Income Tax Return Filing

An Income Tax Return (ITR) is a form that individuals and businesses in India file with the Income Tax Department to report their income and tax liability for a particular financial year. The ITR is used to calculate the taxpayer's tax due and determine whether they are eligible for a refund.

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What is an Income Tax Return Filing?

An income tax return is proof of your paid taxes for a particular assessment year. The tax return proof contains the details of your annual earnings and the tax amount you have paid. This makes it easier for every taxpayer to calculate the tax liability, schedule tax payments, and refund requests for overpayment of tax. 

To complete the income tax return process effortlessly, you should know about the various ITR (Income Tax Return) forms related to the entire process. The Central Board of Direct Taxes (CBDT) notifies about these forms every year.

ITR Forms

To file an income tax return, the required forms are as follows:

Form Applicable to
ITR-1 For salaried persons, house property owners, and those who earn interest, with a total income of up to INR. 50 lakh
ITR-2 HUFs and individuals not having an income out of proprietorship
ITR-3 HUFs and individuals having income from a business or profession under a proprietorship
ITR-4 For HUF, individuals or firms opting for a tentative taxation scheme
ITR-5 For LLP or Limited Liability Partnership, firms, AOP (Association of Persons), Artificial juridical person, BOI (Body of Individuals), Registered societies, Private Discretionary Trust, Local authority, and Cooperative societies. However, an individual who is eligible under ITR-7 will not utilize this form to file an income tax return
ITR-6 For companies who are not claiming tax exemption under section 11
ITR-7 Individuals and companies are required to produce income tax returns under sections 139(4E), section 139(4F), 139(4D), 139(4C), 139(4B), and 139(4A) of the Income Tax Act 1961

ITR Filing Due Date AY 2023-24

Those who need to be audited must file an ITR before July 31st, 2023 as per the Income Tax Laws. There are no extensions announced for AY 2023-24 to date.

Why is it Important to File the ITR?

Income tax filing is a legitimate way to prove one's income. It is an important document and more elaborate than Form 16, which is proof of your salary and tax deduction by the current employer. Filing Income Tax Returns (ITR) is mandatory under various circumstances. Here's why it is important:

  1. Tax Liability:

    Individuals falling within the respective tax slabs are required to file ITR. This includes those whose income exceeds the exempted limit.

  2. Companies and Firms:

    Companies or firms, irrespective of profit or loss, are mandated to file ITR every financial year.

  3. Tax Refund:

    Filing an ITR is necessary to claim a tax refund. Individuals who have excess TDS deducted or are eligible for other refunds must file their returns.

  4. Loss Carryforward:

    If there is a loss under a head of income that needs to be carried forward to subsequent years, filing ITR becomes imperative.

  5. Global Financial Interests:

    Residents with financial interests abroad or holding assets outside India must file ITR. This includes being a signing authority in a foreign account.

  6. Specific Income Sources:

    Individuals receiving income from trusts, charitable organizations, political parties, educational institutions, and other specified entities must file ITR.

  7. Loan or Visa Application:

    Filing ITR is often a prerequisite when applying for loans or visas, demonstrating financial credibility.

  8. NRI Taxation:

    Non-Resident Indians (NRIs) earning income from Indian sources are subject to taxation in India, necessitating the filing of income tax returns.

**With the introduction of e-filing, certain cases require electronic filing, including when a refund is required, gross total annual income exceeds Rs.5 lakh. In this case, specific ITR forms (3, 4, 5, 6, 7) must be mandatorily e-filed.

Income Tax Slabs for Assessment Year (AY) 2023-24

Individuals and HUF below 60 years can choose to follow the Old or New Tax Regime. However, people should give more preference to the old tax regime because it offers more deductions and exemptions, which can potentially reduce your tax liability.

  1. Old Tax Regime

      Income Slab Applicable Tax Rate
    ₹0 - ₹2,50,000 -
    ₹2,50,001  - ₹5,00,000 5%
    ₹5,00,001 - ₹10,00,000 20%
    ₹10,00,001 - ₹15,00,000 30%
    >₹15,00,001 30%
  2. New Tax Regime

    Annual Taxable Income Applicable Tax Rate
    Up to ₹3,00,000 Nil
    ₹3,00,001 to ₹6,00,000 5%  (Tax rebate under section 87A)
    ₹6,00,001 to ₹9,00,000 10% (Tax rebate under section 87A up to Rs. 7,00,000)
    ₹9,00,001 to ₹12,00,000 15%
    ₹12,00,001 to ₹15,00,000 20%
    Above ₹15,00,000 30%

Invest & Save upto ₹46,800 per annum in taxInvest & Save upto ₹46,800 per annum in tax

Who Can File Income Tax Returns Online? 

