CS Sweta Das

Everything You Need to Know About Income Tax Return

Introduction

All residents in India are obligated to adhere to the Income Tax rules and regulations by paying taxes on their income to the Government of India. Whether you are an individual, association, firm, LLP, local authority, or a Hindu Undivided Family, your income for each financial year is subject to taxation by the Income Tax laws. Therefore, it is imperative to file your Income Tax return (ITR) annually. You have the option to file your income tax return either online or offline based on your preference.

What is an Income Tax Return?

An Income Tax Return (ITR) is a document individuals submit to the Income Tax Department of India to disclose details about their income and the corresponding taxes owed for a specific year. The information provided in an ITR pertains to a particular financial year, spanning from April 1st to March 31st of the following year.

Income sources, including salary, business profits, property sales, dividends, capital gains, and interest earnings, contribute to the overall income reported in the ITR. In cases where an individual has paid more tax than required during a given year, the Income Tax Department will issue a refund.

Is it mandatory to file Income Tax Returns (ITR)?

According to Income Tax regulations, individuals surpassing the exempted income limit set by the Government are obligated to file their tax returns based on the applicable tax slabs for the respective year. Failing to file the Income Tax Return (ITR) by the due date could result in penalties and may adversely impact prospects, including potential challenges in securing loans or visa approvals.

Who needs to submit an Income Tax Return (ITR)?

Now that we have a grasp of what an income tax return entails, let’s explore the roster of individuals and businesses required by law to submit their income tax returns each fiscal year.

  • Individuals under 59 years with an annual income exceeding Rs. 2.5 Lakhs are obligated to file an Income Tax Return (ITR).
  • Senior citizens aged between 60 and 70 have an exemption limit of Rs. 3 Lakhs, while super senior citizens (80 years and above) have a limit of Rs. 5 Lakhs. Income calculation excludes deductions specified under Section 10 of the Income Tax Act.
  • Registered companies, regardless of profit, with annual income must file an ITR.
  • Individuals seeking a refund on excess income tax or deducted tax from their annual income are required to file.
  • Individuals possessing assets or financial interests outside the country are mandated to file an ITR.
  • Foreign companies enjoying treaty benefits on transactions within India must file an ITR.
  • Non-resident Indians (NRIs) earning above the basic yearly exemption limit of Rs. 2.5 lakh are obligated to file their Income Tax Returns.
  • Which documents are necessary for filing Income Tax Returns (ITR)?
  • When you begin filing your income tax return, in addition to your salary slips, bank savings account passbook, Aadhar card, and PAN card, there are a few more documents you’ll need to make the tax filing process smoother.
  • Form 16: Your employer provides this, showing your salary details and the tax taken out of it (TDS).
  • Form 16A: It reveals the TDS on interest from things like fixed or recurring bank deposits.
  • Form 16B: If you sell a property, this form has details on the TDS applied to the amount received from the buyer.
  • Form 16C: Records TDS details of rent paid by your tenant.
  • Form 26AS: A summary of taxes linked to your PAN number. It covers TDS from your employer, bank, or any entity paying you. It also includes advance or self-assessment taxes and proof of tax-saving investments, like deductions from Section 80C to 80U, and details of life insurance policies or term plans.
  • Advantages of submitting your Income Tax Return (ITR) online
  • Now, from the comfort of your home with an internet connection, you have the option to submit your tax return. This convenience is facilitated through e-filing, utilizing pre-approved tax preparation software provided by the Income Tax Department. The growing trend among taxpayers is to opt for online filing, driven by the advantages it offers, including:
  • Refund Processing: If tax is deducted at source on your payments and you seek a refund, submitting your Income Tax Return (ITR) for the relevant financial year is necessary for the refund process.
  • Verification for Loans: When applying for a loan, your annual income becomes a crucial factor. Furnishing an ITR form with comprehensive earnings details provides lenders with a clear overview of your past income, enhancing the credibility of your loan application.
  • Visa Application Support: Visa applications often require proof of income, and tax returns stand as the most widely accepted documents for this purpose. Your ITR serves as crucial documentation in visa application processes.
  • Income Proof for Insurance: When purchasing a term plan, insurers may request your ITR to determine the compensatory amount for your nominees in the event of death or disability. The ITR serves as an officially verifiable proof of income for insurance purposes.
  • Which Income Tax Return (ITR) Form to Submit?
  • There are seven different types of forms for Income Tax Returns (ITR), designed for various individuals and income sources. The Income Tax Department provides different forms based on the category of income:
  • ITR-1: For resident individuals (excluding NRIs/HUF/other entities) with total income up to Rs 50 lakhs. Applicable for income from Salary/Pension, One house property, and Other Sources.
  • ITR-2: For individuals/HUF with income from sources other than Business or Profession, not eligible for ITR-1.
  • ITR-3: Applicable for individuals and HUF with income from profits and gains from business or profession.
  • ITR-4: For resident individuals/HUF/Firms (excluding LLP) with total income up to Rs 50 lakhs. Covers income from business or profession (computed on presumptive basis under section 44AD or 44AE or 44ADA), Salary/Pension, One House Property, and Other Sources.
  • ITR-5: Applies to entities other than Individuals, HUF, Companies & those filing ITR-7. Includes partnership firms, LLP, AOP, BOI, Artificial Judicial Person, Co-Operative Societies, investment funds, business trusts, estates of the deceased, and insolvents.
  • ITR-6: For all Companies, excluding those claiming exemption under section 11 (pertaining to charitable/religious trusts).
  • ITR-7: Applies to entities required to furnish return under sections 139(4A), 139(4B), 139(4C), 139(4D), 139(4E), or 139(4F). This includes religious & charitable trusts, political parties, scientific research associations, universities & colleges.
  • How to Verify the Status of Your Income Tax Return (ITR) Online?
  • Once you have submitted your tax return, easily check its status online through the Government of India’s e-filing website. Depending on whether you have a login account, follow these steps to verify your ITR status:
  • Without login details: If you don’t have login details, just go to the ITR status link on the left side of the website. Clicking it will take you to a page where you enter your PAN number, ITR acknowledgment number, and captcha code. Once you’ve entered these details, your tax filing status will be displayed.
  • With login details: Sign in to the website with your username and password. Next, choose the ‘view returns or forms’ option. Pick the assessment year and income tax returns from the dropdown menu. After that, you can check if your ITR has been verified or processed.
  • How to Obtain the ITR-V Form Online?
  • Once you have successfully filed your tax return, the Income Tax Department generates a verification form to authenticate the online e-filing of your taxes. This option is available for individuals who file their returns without a digital signature. Now, let’s explore the process of downloading the ITR-V form online:
  • Visit the Income Tax Department of India website at https://portal.incometaxindiaefiling.gov.in/e-Filing/UserLogin/LoginHome
  • There are seven different types of forms for Income Tax Returns (ITR), designed for various individuals and income sources. The Income Tax Department provides different forms based on the category of income:
  • ITR-1: For resident individuals (excluding NRIs/HUF/other entities) with total income up to Rs 50 lakhs. Applicable for income from Salary/Pension, One house property, and Other Sources.
  • ITR-2: For individuals/HUF with income from sources other than Business or Profession, not eligible for ITR-1.
  • ITR-3: Applicable for individuals and HUF with income from profits and gains from business or profession.
  • ITR-4: For resident individuals/HUF/Firms (excluding LLP) with total income up to Rs 50 lakhs. Covers income from business or profession (computed on presumptive basis under section 44AD or 44AE or 44ADA), Salary/Pension, One House Property, and Other Sources.
  • ITR-5: Applies to entities other than Individuals, HUF, Companies & those filing ITR-7. Includes partnership firms, LLP, AOP, BOI, Artificial Judicial Person, Co-Operative Societies, investment funds, business trusts, estates of the deceased, and insolvents.
  • ITR-6: For all Companies, excluding those claiming exemption under section 11 (pertaining to charitable/religious trusts).
  • ITR-7: Applies to entities required to furnish return under sections 139(4A), 139(4B), 139(4C), 139(4D), 139(4E), or 139(4F). This includes religious & charitable trusts, political parties, scientific research associations, universities & colleges.
  • How to Verify the Status of Your Income Tax Return (ITR) Online?
  • Once you have submitted your tax return, easily check its status online through the Government of India’s e-filing website. Depending on whether you have a login account, follow these steps to verify your ITR status:
  • Without login details: If you don’t have login details, just go to the ITR status link on the left side of the website. Clicking it will take you to a page where you enter your PAN number, ITR acknowledgment number, and captcha code. Once you’ve entered these details, your tax filing status will be displayed.
  • With login details: Sign in to the website with your username and password. Next, choose the ‘view returns or forms’ option. Pick the assessment year and income tax returns from the dropdown menu. After that, you can check if your ITR has been verified or processed.
  • How to Obtain the ITR-V Form Online?
  • Once you have successfully filed your tax return, the Income Tax Department generates a verification form to authenticate the online e-filing of your taxes. This option is available for individuals who file their returns without a digital signature. Now, let’s explore the process of downloading the ITR-V form online:
  • Visit the Income Tax Department of India website at https://portal.incometaxindiaefiling.gov.in/e-Filing/UserLogin/LoginHome

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