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Overview of Income Tax Return (ITR) Filing in India
Income tax in India is regulated under the Income Tax Act, 1961, and managed by the Central Board of Direct Taxes (CBDT) under the Ministry of Finance. Every person or entity earning income - whether salaried, self-employed, a business, or even a Hindu Undivided Family (HUF) is required to file ITR. ITR is the process of reporting your income, deductions, and taxes to the Government of India. It is filed online at the Income Tax portal. Not filing your ITR on time can lead to penalties or legal action.
Who is Eligible to File the ITR in India?
The following are eligible to file ITR in India:
1. Basic exemption limits
|
Category of Taxpayer |
Old regime exemption limit |
New regime exemption limit |
|
Individuals below 60 years |
₹2.5 lakhs |
₹3 lakhs |
|
Senior Citizens (60 - 79 years) |
₹3 lakhs |
₹3 lakhs |
|
Super Senior Citizens (80+ years) |
₹5 lakhs |
₹3 lakhs |
2. Situations where ITR Filing is mandatory even below exemption limit
|
Condition |
Details |
|
To claim a refund |
If you want to claim a refund of taxes already paid. |
|
Foreign assets |
If you want to claim a refund of taxes already paid. |
|
Applying for a visa/loan |
If you are applying for a visa or a loan. |
|
Companies/Firms |
All companies and firms must file ITR, regardless of profit or loss. |
|
Business/Capital Loss |
To carry forward losses from business/profession or capital gains, you must file before the due date. |
|
High bank deposits in the current account |
If you have deposited ₹1 crore or more in one or more of the current accounts. |
|
High bank deposits in the savings account |
If you have deposited more than ₹50 lakhs in the savings accounts. |
|
Foreign Travel |
If you have spent more than ₹2 lakhs on foreign travel for yourself or someone else. |
|
High Electricity Bill |
If you have paid the annual electricity bill of more than ₹1 lakh. |
|
TDS/TCS Deduction |
If your TDS or TCS is ₹25,000 or more in a year ₹50,000 for senior citizens. |
|
High Turnover |
If the annual turnover of the business is more than ₹60 lakhs. |
|
Professional Income |
If your professional income is more than ₹10 lakhs. |
|
Aggregate TDS/TCS |
If the total TDS and TCS together is ₹25,000 or more in a year |
3. ITR filing for NRIs
|
Condition |
Requirement |
|
Basic Income |
NRIs must file ITR if income exceeds ₹2.5 lakhs (old regime) or ₹3 lakhs (new regime). |
|
Capital Gains |
NRIs must file ITR for capital gains, even if below exemption limit, since they cannot adjust against basic exemption. |
Benefits of Filing the Income Tax Return (ITR) in India
Filing an income tax return (ITR) in India is beneficial for the taxpayer in many ways:
- Mandatory requirement: Under section 139 of the Income Tax Act, 1961, filing the Income Tax Return for individuals and businesses earning above the exemption limit is mandatory.
- Proof of Income: An ITR is an official record of your income. It shows how much you earned in the financial year, which makes you more credible for securing loans and applying for visas for foreign travel.
- Claim Tax Refunds: If you have paid more tax than required through TDS, filing an ITR allows you to claim a refund from the government.
- Carry Forward Losses: Filing an ITR allows businesses and individuals to carry forward losses, which reduces their future tax liabilities.
- Charitable Donations: Donations to charitable causes are deductible under Section 80G of the Income Tax Act, 1961.
Documents Required to File the Income Tax Returns
You need to collect the following documents for filing the ITR in India:
- Aadhaar and PAN Card of the taxpayer and the company
- Bank Statements of the taxpayer/company/firm
- Form 26AS: It is a summary of all the taxes that have been deducted from your income, such as TDS (Tax Deducted at Source).
- Form 16: It is issued by your employer, which gives the details about the total salary + TDS deducted from it.
- Investment and financial documents: If you have invested in shares, mutual funds, or fixed deposits, dividend statements, capital gains reports (if you have sold any assets), and interest certificates need to be attached.
- Proof of other income: Other than your salary, if you have earned from different sources, such as from freelance work, rental income, or interest, you need to attach the documents, such as bonus receipts, interest certificates, rental agreements, and any freelance payment statements, to prove the same.
- Deductions and tax-saving investments: To claim deductions under sections 80C - for investments in PPF, ELSS, etc., 80D - for insurance premiums, or 80G for the charitable donations, you need to attach the documents to prove the same.
- Form 10E (If Applicable): If you have received salary arrears or any special bonuses, then you need to attach the Form 10E - it is used to claim tax relief for those payments under section 89(1) of the Income Tax Act, 1961.
- TDS Certificates: If you have earned income from sources other than your salary, such as rent, interest, or professional fees, then your TDS might have TDS deducted. In this case, you need to attach the TDS certificates from those sources to show that tax has been deducted and deposited with the government.
- Details of Foreign Income (If Applicable): If you have earned from abroad or own foreign assets, you need to disclose all the information in your ITR. Documents such as foreign bank statements, income certificates, or details of foreign investment are necessary to report this income correctly.
Checklist Before Filing the Income Tax Return
Review the following checklist before you file your ITR to avoid unnecessary errors:
1. Personal details:
- Ensure that your PAN and Aadhaar cards are linked together.
- Double-check the details of the bank account.
