In India, individuals, Hindu Undivided Families, firms, companies, etc., who earn beyond the basic exemption limit, have to pay income tax for each financial year diligently. Furthermore, to provide the government with information related to earnings during a financial year, a taxpayer has to file Income Tax Returns. ITR is a type of form that assesses have to fill out, declaring their taxable income, expenses, losses and deductions. Filing ITR is mandatory for those with an annual income of more than Rs. 2.5 lakh and a failure to do so can lead to hefty penalty fees.
This article will help you get an overview of ITR and its importance.
For every financial year, starting from April 1 and ending March 31 next year, people earning over a certain limit have to file ITR. It helps the Income Tax Department to calculate one’s net tax liability. Furthermore, tax authorities can assess whether assesses are understating their income or overstating their losses through ITR. Thus, it helps to ensure that there is no tax evasion.
Keep in mind that ITR filing is not mandatory for all income earners. Only those up to the age of 59 years, earning more than Rs. 2.5 lakh, have to file income tax returns. Meanwhile, for individuals above 60 years, the exemption limit is Rs. 3 lakh.
While filing ITR, one has to specify how much income they make from different sources. As per Indian tax laws, income is categorized under the following heads:
It is compulsory for an Indian citizen to file an ITR if the following conditions are applicable:
|Details||Income (in Rs.)|
|Below 60 years||Rs. 2,50,000|
|Above 60 years to below 80 years||Rs. 3,00,000|
|Above 80 years||Rs. 5,00,000|
Under certain conditions, you may have to file an income tax return form even when your earnings don’t exceed the exemption limit. The situations are as follows:
For FY 2021-22 (AY 2022-23), the due date for filing income tax returns is as follows:
|Category of Taxpayer||Due Date|
|Individual/HUF/AOP/BOI (not requiring an audit of books of accounts)||July 31 2022|
|Businesses (requiring audit)||October 31 2022|
|Businesses (Requiring Transfer Pricing report)||November 30 2022|
*Note that these dates can also get extended. Thus, pay attention to any notice released by the Central Board of Direct Taxes.
In total there are almost 9 types of ITR forms available, but only 7 forms are taken into consideration by individuals when filing returns: The various types of income tax returns forms are as follows:
Note* – ITR 5, ITR 6, and ITR 7 forms are only available for companies/organisations.
Such an ITR form is for Indian residents whose earnings for the assessment year 2021-22 cover:
Also Read – Section 194K Of The Income Tax Act
Non-Eligibility for ITR-1 Form
This income tax return form is not applicable in the following cases:
This income tax return form is meant for HUFs and individuals whose earnings cover:
Total earnings from the above-mentioned pointers should exceed Rs. 50,00,000.
ITR-2 is applicable when the earnings of another individual (such as a family member) are to be added to a taxpayer’s earnings and such incomes come under the categories mentioned above.
Non-Eligibility for ITR-2 Form
Taxpayers who earn from professions or businesses cannot file the ITR-2 form. An assessee who needs to file ITR for business income can use the following two forms.
HUFs and individuals who are earning from their professions or who conduct businesses can file the ITR-3 form. The following income sources qualify for this form:
Such an income tax return form is available for partnership firms (except LLPs), HUFs, and individuals who are Indian residents and whose earnings comprise the following:
A freelancer having earnings from the above-mentioned sources can choose a presumptive taxation scheme if his/her gross receipts do not exceed Rs. 50,00,000.
Non-Eligibility for ITR-4 Form
ITR-5 is an income tax return form applicable for an investment fund, business trust, Estate of insolvent, Artificial Juridical Person, Body of Individuals, Estate of deceased, Association of Persons, and Limited Liability Partnership.
This return form must be filed electronically and is available to companies (except for companies that claim exemption u/s 11). Section 11 specifies earnings from properties used for religious or charitable purposes.
Such a form is required for persons who need to file returns under the following sections:
The Income Tax Department introduced an updated version of the ITR e-filing portal that has made filing income tax returns more accessible and easier. Here are the steps to file ITR online:
Step 1: Visit the Income Tax e-Filing portal.
Step 2: New users need to click on the ‘Register’ Yourself’ button. Meanwhile, existing users can log in using their UAN and password.
Step 3: Click on the ‘e-File’ menu and select ‘Income Tax Return.’
Step 4: Select assessment year, form type, filing type, and submission mode (online). Then, click on ‘Continue.’
Step 5: Next, you will be asked to select a reason for filing ITR. Read the options and select the one that is applicable.
Step 6: Fill in your bank details or validate existing bank information.
Step 7: Upon being redirected to a new page, you will see the income tax returns form. Most of the details are pre-filled. Verify all the details and fill in the blank columns.
Step 8: ‘Submit’ the ITR and choose a verification option. The verification process is mandatory, and you can opt for the ‘I would like to e-Verify’ option.
|Applicability||HUF, Individual (Resident)||HUF, Individual||HUF, Individual, Partner of a firm||HUF, Individual, Firm||Partnership firm or LLP||Company||Trust|
|Business Income||No||No||Yes||Presumptive Income||Yes||Yes||Yes|
|House Property||Yes (one)||Yes||Yes||Yes (one)||Yes||Yes||Yes|
|Exempt Earnings||Yes (Income from agriculture below Rs. 5,000)||Yes||Yes||Yes (Income from agriculture below Rs. 5,000)||Yes||Yes||Yes|
Before tax filing, examine the ITR form types carefully.
The income tax return forms provide information about expenses, income and other relevant tax implications. ITR helps assessees compute tax liability, plan tax payables and get refunds for overpaid taxes. The different ITR forms cater to the various requirements of the taxpayers during a financial year.
Ans: Sections 44ADA, 44AE, and 44AD offer a presumptive income scheme wherein a company or an individual can compute their earnings on a notional basis. This means that the earnings are presumed at a specific rate (minimum) depending on the proportion of gross turnover/receipts or on the basis of owning commercial vehicles. However, a taxpayer must file ITR-3 if his/her business turnover is above Rs. 2 crores.
Ans: No, it is not compulsory to attach documents (such as investment statements or TDS proofs) to your ITR forms. However, taxpayers must keep such documents ready since the Income Tax Department may ask to submit the details during enquiry or assessment.
Ans: To simplify the tax payment procedure, the IT department has introduced a website wherein companies and individuals can submit IT returns at their own convenience. You need to visit the e-filing portal of the Income Tax Department to file your tax returns. This website doesn’t charge anything to facilitate e-filing.
Ans: You need to keep the following documents handy while filing ITR:
1. Information related to investments
2. Form 16
3. Bank account details
4. Aadhaar card
5. PAN card
6. Salary slips (for employees)
7. TDS certificate
8. Statement of interest in case of fixed deposits
9. Savings account bank statement showing interest income
10. Form 26AS
Ans: Section 80C provides a tax deduction of Rs. 1.5 lakh (maximum) for specific investments. The tax benefit is available for investing in LIC, ELSS, PPF, etc. Moreover, taxpayers can claim deduction under this section for incurring certain expenses, for example, paying registration fees and stamp duty when purchasing a house.
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