Individuals falling under the following categories are eligible to file ITR:

  • Those earning Rs. 5 Lakhs and above

  • Individual/HUF dweller with possessions positioned outside the country

  • A firm (falling under guidelines of section 44AB), Cooperative Society, BOI, AOP, Artificial Juridical Person, and Local Authority (ITR 5)

  • An assessee responsible for producing returns U/S 139 (4B) (ITR 7)

  • Resident of India with signing authority of any account that you are holding outside India

  • If you claim relief under sections 90 or 90A or the deductions were claimed as per section 91

  • All companies

To submit the proof, you need to prepare a comprehensive report of the audit under sections 10(23C) (via), 10(23C) (VI), 10(23C) (v), 10(23C) (IV), 10A, 12A (1) (b), 44AB, 80IA, 80IB, 80IC, 80ID, 80JJAA, 80LA, 92E or 115JB.

According to Section 11(2) (a), the return filer needs to give notice to the assessing officer.

What are the Ways of Filing Income Tax Returns Online?

  • Digital Signature Certificate (DSC) for income tax filing online. A chartered accountant is required in case you wish to file IT forms with the help of a Signature Certificate (DSC).

  • For online tax filing without using DSC, an ITR V form is formed. This form needs to be printed and signed. Then after completing the formalities, you need to submit it to CPC, Bangalore. You can do this through speed post or even speed post but make sure it reaches you within 120 days of filling out your form.

  • While income tax return filing online, there is no compulsion to file it using an E-return Intermediary (ERI), or you can do so without a digital signature certificate DSC.

What are the Documents Required for Income Tax Returns Filing Online?

Mentioned below is the list of documents that you need for the online filing of income tax returns:

  • Salary Pay slips

  • TDS certificate

  • Form 16A, 16B, 16C

  • Tax Saving Investments Proof

  • Form 26AS

  • Bank statements

  • Interest certificates

  • Pan card

What are the Steps to File an Income Tax Return?

Filing income tax returns is now easier with the updated Income Tax Department portal. Follow these quick steps for FY 2022-23:

  1. Online Method

    • Assess Tax Liability: Determine your tax liability based on Income Tax rules.

    • Check Form 26AS: Review TDS payments in your Form 26AS for the assessment year.

    • Identify Category: Determine your taxpayer category based on eligibility criteria.

    • Visit Official Portal: Go to the Income Tax Department's e-filing portal.

    • Register/Login: Register if new; login if you have an account.

    • Access 'File Income Tax Return': Click on 'File Income Tax Return' under the 'e-file' tab.

    • Choose Category: Select your taxpayer category (individual, HUF, etc.).

    • Select Appropriate ITR Form: Choose the relevant ITR Form for your financial situation.

    • Enter Bank Details: Provide or pre-validate your bank account details.

    • Review and Confirm: Check and validate pre-filled details on a new web page.

    • Verify and Submit: After validation, verify returns and send a hard copy to the Income Tax Department.

  2. Offline Method

    Filing your Income Tax Return (ITR) offline can be a convenient option for those who prefer a manual approach to ensure accuracy in their financial data. Here's how you can navigate through the process:

    • Visit the Portal: Go to the Income Tax e-Filing portal.

    • Download ITR Utility: From 'Downloads > IT Return Preparation Software,' download the relevant ITR utility.

    • Open Utility: Extract the ZIP file and open the utility from the folder.

    • Enter Information: Fill in all required details in the ITR form.

    • Review Form: Double-check all tabs for accuracy.

    • Generate XML: Save the filled ITR form as an XML file.

    • Log In: Enter your PAN, password, and captcha to log into the e-Filing portal.

    • Select ITR: Under 'e-File,' choose 'Income Tax Return.'

    • Provide Details: PAN will be auto-filled; select Assessment Year and ITR Form.

    • Filing Type: Choose 'Original/Revised Return.'

    • Submission Mode: Select 'Upload XML.'

    • Verification: Choose the verification option and submit.

    • Confirmation: Receive a confirmation message upon successful submission.

How to File ITR Without Form 16? 