2. Income documentation:
Collect all forms showing your income from various sources, including:
- Form 16
- Form 26AS
- Proof of income from additional sources
- Bank statements for the year
3. Deductions and exemptions:
Collect all the documents to claim tax-saving deductions:
- Documents for investments in PPF, EPF, ELSS, and tax-saving fixed deposits to claim exemption under Section 80C of the Income Tax Act, 1961.
- Tuition fees for your children to claim exemption under Section 80C of the Income Tax Act, 1961.
- The receipts for premiums paid on health insurance policies for yourself, your family, and your parents to claim exemption under Section 80D of the Income Tax Act, 1961.
- Donation receipts to claim exemption under Section 80G of the Income Tax Act, 1961.
- Medical expenses under Section 80E of the Income Tax Act, 1961, for treatment of specified diseases (It is important for senior citizens).
4. TDS and Tax Payments:
Form 26AS ensures that the TDS deducted by your employer, bank, or any other deductor matches what has been credited to your tax account. Verify that:
- The total TDS reported in Form 26AS matches the Form 16.
- Any advance tax payments made by you (if applicable) are properly reflected in Form 26AS.
5. Overseas assets and income:
Disclose the following if you earn income from a foreign country or have foreign assets:
- Report all the foreign income, including investment(s).
- Bank accounts held overseas: You’ll need to disclose any foreign bank accounts under the Schedule FA section of the ITR form, along with details of the income from these accounts.
- Any foreign property you own, along with its value.
6. Capital Gains and Investment Income:
If you have sold any assets like property, stocks, or mutual funds, make sure to calculate the capital gains correctly and provide the necessary documents:
- Sale deed for property sales.
- Transaction statements from your demat account for shares or mutual funds.
7. Documents for joint property and business interests:
If you own a property with someone or are part of a business partnership, make sure to provide the relevant documents, such as:
- Rental income agreements (for jointly owned property).
- Share of the income earned from the business if you are a partner in a firm or company.
The Process of Filing the Income Tax Return Online in India
Follow the following steps to file the Income Tax Return:
Step 1: Collect the required Documents
Step 2: Choose the correct ITR Form
|
ITR Form |
Who should use it |
|
ITR-1 (Sahaj) |
Resident individuals (not HUFs) who earn income up to ₹50 lakhs |
|
ITR-2 |
Individuals and HUFs that do not earn professional income or income from the business. |
|
ITR-3 |
Individuals and HUFs that earn income from a business or profession. |
|
ITR-4 (Sugam) |
Individuals, HUFs, and partnership firms (other than LLPs) with presumptive income. |
|
ITR-5 |
Partnership firms, LLPs, AOPs, BOIs, and local authorities |
|
ITR-6 |
Companies other than those claiming exemption under Section 11 of the Income Tax Act, 1961. |
|
ITR-7 |
Persons including companies required to furnish return under Sections 139(4A), 139(4B), 139(4C), or 139(4D) of the Income Tax Act, 1961. |
Step 3: Open the Income Tax Portal and log in with your PAN and Aadhar.
Step 4: Click on e-File → Income Tax Returns → File Income Tax Return
Step 5: Fill in the details about your income, and the system will automatically calculate your tax
Step 6: If tax is payable, pay through Challan 280 (online payment). Cross-check all the information.
Step 7: Click on ‘Submit’ and e-verify your return using Aadhaar OTP, Net Banking, Bank Account, or Demat Account.
Penalties for Non-Filing the ITR
|
Condition |
Penalty |
|
Filing after the due date |
₹5,000 |
|
If income is below ₹5 lakhs |
₹1,000 |
Why Choose Kanakkupillai for ITR Filing?
Filing income tax returns can be confusing and time-consuming, but with the right partner, it becomes effortless. Kanakkupillai, with its expertise, offers assistance to ensure that individuals and businesses file their ITR accurately, on time, and without stress. We provide:
- Simple Platform: Our website is easy to navigate, which makes the ITR filing quick for anyone.
- Always on Time: We make sure your returns are filed before the deadline so you never face penalties.
- Step-by-Step Support: From collecting documents to following tax rules, we guide you through the process.
- Stress-Free Filing: File your taxes safely and smoothly without worrying about errors.
Frequently Asked Questions
How do I make an income tax return?
Income tax return filing is the process of reporting income and making government tax payments.Who has to send an income tax return?
Income tax returns are needed for people, businesses, Limited Liability businesses, and Hindu Undivided Families.What benefits exist in sending an income tax return?
Filing income tax forms has benefits like audit protection, credit score, tax refund, and tax compliance.What conditions must be met in order to make an income tax return?
Form 26AS, Form 16, bank accounts, stock records, and proof of income are among the files needed to file an income tax return.How can I send my income tax return?
Payment of any due taxes and filing of the necessary papers allow you to file an income tax return either online or offline.What penalties follow non-filing of an income tax return?
Penalties for filing an income tax return late include fines, interest, and possibly legal charges.Can I send my income tax form online?
Indeed, you may file your income tax return online via the official Income Tax Department website or through approved e-filing sites.Describe the many kinds of income tax forms?
ITR-1, ITR-2, ITR-3, ITR-4, and ITR-5 are the kinds of Income Tax Return forms.When is the income tax return file deadline?
The kind of applicant and the financial year affect the filing date for income tax forms.Can I file an income tax return and then get a refund?
After filing your income tax return, if you have paid more taxes than necessary, you may, in fact, get a credit.What makes Us Different
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