceptionable hassle.

To eliminate this problem many have now instead started relying on digital copies of these documents. Fortunately, the Indian Government has stepped up in this initiative and revolutionised the journey towards digitisation by introducing DigiLocker.

We suggest you read further to know more about this application.

What is DigiLocker?

DigiLocker is an initiative authorised by the Central Government that allows cloud-based document management.  As per the norms published by the Ministry of Electronics and IT, anyone can use this facility to affirm the authenticity of their e-documents.

This highly effective service only requires verifying your Aadhaar number as an essential input. Once you enter the OTP sent to your Aadhaar-registered phone number, the app becomes ready for day-to-day usage.

Brief Introduction to the Various Components of DigiLocker

Anyone using the DigiLocker app even for the first time will find it too easy to access its different features. Its simple user interface consists of the following elements:

1.  Dashboard

This section refers to the landing interface that gets displayed on your device as you log in using the unique credentials. From here you will be able to open all the already uploaded documents and access the other sections of the app.

2.  Uploaded Documents

It is a segment where all your uploaded documents stay intact for a lifetime. Anywhere you present these e-copies the authority will consider them to be valid.

3.  Shared Documents

Here you can refer to your papers that you’ve shared with other sources. Separate links are displayed to help track the documents shared in the past.

4.  Issued Documents

This is basically a shortcut to find all the government-issued documents furnished by authorities that partner with DigiLocker.

5.  Issuers

It is another separate list presenting the names of various departments and organisations that have issued the crucial documents. You can stay assured of the privacy of all the files as they remain in the form of links to be accessed by the original holder.

6.  Activity

This last section of the DigiLocker platform summarises your actions after opening the application. In case of any discrepancy, you can always come back and check this section to confirm any mistake if committed at your end.

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Ways You May Use DigiLocker App for Maximum Advantages

Here are some ways to fully utilise the offerings of DigiLocker app:

  • Install the app on your mobile device and complete the login procedure to travel anywhere in India without the need to carry the actual papers. Therefore, it is a crucial step towards going 100% paperless.
  • Share the documents to authorised personnel on the go thereby reducing their hassle and overall work pressure. Manual verification procedures may become questionable at times which can now be avoided successfully using DigiLocker.
  • There’s no need to carry extra photocopies of the original documents as you will be able to retrieve as many copies as you wish by clicking on the links provided within the app.
  • If you have applied for a specific government document by visiting an agency there’s no need to put extra effort into collecting it from anywhere. As DigiLocker is a cloud-based service, the document can simply be downloaded and stored on your device for future needs.

Lastly, you can now help reduce corruption at different levels of society simply by using DigiLocker. It effectively removes all intermediaries who previously got involved promising to provide undue advantages and meanwhile earned a commission in the process. 

Stepwise Sign-Up Process for New DigiLocker Users

The signup procedure for fresh registrants is pretty simple. It has been broken down below for your clear understanding:

Step 1: Visit DigiLocker’s official website. Otherwise, if you wish to make it more convenient, consider downloading the mobile application for your Android or iOS device.

Step 2: Navigate to the ‘sign up’ button.

Step 3: Enter your personal details as asked for. Make sure these credentials match with those provided while applying for your Aadhaar card.

Step 4: Select a 6-digit unique PIN for your DigiLocker account. Make sure to take note of it before you click on ‘Submit’.

Step 5: Provide the OTP sent to your Aadhaar registered phone number. Finally, click on ‘Submit’.

Following these five easy-to-follow instructions you can now finally open your DigiLocker account. In case you forget your login credentials in future you can always recover it using the registered mobile number.

FAQs on DigiLocker

1.  What are the benefits of DigiLocker?

The DigiLocker platform allows you to access all your important documents on the go. Also, as it is entirely cloud-based, it gives you up to 1 GB of space so that you don’t have to fill up the internal storage for keeping essential documents.

2.  Is DigiLocker 100% safe?

Yes, your data remains encrypted and the app is registered under the Central Government of India. Thus, DigiLocker’s app operators comply with the regulations stated by SEBI and no one can access the documents without your permission.

3.  Does DigiLocker cost money?

To date using all the features of this app costs no money. It is a cloud-based software application that keeps all your personal and banking information safe, free of cost.

4.  Is DigiLocker valid in banks?

As per the RBI’s latest master circular, now all banks will accept DigiLocker documents for KYC verification. This regulation is also followed by other financial firms as it contributes to their ease while processing documents.