Taxes in India are grouped into direct and indirect taxes.
Direct tax is where the total burden of tax payment falls on the taxpayer as in the cases of wealth tax, income tax etc.
Whereas in indirect taxes, tax payment is made via third parties like in VAT, Service tax etc.
Income tax is the Government of India’s main source of revenue, as it is the largest tax resource in the country. Income tax is collected from individuals as well as organizations- the only exception here is agricultural income.
This income can come from one’s salary, securities’ interests, dividends, lottery winnings, capital gains, fees from professional services, insurance commission, rent payment, royalty payments or any other sort of profit.
The total tax calculated based on an individual’s previous year’s income is paid in the current assessment year, if her/his income falls under any of the tax slabs set by the Income Tax Department.
Income Tax Return (ITR) works as a proof of tax payment, that consists of one’s income details and the tax paid by her/him on her/his income.
It is mandatory for all earning Indian citizens to file ITR annually, provided they fall into the income tax slab. In case you haven’t paid your income tax, you will be liable to pay penalties or face other legal consequences.
Filing Income Tax Return ensures that one is able to get a refund if s/he has paid more taxes than her/his tax liability. In the current scenario, according to the Income Tax Act, anyone whose total income exceeds Rs. 2.5 lakhs should file ITR. For senior citizens who are below the age of 60, the maximum income limit set is Rs. 3 lakhs while those who are above 80 years of age, it is Rs. 5,00,000.
If anyone wants to claim a tax refund, be it a firm or an individual, they will have to file Income Tax Return, regardless of whether they made a profit or a loss or have any tax liability or not. Currently, ITR filing has become a mandatory check when applying or being considered for a loan/visa.
All taxpayers (Association of Persons, Body of Individuals (BOI, Hindu Undivided Family (HUF), and Individuals) are required to file ITR by the due date of 31st July every year. However, individuals with accounts that require auditing, should file Income Tax Return by 30th September. The Indian Government provides the forms to file ITR depending on an individual’s income type.
It is a form that has details pertaining to all the income and tax payment made by a particular person or organization in a given financial year. The different forms which range from ITR-1 to ITR-7, ITR-4S and ITR-V are available on the Income Tax Department online portal. Once the relevant forms have been adequately filled, they are submitted to the Income Tax Department.
Yes, ITR filing is necessary for every individual including:
All individuals- residents or non-residents, who earn their income using Indian resources are eligible to file ITR by filing-in the ITR forms 3 to 7.
The Government of India has made several forms available to file ITR depending on an individual’s type of Income. These Income Tax Return forms are listed below:
This form is also called SAHAJ and it deals with salary income, pension income, house or property income, interests earned and any other income excluding lottery or horse racing income. It is tailor-made for individuals.
This form is uniquely created for individuals and HUF (Hindu Undivided Families), who have any additional income apart from professional and business gains.
Such income may include partnership firm remuneration that is not from carrying out business under proprietorship, bonus, commission, interests earned from profit in a business, income from more than one house property, agricultural income that is above Rs. 50,000, etc.
This Income Tax Return form is for individuals and HUFs that derive their income from any business/ professional gains or profits.
This Income Tax Return form is for individuals and HUFs that derive their income from any business/ professional proprietorship.
This is a form designed for HUFs and individuals who prefer the presumptive taxation scheme as specified in Section 44AD, 44ADA or 44AE. It is also referred to as the SUGAM.
This form is specifically designed for entities like firms, BOI, LLP (Limited liability partnership), AOP (Annual Operations Plan), co-operative society, artificial juridical person, local authority etc.
It is also important to note that this form is not to be used by any entity that files ITR under Section 139(4A), (4B), (4C) or (4D). This includes all political parties, colleges, trusts, institutions etc.
The form is for companies other than those eligible to claim a tax deduction or exemption in Section 11 of the Income Tax Act.
This is specifically for all entities who file ITR under section 139(4A), (4B), (4C), or (4D).
This is a verification form or an acknowledgement form that is received once one has filed his/her Income Tax Return.
It is of great importance to file Income Tax Return in the appropriate form. To do so, it is important to keep in mind the following:
Political parties should file under Section 139 (4B) if their income exceeds the maximum un-taxable limit. All research associations, institutions as per section 10 (23A and 23B), news agencies should follow the process as specified under Section 139 (4C). Section 139 (4D) is for all Universities, colleges and institutions.
One can get access to loads of benefits by going for online ITR filing:
The Income Tax Department of India has simplified the process of e-filing tax returns. They have made it possible to file your tax returns offline as well as online. To e-file your taxes offline, one needs to visit the Income Tax Department website and follow the given steps:
If you have downloaded the Java Utility form, you need to follow these steps:
If you have downloaded the Excel form:
While submitting, it is crucial to attach your bank statements, previous year’s ITR copy, deduction or saving certificates, TDS certificates, Interest statements, P & L statements (Profit & Loss Statements) and balance sheets where applicable.
Keep the important documents handy before you start e-filling online so you can upload the relevant document readily when required. This includes your bank statements, previous year’s ITR copy, deduction or saving certificates, TDS certificates, Tax Credit Statements, Interest statements, etc.
Please follow the given steps: