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An income tax return, or ITR, as it is commonly called, is a document
filed by a taxpayer with the Income Tax Department of India.
ITR reflects your contribution directly to public services and
infrastructure. This contains all the information you need about your income sources, deductions
& exemptions, tax liabilities, and filing information.
e-filing of income tax returns is mandatory for registered companies,
individuals, HUFs, or other professionals.
Based on the type of taxpayer, there are multiple income tax return
forms filed. Every taxpayer should complete their ITR filing within the deadline to avoid
penalties.
Filing income tax returns offers multiple advantages for a citizen. Here are the top 5 advantages of filing an income tax return in India.
Easy to Claim Tax Refunds
If a taxpayer earns less than ₹5 lakh in a year, they can claim tax refunds that are
deducted from their income. It is crucial to file IT returns online by 31 July of every
year.
Avoid Legal Consequences
Not filing your income tax returns online in India may result in penalties and legal
consequences. The income tax authority may send a notice that carries hefty fines and
penalties. It is essential to prevent it by submitting ITR returns on schedule.
Effective for Easy Loan Processing
While applying for a loan or a visa, you should provide your last three years of ITR
filing. Submitting the tax returns increases credibility and can help lenders assess
your financial status.
ITR Returns Can Act as a Verified Income Statement
Freelancers or other self-employed individuals who don't have an official income
statement can use their ITR returns to verify their income.
Along with other forms, the following documents should be provided to file your income tax returns online:
PAN Card
Form 16
Form 16A
Bank account details
Bank statement or passbook
Details of capital gains
Details of foreign income
Investments in tax saving instruments
PPF receipt
Details regarding equity or mutual funds
Aadhar Card
Form 16A
Form 16c
Investment details
Home loan statement
Details of Rental income
Details of dividend income
Life insurance receipts
Donation receipts
Individuals or companies that fall under the following criteria should file IT returns in India:
Salaried individuals whose gross income exceeds
the threshold level before considering deductions under Section 80c and Section 80u
should file ITR returns
Entities like private limited companies and limited liability
partnerships, irrespective of profit or loss, should file ITR returns
Individual directors or partners holding positions in private
limited companies or limited liability partnerships should file income tax returns
online
Individuals earning dividends from multiple sources like
mutual funds, equity, fixed deposits, interests, and bonds should file their ITR online
Individuals sourcing income from charity, religious trust, or
other forms of voluntary contributions should file IT returns
Businesses and individuals who are eligible for tax refunds should
definitely file their income tax returns online
Non-resident Indians should file an income tax return based on their incomes.
Make sure to have all your personal information,
like your name, address, contact details, and PAN
Find out the appropriate income tax return forms
Select the proper forms and collect all the income details
Keep proofs of all the deductions and exemptions
Take note of the information on TDS returns, capital gains, and
foreign assets and incomes
In the case of a firm or registered company, make sure to have
all the financial statements, audit reports, TDS compliances, and other related party
transactions.
Have proof of all the annual compliances in hand.
Filing your income tax returns online is a
complex process. Errors during income tax return filing may result in multiple issues.
Vakilsearch provides a one-stop solution for filing out your income tax returns online.
We have a team of tax experts who can complete your ITR filing in India in just three
easy steps:
1. Consult our tax Experts
Get in touch with our tax experts to resolve all your queries. Our in-house CA will
provide you with tailor-made advice to save on taxes
2. Provide all the Required Documentation
As per the requirement to submit all the income statements and documentation of
investment proves to our team.
3. Get your ITR Filed
Based on the scenario, our team will choose the apt ITR forms and file them on your
behalf on time.
As per the income tax laws, every citizen who is
earning income should file an income tax return if their total income exceeds the basic
threshold. Online ITR return filing helps you carry forward the losses in the present
year to the next financial year.
Filing ITR returns online creates a valid proof of income. It
is mandatory for applying for any loans in the future; filing ITR returns is required
for applying for credit cards in the future. It is valid proof when it comes to visa
applications.
Once all of the information is submitted, the page will
display all of the relevant information about the company, including the legal name,
jurisdiction, date of registration, GSTIN/UIN status, and data from all recent GST
returns filed under various sub-headings.
Filing income tax return in India is mandatory for individuals under the following circumstances:
Individuals below 60 years whose gross total income exits ₹2.5 lakh
Individuals above 60 years but below 80 years who's gross total income exit ₹3 lakh
Individuals above 80 years who's gross total income
exceeds ₹5 lakh
Apart from this if the income falls within these sources one must file and it are return
online
Individuals having deposits over ₹1 crore in the current bank Account
Deposits over ₹50 lakhs and savings bank account Individuals who spent over ₹2 lakh on
foreign travel
Electricity expenses more than ₹1 lakh
TCS or TDS over ₹25000
Business turnover above ₹60 Lakhs
Professional income over ₹10 lakh
Last Date for e-filing Income
Tax Return
Generally one can file ITR returns after the financial year ends. The online income tax
return filing deadline is July 31, of the applicable assessment year.
Penalty for Late Filing of
ITR
If the income tax returns are not filed on time it may incur late filing fees and
interest. Here is a complete outline of the same:
If the income tax return is not filed within the due date one
might have to pay a late filing penalty of ₹5000
If the overall income is less than ₹5 lakhs then the penalty amount is further reduced
to ₹1000
Under Section 234a one percent interest collected per month is part of the month for the
unpaid Tax amount.
In India, there are seven distinct ITR forms that each have their own requirements and eligibility criteria. Your income, the sources of your income, and whether you live in India or not will determine which ITR form you must file. Here are the different ITR forms and their eligibility criteria:
ITR-1 (Sahaj): This form is for individuals
with a total income of up to ₹50 lakhs. It is the simplest ITR form and can be filed
by anyone who does not have any complex income sources
ITR-2: This form is for individuals with a
total income of more than ₹50 lakhs. It is more complex than ITR-1 and requires
taxpayers to provide more details about their income and deductions
ITR-3: This form is for individuals who have
income from a business or profession. It is also used by individuals who have
capital gains
ITR-4: This form is for individuals who are
salaried and have opted for the presumptive taxation scheme. This scheme allows
taxpayers to pay tax at a flat rate of 5% of their turnover
ITR-5: This form is for Hindu Undivided
Families (HUFs). It requires HUFs to provide details of their members
ITR-6: This form is for companies. It is a
complex ITR form and requires companies to provide detailed information about their
income, expenses, and taxes
ITR-7: This form is for individuals who are
non-residents of India.
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