Definition: An Income Tax Return (ITR), is a form submitted to report the annual income and taxes payable for the previous year of the taxpayer. The taxpayers file ITR with the Income Tax Department.
The assessee needs to furnish the details of taxable income or loss to the Income Tax Department. Such details are conveyed by way of return of income.
With this form, the taxpayer declares his/her income, expenses, tax deductions, investments, taxes and so forth. There are many reasons to file an ITR even when there is no income.
The computation of the tax liability of a taxpayer on the basis of his or her income. If the return discloses that there is the payment of excess tax during the year, then the individual will get a refund from the Income Tax Department.
According to the Income Tax rules, a return for income has to be filed every year by a person or business entity that has income more than the specified limit. Earning of income by the taxpayer from different sources include:
- Income from salary
- Income from House Property
- Profit and Gains from Business and Profession
- Capital Gains
- Income from Other Sources
Is it compulsory to file ITR?
According to Income Tax Rules, it is necessary to file an income tax return, if the income exceeds the basic exemption limit. The Finance Minister announces the income tax slabs and rates, for various assessees during the budget.
Types of Income Tax Return
Taxpayers receiving income more than the basic exemption limit firstly need to ascertain the type of ITR form that they should fill before they file the return. For different classes of taxpayers, different forms have been prescribed. These return forms are nothing but ITR forms.
ITR-1 (Sahaj)
It is for ordinarily resident individuals with a total income of Rs. 50,00,000 from sources like salary, one house property, other sources, agricultural income up to Rs. 5,000. This form does not apply to NRIs, HUF, or any other enterprise.
ITR-2
It is for individual and HUFs, who are ineligible to file for ITR-1 and who does not have income from profit and gains from business or profession.
ITR-3
Individuals and HUFs file this return, who have income from profits and gains from business and profession.
ITR-4 (Sugam)
Resident individuals, HUF or partnership firms who have chosen for presumptive taxation under sections 44AD, 44AE, or 44ADA.
ITR-5
This form is for all partnership firms, LLP, AOP, BOI, Artificial Judicial persons, Cooperative Societies and Local Authorities. Further, Investment funds, Trusts, Estates of the deceased and insolvents also use this form.
ITR-6
It applies to companies, except those claiming exemption under section 11, i.e. charitable or religious trusts.
ITR-7
This form applies to all persons including companies that need to furnish returns as per the following sections – 139(4A), 139(4B), 139(4C) or 139(4D) or 139(4E) or 139(4F), in essence, Charitable trusts, Political parties, Scientific Research Associations, Universities and Colleges use this ITR to file the return.
ITR – V
An acknowledgement of filing the return of income.
Modes of Filing Income Tax Return
One can use the following ways to file ITR:
- Furnishing the return in paper or physical form.
- Electronically furnishing the return under a digital signature.
- Electronically transmitting the data in return under electronic verification code.
- Electronic transmission of data in return. After that submit the verification of return through ITR-V. In this case, the taxpayer needs to take two printed copies of the form ITR-V. Of these two copies, one is duly signed by the taxpayer. Thereafter, it is to be sent to the Income Tax Department either by ordinary post or speed post.
Point to Note
The taxpayer is not required to attach any document, such as investment proof, TDS certificates and others, along with the form. It is irrespective of the fact whether the filing of a return took place manually or electronically. But the taxpayer needs to keep all such documents, so as to bring them up whenever needed, like at the time of assessment or inquiry.
Due Date of filing Income Tax Return
| Persons (not including a company) not covered under tax audits | Individuals/HUF/AOP/BOI | 31st July |
| Persons covered under tax audits | Business Requiring Audit | 30th September |
| Person who has carried out international transactions and is liable to report under 92E | Businesses requiring TP Report | 30th November |
Documents Required to File ITR
- Form 16: An employer provides this form to an employee. It comprises details relating to the salary they pay and the TDS on it.
- Form 16A: Details relating to TDS deducted on interest received from deposits like Fixed Deposit or Recurring Deposit.
- Form 16B: When the assessee sells the property, TDS is applicable on the proceeds that the assessee gets from the buyer. This form contains all such information.
- Form 16C: This form provides the TDS details of the rent which your tenant pays to you.
- Form 26AS: A form that indicates an extensive statement of taxes against PAN number. It contains all the details like:
- TDS by the employer, bank or any other organization, from which the assessee has received payment
- Advance tax or self-assessment tax paid.
- Proof of tax-saving investments as prescribed from sections 80C to 80U.
A word from Business Jargons
In a nutshell, every citizen whose income is more than the basic exemption limit has to pay income tax to the Government. So, one must file ITR on yearly basis as per the tax slabs specified in this regard. Or else you must be aware of the penalties that it attracts, for not filing timely returns.
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