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Income Tax Return




ITR (Income Tax Return)

An Income tax return is a Tax form used to file income tax with the Income Tax Department. Section 139 of the Income Tax Act makes the filing of return necessary for a certain class of taxpayers. As per the law Income tax returns must be filed every year for an individual or business that received income during the year whether through regular wages, interest, capital gains, and other sources. Irrespective of the fact that it relates to an individual or a business Tax returns, must be filled by a specific date.






As per the rules and regulations of India tax system. Filling of income tax is very important and mandatory in India and in case you fail in filling the income tax return you may have to face legal consequences for it. Filling of Income Tax Return is important as it provides proof of your income so it cannot be calculated as black money in the future.

Filling Tax Return is an activity that has been done annually as a moral and social duty of every responsible citizen of a country. Below are some of the benefits of filing Income Tax returns.

1. Claiming refund: If a person has paid excess tax on his income, then he can file for a refund from the Income Tax Department. It is mandatory that you file ITR to get this refund. Many people don't file ITR as they think ITR on their income has already been deducted. But it might happen sometimes an employer has paid more tax on their behalf. So, in that case, the filing of ITR will lead you to ask for a refund from the Income-tax department.

2. Ease of getting loans: In case you apply for a loan such as home loan, car loan, etc. then the Income Tax Return for the last 2-3 years is asked as a mandatory document.

3. Helpful for small earning people: Various people get small incomes such as Dividends, Family pension, Interest on banks/company deposit. These people might have an income below the taxable limit and they might feel they don’t have to pay any tax. But again filing ITR will give a legal proof of their income

4. Visa processing: If you are traveling out of the country or planning to travel in the future then proof of your earning is required. If you are an employer in any organization then-employer certificate will work but if you have your own business or self-employed then details of your income is needed to be submitted. In such cases, ITR will work as income proof.

5. Buying an insurance cover: When you buy a higher life insurance cover insurance company will also ask for the proof of your income to assess the cover amount provided to you. In such cases salary slip, ITR or bank statement of last 3 years are required. There might be a possibility that you don't get a salary receipt then bank statement and ITR will serve as proof.

Documents required for ITR filing

  • Form 16A/ TDS certificate

  • Documents on the purchase and sale of investments

  • Collect TDS certificate

  • Statement related to home loan

  • Proof of investments and Form 16A

  • Abstract of Bank statements

  • PAN card

  • Aadhar card

The process to file ITR Online

Step1:  Visit the e-filing website https://incometaxindiaefiling.gov.in

Step 2: Login to e-file your returns

Step 3: Register to e-file ITR

Step 4: Select the user type

Step 5: Basic details must be filled

Step 6: Fill the registration form

Step 7: Verification of PAN

Step 8: Activation of Account

There are almost 9 types of ITR forms available for the taxpayer to file his taxes but only a few are taken into the consideration by the people when filing the return.

ITR-1:

It is also known as Sahaj form and is to be filled solely by an individual taxpayer. This form is applicable to the following people

  • A person who earns via salary or through other sources such as pension

  • Who earns income from one house property

  • Individual who do not have any other income source from the country outside India

  • Person whose income from agriculture is below Rs. 5000

  • Who have not earned income from sources such as lotteries, horse racing etc

ITR-2:

ITR 2 form is useful for individuals who earn income from the countries outside India. Mostly HUF (Hindu Undivided family) can avail the benefit of this form to file their IT returns. This form is applicable to the following given below

  • A person who earns via salary or through other sources such as pension

  • A person who earns money from more than one housing property

  • Who earn income from countries outside India

  • Whose income from agriculture is above Rs. 5000

  • Whose source of income is through the sale of property or asset in India

ITR-3:

ITR-3 form is useful for an individual taxpayer and HUF (Hindu Undivided Family) being partners in firms which are not doing any business or profession under partnership and are not getting any sort of Income like salary, bonus, commission etc from that firm

ITR-4

This is useful to those individuals who conduct business and earn income from the profession. It is applicable for all types of businesses without any limit on the income earned. Taxpayers can also club the income from sources like lotteries, housing properties etc along with the income earned from the business. Individuals with the profession like doctors, shopkeepers, designers to agents, retailers and contractors are eligible to file an Income tax return using this form.