Filing your Income Tax Return (ITR) without Form 16 is manageable with these brief steps:

  • Assess Income Sources: Determine total income from salary, rent, capital gains, and interest.

  • Check Form 26AS: Download and review Form 26AS from TRACES to calculate Tax Deducted at Source (TDS).

  • Calculate TDS and HRA: Compute TDS and, if applicable, claim House Rent Allowance (HRA) deductions.

  • Determine Total Income: Calculate overall income, considering all earnings and TDS deductions.

  • Claim Eligible Deductions: Include eligible deductions on investments and payments in your taxable income calculation.

  • Calculate Taxable Income: Deduct total eligible deductions from your income to find your taxable income.

  • Compute Tax Liability: Apply relevant tax slab rates to determine your tax liability for the year.

  • Determine Tax Payable or Refund: Pay the difference if TDS is less than the tax liability. If TDS exceeds, anticipate a refund.

  • File Your IT Returns: Armed with these calculations, proceed confidently to file your Income Tax Returns.

What are the Things to Know Before Filing ITR Online?

Choosing the right form to file an income tax return online can be confusing. You must select your Tax Return forms according to the categories you fall in. These categories are listed in the tabular form below:

  1. Look at tax credit - Form 26AS Vs. Form 16

    Before initiating the online income tax return filing, look at Form 26AS. This form shows the total tax that gets deducted from your income, and your employer deposits this to the IT department.
    Make sure that the tax deducted depends on Form 16. This also has to match with the facts in Form 26AS. In case you fail to file your income tax returns online without any errors, the IT department sends you a notice.

  2. Claim 80G, certificates for savings, and several other deductions

    Extra deductions can be claimed in case you have not claimed them. Deductions can also be claimed under section 80G if you have donated to charitable institutions.

  3. Interest statement – Interest paid on savings accounts and fixed deposits

    A deduction of about Rs 10,000 is permissible with the best interest earned on your savings accounts. On the other hand, the interest levied on bank deposits is a division of the taxable income.

    Including the elements mentioned above, make sure that you keep the following documents handy:

    • Bank Account statements

    • Certificates for Tax Deducted at Source (TDS)

    • Profit and Loss Account Statements, Audit Reports, Balance Sheet 

Conclusion

An income tax return should be filed in a timely manner to avoid a late fee penalty. It should be filed by every individual whose total income exceeds the basic exemption limit. In addition, it is the duty of every individual to pay income tax, as it is the primary source of income for the Government to generate revenue. 

FAQ's

  • How much is the penalty for late filing of the Income Tax Return?

    The penalty for late filing of ITR can be up to Rs. 5,000 for individuals with a total income exceeding Rs. 5 lakh. For individuals with an income of less than Rs. 5 lakh, the penalty is Rs. 1,000.
  • Can I submit my Income Tax Returns without Form 16?

    Yes, you can file your Income Tax Returns (ITR) without Form 16.
  • Should salaried employees file the ITR?

    Salaried employees in the taxable income bracket are required to file the ITR.
  • If I've paid advance taxes and have no dues or refunds, can I skip filing my income tax return?

    No, filing your ITR is mandatory. It provides the government with a comprehensive record of your income distribution.
  • Do I need to file an ITR if my company deducts my TDS?

    Deduction of TDS and filing of ITR are two legal obligations one needs to fulfill. An individual must file the ITR to show if he has paid the tax. In addition, the ITR has become an essential means to file for a loan and visa.
  • How may an assessee pay the tax to the Government?

    An assessee is required to visit the official website of the Income Tax Department, where he may pay his tax using net banking or debit card using challan 280.
  • What if I forget my user ID?

    Generally, the PAN card number is considered as the USER ID to log in to the e-filing portal. Hence, an individual may check the PAN card number in order to log in to the portal.
  • Can I file the ITR?

    Yes, ITR 1 and 6 are simplified returns that an individual may file without special knowledge.
  • Who can file an income tax return?

  • What are the benefits of filing income tax returns?

    An assessee may get several benefits by filing income tax returns. Listed below are the advantages of filing income tax returns.
    1. Avoid penalties

      It is important to file the income tax return at a stipulated time to avoid any penalties an assessee might be liable to pay.

    2. Tax Notices

      An individual should avoid getting notices from the taxation department since it may harm his goodwill if it gets public.

    3. Tax Refund

      An individual, by filing ITR, may claim a refund such as TDS.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
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