What is a Return of Income?
ITR stands for Income Tax Return. It is a prescribed form through which the particulars of income earned by a person in a financial year and taxes paid on such income are communicated to the Income-tax Department. It also allows carry -forward of loss and claim refund from income tax department.Different forms of returns of income are prescribed for filing of returns for different Status and Nature of income.
What Are The Forms of Return Prescribed Under The Income-Tax?
Under the Income-tax Law, different forms of returns are prescribed for different classes of taxpayers. The return forms are known as ITR forms (Income Tax Return Forms). The forms of return prescribed under the Income-tax Law for filing of return of income for the assessment year 2024-25 (i.e., financial year 2023-24 ) are as follows:
| Return Form | Brief Description |
| ITR – 1 | Also known as SAHAJ is applicable for individuals being a resident (other than not ordinarily resident) having total income upto Rs.50 lakh, having Income from Salaries, one house property, other sources (Interest etc.), and agricultural income upto Rs.5 thousand. |
| ITR – 2 | It is applicable to an individual or an Hindu Undivided Family not having income chargeable to income-tax under the head “Profits or gains of business or profession” |
| ITR – 3 | It is applicable to an individual or a Hindu Undivided Family who has any income chargeable to tax under the head business or profession |
| ITR – 4 | Also known as SUGAM is applicable to individuals or Hindu Undivided Family or partnership firm who have opted for the presumptive taxation scheme of section 44AD/ 44ADA/44AE. |
| ITR – 5 | This Form can be used by a person being a firm, LLP, AOP, BOI, artificial juridical person referred to in section 2(31)(vii), cooperative society and local authority. However, a person who is required to file the return of income under section 139(4A) or 139(4B) or 139(4C) or 139(4D) shall not use this form (i.e., trusts, political parties, institutions, colleges) |
| ITR – 6 | It is applicable to a company, other than a company claiming exemption under section 11 (exemption under section 11 can be claimed by charitable/religious trust). |
| ITR – 7 | It is applicable to a persons including companies who are required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) (i.e., trusts, political parties, institutions, colleges). |
| ITR – V | It is the acknowledgement of filing the return of income. |
Who Needs To File Income Tax Return?
- Individuals with Taxable Income: If your annual income exceeds ₹2.5 lakh under the old regime or ₹3 lakh under the new regime, you are required to file an ITR.
- Senior Citizens (60-80 years): If you are between 60 and 80 years old, the exemption limit is ₹3 lakh under both the old and new regimes.
- Super Senior Citizens (Above 80 years): For individuals above 80 years, the exemption limit is ₹5 lakh under the old regime.
- Non-Resident Indians (NRIs): NRIs must file an ITR if they have any income arising in India, regardless of the amount.
- Assesses who deposit over 1 crore in one or more bank accounts in a financial year must file an ITR.
- High-Value Transactions: If you have undertaken certain high-value transactions, such as purchase or sale of property above certain thresholds, investment in financial assets above a limit, or expenditure on foreign travel exceeding ₹2 lakh, you need to file an ITR.
- Foreign Assets or Income: If you hold foreign assets or have foreign income, you are required to file an ITR.
- TDS/TCS: If your total Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) is ₹25,000 or more (₹50,000 for senior citizens), you need to file an ITR.
Due Date of Filing Return of Income?
| Sr. No. | Status of the taxpayer | Due date |
| 1 | Any company other than a company who is required to furnish a report in Form No. 3CEB under section 92E (i.e. other than covered in 2 below) | October 31 of the assessment year |
| 2 | Any person (may be corporate/non-corporate) who is required to furnish a report in Form No. 3CEB under section 92E | November 30 of the assessment year |
| 3 | Any person (other than a company) whose accounts are to be audited under the Income-tax Law or under any other law | October 31 of the assessment year |
| 4 | A working partner of a firm whose accounts are required to be audited under this Act or under any other law. | October 31 of the assessment year |
| 5 | Any other assesse | July 31 of the assessment year . |
Benefits of Filing Income Tax Return
Filing your Income Tax Return (ITR) has several benefits, even if your income falls below the taxable threshold. Here are some key advantages:
- Easy Loan Approval: Financial institutions often require your ITR as proof of income when applying for loans, making the process smoother. It helps in assessing your creditworthiness and repayment capacity, which is essential for loan approval. For most financial institutions, ITRs from the last 2-3 years are part of the mandatory documentation for processing loans. Sometimes, a consistent ITR filing history can also influence the sanctioned loan amount, potentially leading to higher loan eligibility.
- Startup Funding: Investors often evaluate a startup’s financial health through its ITR. A well-maintained ITR demonstrates transparency and financial stability. A well-maintained ITR reflects the startup’s commitment to compliance and accountability.
- Claim Tax Refund: If tax has been deducted from your income despite it being below the taxable limit, filing ITR allows you to claim a refund.
- Income & Address Proof: Your ITR serves as a legitimate proof of your income and address, which can be useful in various official processes.
- Quick Visa Processing: For visa applications, embassies and consulates usually ask for past ITRs to verify your financial status.
- Carry Forward Losses: If you’ve incurred losses, filing your ITR on time allows you to carry forward these losses to offset against future income.
- Avoid Penalties: Failing to file your ITR when required can lead to penalties. Timely filing helps you avoid such unnecessary expenses.
- For Buying Term Insurance: Insurance providers may require ITR records to approve term insurance plans, as it reflects your annual income.
- Claim Refund of Excess Tax Payments: You can claim a refund for taxes deducted from sources like salary or fixed deposits by filing an ITR.
- Applying Goverment Tenders : ITRs of the previous few years are often required to qualify for government projects. It’s one of the decisive factors to make one eligible to apply for such tenders. ITRs reflect the financial health and stability of a business. Government agencies use this information to assess the reliability and capability of a business to fulfill the tender requirements.
Frequently Asked Questions
1. Is it necessary to attach any documents along with the return of income?
ITR return forms are attachment less forms and, hence, the taxpayer is not required to attach any document (like proof of investment, TDS certificates, etc.) along with the return of income (whether filed manually or filed electronically).
However, these documents should be retained by the taxpayer and should be produced before the tax authorities when demanded in situations like assessment, inquiry, etc.
2. What is the difference between e-filing and e-payment?
E-payment is the process of electronic payment of tax (i.e., by net banking or SBI’s debit/credit card) and e-filing is the process of electronically furnishing of return of income.
Using the e-payment and e-filing facility, the taxpayer can discharge his obligations of payment of tax and furnishing of return easily and quickly.
3. Can a return be filed after the due date?
4. Can a return of income be filed after the expiry of due date to file belated return?
The Finance Act 2022, has inserted subsection (8A) in section 139 to enable the filing of an updated return. The section provides that an updated return can be filed by any person irrespective of the fact whether such person has already filed the original, belated or revised return for the relevant assessment year or not (subject to certain conditions).
An updated return can be filed at any time within 24 months from the end of the relevant assessment year.
5. If I have committed any mistake in my original return, am I permitted to file a revised return to correct the mistake?
A return of income can be revised at any time 3 months before the end of the assessment year or before the assessment whichever is earlier.
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