Congratulations on starting your journey into the workforce! When you start working and earn income, you may wonder if you need to file taxes as a young adult in India. The answer depends on the amount of income you earn and whether it exceeds the limit set by the government.
If your annual income exceeds the basic exemption limit in India, you are required to file an income tax return. The exemption limit may vary from year to year based on the prevailing tax laws. The basic exemption limit for people under 60 years old for the financial year 2022–2023 is ₹2.5 lakh. This suggests you are free from filing taxes if your yearly income is less than ₹2.5 lakh. However, if your income exceeds this limit, you must file your income tax return.
Keep in mind that even if your income falls below the exemption limit, there may be situations where filing taxes voluntarily could be beneficial. For instance, if you want to claim a tax refund or if you want to establish a record of your income for future financial transactions, it is advisable to file your taxes.
We are happy to inform that over 2 crore Income Tax Returns (ITRs) for AY 2023-24 have already been filed till 11th of July this year as compared to 2 crore ITRs filed till 20th of July last year.
Our taxpayers have helped us reach the 2 crore milestone 9 days early this year,… pic.twitter.com/ZlOAKeJpWR— Income Tax India (@IncomeTaxIndia) July 11, 2023
Additionally, if your employer deducts taxes from your salary under the Pay-As-You-Earn (PAYE) system, it is important to file your taxes to reconcile any discrepancies between the taxes deducted and your actual tax liability.
To file your taxes, you will need to gather the necessary documents such as Form 16, which is provided by your employer and contains details of your salary and tax deductions. If you have income from other sources, such as interest on savings accounts or part-time jobs, make sure to include those as well.
While you may not need to file taxes if your income is below the exemption limit, it is recommended to stay informed about the current tax laws and consider filing taxes voluntarily for various benefits. Remember, complying with tax regulations not only fulfills your responsibilities but also helps you establish a strong financial foundation.
Look up more articles here for a smooth first time tax-filing process. All the best!
