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What is Income Tax Return (ITR)?

What is Income Tax Return (ITR)

Introduction

ITR stands for Income Tax Return. The Income-tax Act,1961 releases all the ITR forms and specifies the procedures to be followed. This article provides an in-depth understanding of the definition of ITR, the types of ITR forms and How to file ITR.

 

What is Income tax return (ITR)?

ITR, or Income Tax Return, is a form that taxpayers in India file with the government to report their income,investments, and taxes paid. It’s a way for individuals and entities to declare their taxable income, claim tax deductions, and report taxes already paid through TDS (Tax Deducted at Source) or advance tax payments. Filing ITR is mandatory under certain conditions, such as having income above the tax-free limit, possessing foreign assets, or wishing to carry forward losses.

 

Types of Income tax return (ITR)

In India, there are several types of ITR (Income Tax Return) forms designed for different categories of taxpayers based on their income source, amount, and category. Here are the main types:

  • ITR-1 (Sahaj): For individuals being a resident (other than not ordinarily resident) with income up to Rs. 50 lakh from salaries, one house property, other sources (interest, etc.), and agricultural income up to Rs. 5,000.
  • ITR-2: For individuals and HUFs not having income from profits and gains of business or profession.
  • ITR-3: For individuals and HUFs having income from profits and gains of business or profession.
  • ITR-4 (Sugam): For presumptive income from business & profession. For Individuals, HUFs and Firms (other than LLP) being a resident having total income upto Rs.50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE and agricultural income upto Rs.5 thousand.
  • ITR-5: For persons other than individual, HUF, company, and person filing ITR-7.
  • ITR-6: For companies other than those claiming exemption under section 11 (income from property held for charitable or religious purposes).
  • ITR-7: For persons including companies required to furnish return under sections 139(4A), 139(4B), 139(4C), and 139(4D) (like trusts, political parties, institutions, colleges, etc.).

Each form has specific eligibility criteria, so it’s important to choose the one that aligns with your income details and taxpayer status

Click here to download ITRs

 

What is the due dates of ITR filling

Here’s a chart of the due dates for filing Income Tax Returns (ITR) for the Financial Year 2023-24 (Assessment Year 2024-25):

Category of Taxpayer Due Date for Tax Filing FY 2023-24
Individual / HUF/ AOP/ BOI (books of accounts not required to be audited) 31st July 2024
Businesses (Requiring Audit) 31st October 2024
Businesses requiring transfer pricing reports (in case of international/specified domestic transactions) 30th November 2024
Revised return 31st December 2024
Belated/late return 31st December 2024
Updated return 31st March 2027 (2 years from the end of the relevant Assessment Year)

Remember, if you file after the due date, you may have to pay interest under Section 234A and a penalty under Section 234F. It’s always best to file your ITR on time to avoid any late fees.

Conditions when ITR filling are mandatory

In India, filing an Income Tax Return (ITR) is mandatory under certain conditions. Here are some key criteria:

  • If your gross annual income exceeds ₹2,50,000 under the new tax regime.
  • If your business turnover is more than ₹60 lakhs during the previous year.
  • If your professional gross receipts exceed ₹10 lakhs during the previous year.
  • If the aggregate of tax deducted at source (TDS) and tax collected at source (TCS) during the previous year is ₹25,000 or more (₹50,000 for senior citizens).
  • If the deposit in one or more savings bank accounts is ₹50 lakhs or more during the previous year.
  • If you have assets outside India or have signing authority in any account located outside India.
  • If you have deposited ₹1 crore or more in one or more current accounts with a bank during the previous year.
  • If the taxpayer is a company or a firm, irrespective of profit or loss.
  • If you have a loss from business/profession or under capital gains head, you will only be allowed to carry them forward to the next years if you file the return before the due date.

 

Six (6) Reasons Why Should You File ITR?

Filing your Income Tax Return (ITR) is an important financial task. Here are six reasons why you should consider filing your ITR:

  1. Loan Applications: Regular ITR filing can increase your loan eligibility, as financial institutions often require ITRs as proof of income and financial stability.
  2. Proof of Income and Address: For self-employed individuals, ITR filings serve as a valid proof of income and address, which can be particularly useful when regular income documentation is not available.
  3. Smooth Visa Applications: Many countries require proof of financial stability when applying for a visa. Filed ITRs can facilitate a smoother application process and increase the chances of approval.
  4. Avoiding Penalties: Filing your ITR on time helps avoid penalties and interest that can accrue from late or non-filing. It also prevents legal repercussions that may arise from failing to file an ITR.
  5. Carrying Forward Losses: If you incur losses, regular ITR filing allows you to carry forward these losses to subsequent fiscal years, which can be offset against future profits.
  6. Verification of Income and Assets: Filing ITR helps the tax authorities verify your financial details

 

How can I file ITRs

Filing an Income Tax Return (ITR) can be done online through the official e-filing portal. Here’s a simplified step-by-step guide to help you:

  1. Login: Visit the official Income Tax e-filing website and log in using your PAN as the User ID.
  2. File Income Tax Return: Navigate to the ‘e-File’ tab, select ‘Income Tax Returns’, and then ‘File Income Tax Return’.
  3. Select the Assessment Year: Choose the correct Assessment Year for which you are filing the return.
  4. Select the Status: Choose your filing status, such as ‘Individual’, ‘HUF’, or ‘Others’.
  5. Fill in the Required Details: Enter the necessary information such as income details, deductions, and bank account details.
  6. Verify and Submit: After filling in the details, verify your return and submit it.

Make sure you have all the required documents handy, like PAN, Aadhaar, bank statements, Form 16, and investment proofs. For a more detailed guide, you can visit the Income Tax Department’s website.

Remember, it’s important to verify your return after submission to complete the process.

Click here to read our comprehensive guide to the ITR-1 filling

Click here to read our comprehensive guide to the ITR-2 filling

Click here to read our comprehensive guide to the ITR-4 filling

 

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