ITR 5:

This form is used by the following

  • Limited liability partnerships (LLP)

  • Association of person

  • Co-operative societies

  • Local authorities

  • Firms

  • Body of Individuals

ITR-6:

E-filing Income tax return is applicable for those organizations other than those claiming exemptions under section 11. Companies that claim tax exemptions as per section 11 are the companies in which the income is collected from the property used for the purpose of religion or charity.

ITR-7:

This is applicable to those companies or individuals who are required to submit their returns under the following sections given below:

  • Section 139(4A)

  • Section 139(4B)

  • Section 139(4C)

  • Section 139(4D)

Resolve your queries

1. What is ITR?

ITR stands for Income Tax Return is a form in which taxpayers file information about the income he earns and tax applicable by the Income-tax department. There are 7 major forms notified by the department i.e. ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, & ITR 7. Every taxpayer is required to file his ITR on or before the specified due date. The applicability of ITR form differs depending upon the source of income of the taxpayer, the amount of income he earns and the category to which the taxpayer belongs like individuals, HUF, company, etc.

2. What are the forms of return prescribed under income tax law?

Different forms of returns are prescribed for different classes of taxpayers under the Income-tax law.

ITR 1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, ITR-7

3. Who can use ITR-1?

Return Form ITR-1 can be used by an individual whose source of income is:

1. Income from salary/pension

2. Income from house property

3. Income from other sources

4. Who cannot use ITR-1?

1. One who is non-resident

2. Whose total income of the year includes income from more than one house property

3. Whose total income of the year includes an agricultural income of more than Rs. 5000

4. Whose total income includes income from business

5. Who has claimed relief under section 90 or 91

6. A resident having income from any source outside India

7. Any resident having any asset located outside India

5. What is the eligibility to file ITR (Income Tax Return)?

It is necessary to file Income tax returns (ITR) in India if any of the below conditions are applicable to you.

  • If your gross annual income is more than Rs. 2.5 lakhs in case of individuals below 60 years, More than Rs. 3 lakhs in case of individuals above 60 years but below 80 years and More than Rs.5 lakhs in case of individuals above 80 years.

  • If an individual has more than one source of Income like house property, capital gains, etc.

  • If a taxpayer want to claim an Income tax refund from the department

  • If a taxpayer is a company or a firm, irrespective of profit and loss

  • If an individual has invested or earned from foreign assets.

6. What is the e-filing utility provided by the Income-tax Department?

To generate e-return and furnishing of return electronically, the income tax department has provided free e-filing utility. The e-filing utility provided by the Income-tax Department is simple, easy to use and also contains instructions on how to use it. By using e-filing utility, a taxpayer can simply file their return of Income.

7. If excess tax has been paid how will it be refunded to me?

In case a taxpayer has paid excess tax then the excess tax can be claimed as a refund by filing Income Tax Return. It will be refunded by crediting it in the bank account of the taxpayer through ECS transfer.

8. Is the income of agriculturists taxable?

No, Agriculturist income is not taxable. In case you have non-agricultural income then when calculating tax non-agricultural income, your agricultural income will be taken into the account for the rate purpose.

9. Do I need to maintain proof or record of earnings?

From every source where you are earning you have to maintain proof of earning and the records specified under the Income-tax act. Maintaining records can help you to claim for the income tax return.

10. Can a return be filed after the due date?

Yes, if one could not file the return of income on time or before the due date, then he can file a belated return. This belated return can be filled within a period of one year from the end of the assessment year or before the completion of the assessment year whichever from the two is earlier but besides, it will attract some interest and penalties.





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