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Income Tax Return Filing

Income Tax Return Filing is a synopsis of tax assessee files information about his income and tax thereon to Income Tax Department in India.

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What is Income Tax Return Filing?

Income Tax Return filing is the process of providing a declaration about the Income and Expenditure of the taxpayer to the Income Tax Department. This declaration is used to determine the tax liability of the taxpayer.

The tax liability is decided based on the current tax rate slab. The income tax department prescribes this tax slab.

ITR Filing is mandatory for Taxpayers whose income exceeds the prescribed income limit. This process is regulated under the Income Tax Act 1961.

The declaration contains details about the income earned during the period of 1st April to 31st March.

(If you want to know the income tax payable by you, then you can use this calculator – Income Tax Calculator)

Who Should File an Income Tax Return?

Following has to file Income Tax Return:

  • Individuals (Resident of India & NRI’s) – Mandatory for people exceeding the prescribed income limit. Optional for others
  • Sole Proprietors
  • Companies
  • LLPs and Partnership Firm

The ITR filing is mandatory for Partnerships Firm, Sole Proprietorship Firm, Companies, and LLPs irrespective of their turnover, income, profit or loss.

Benefits of Filing Income Tax Returns

There are numerous benefits of Income Tax Return Filing. Some of them are as follows:

  • Proper Documentation of Financials
    ITR Filing documents are proof of financials. Proper financial documentation is a must for availing loan or visa.

  • To Avoid Notice from the Income Tax Authority
    In case of late or wrong submission of ITR, notice is served by the Income Tax department.

  • Carry Forward Losses
    With ITR Filing, losses can be carried forward against house property & depreciation.

  • Income Tax Refund
    At the time of Income Tax Return filing, you can claim for Income Tax Refund.

  • For Speedy Visa Processing
    For speedy visa processing, embassies ask for the submission of Income Tax Return for the last 3 years.

Due Dates for the Income Tax Return Filing

ITR filing due dates differs in case of the individual and corporate taxpayer. In the case of individual, income tax return filing due time is 31st July for the people earning salary.

People who are earning their income from business or self-employment need to file their income before 31st March.

While income tax return filing is mandatory till 30th September in case of companies and taxpayers for who tax audit is compulsory.

How to File an Income Tax Return?

A taxpayer can file his Income Tax Return online on the Website of Income Tax Department. However, it is advisable to take the help of industry professionals.

Taking assistance from professionals can help in filing the right declaration of income, get an appropriate refund and avoid penalties for late or incorrect filing.

A 15-digit acknowledgment number will be generated once the Income Tax Return is filed. After this, you have to verify your tax return. ITR can be filed using Net banking accounts.

Documents for Income Tax Filing

The following shall be required in case of ITR Filing:

  • Basic information such as PAN, Aadhar card number, and detail of the current address will be required.
  • Bank account details will be required of the given financial year. For ITR filing, it is a mandatory disclosure.
  • Other disclosures regarding income from salary, fixed deposits, savings bank account are also required.
  • Information regarding deduction claimed under section 80.
  • Information regarding TDS return filing and advance tax payments.

What are the different ITR Deductions Available?

  • Deduction under Section 80C
    The amount paid or deposited in PF, PPF, LIC premium paid, NSC (National Savings Certificate), ULIP, principal repayment of housing loan, tuition fees, term deposit in the bank, deposit in Senior Citizen savings scheme, etc.

  • Deduction under Section 80D
    It can be claimed by individuals as well as HUF for medical insurance & preventive health checkup.

  • Deduction under Section 80E
    Individuals can request for an 80E deduction for the repayment of interest on the loan, concerning a loan obtained for a higher education.

  • Deduction under Section 80EE
    An additional deduction can be claimed under this section like interest paid on housing loan paid through EMI.

  • Deduction under Section 80G

    The deduction under section 80G is claimed in respect of the donations to specific funds, charitable institutions.

Common Mistakes at the time of filing Income Tax Return

Some of the common errors which must be avoided at the time of ITR Filing are listed below.

  • Selection of the wrong form
    One should select the correct ITR form based on the income and category of the taxpayer.

  • Selection of the Wrong Assessment Year
    Correct assessment year must be ensured at the time of ITR filing; otherwise, it may attract double taxation and unwanted penalties.

  • Incorrect input of details
    At the time if ITR, it must be ensured that personal information of the assessee such as name, address, E-mail Id, mobile number, PAN, date of birth are correct.

  • Not disclosing the complete source of Income
    All the income generated from any source other than the primary reference must be fully revealed irrespective of the fact that it is taxable income or exempt.

  • TDS is not reconciled with form 26AS
    Form 26AS must be reconciled with form 16.

  • Verification of return
    After the Income tax return filing, it must be e-verified through net-banking, or EVC process on mobile number and via email.

Penalty for Non filing of Income Tax Return

There are specific penalty provisions in case taxpayer does not file ITR on time. The penalty is charged, on the late payment of income tax. The maximum amount for penalty is Rs 10,000/-.

Frequently Asked Questions

Q1. Is it required to file Income Tax Return when my company deducts all the TDS?

TDS deduction and Income Tax return filing are not the same things. Income Tax return Is filed to show that all the taxes have been paid by you.

 
Q2. How can I pay my tax liability to the government?

Taxes can be directly paid by the taxpayers on the website of the Income Tax Department using Net-banking with challan 280.

 
Q3. What is ITR-V?

After income tax return filing, a document is received by you which is ITR V. One has to take a print of that, sign and send within 120 days of income tax return filing to the Income Tax Department.

 
Q4. Can ITR-1 be filed with exempt agricultural income?

In case agricultural income is up to Rs 5000 then ITR 1 can be filed. However, if the agricultural income exceeds Rs 5000 then ITR 2 is required to be filed.

Q6. Which form I have to file for my Income Tax return filing?

This is no wonder that people get confused while applying for income tax return filing. There are various forms for income tax return filing such as ITR 1, ITR 2, ITR 2A, ITR 3, ITR 4, ITR 4S, ITR 5, ITR 6 and ITR 7. Suitable Form is selected as per the eligibility of the taxpayer. If you are applying for income tax return and need assistance then you can take the help of Enterslice.

Q7. If I don't have a Form 16 then how can I file my income tax return?

Even if you don't have Form 16 you can file your income tax return. For this, you must have your pay slips. We can help you with the same.

Q8. Is there any requirement to attach any documents with income tax return filing?

No, while filing income tax return there is no need to file any other document. However, documents may be asked by the authorities for the purpose of assessment, inquiry, etc.

 
Q9. Do I have to file income tax return even when I don't have any positive income?

Income tax return must be filed before the due date even if there is a loss in the financial year because it can be carried forward to the subsequent year for the adjustment against the profit in the subsequent years. If you have filed your income tax return before the due date only then it can be carried forward.

 
Q10. Can someone file Income Tax return on my behalf?

In order to prevent any kind of fraud, you should not share your PAN and password details. You can take the assistance of chartered accountants and CA firms for income tax return filing. We have a team of dedicated chartered accountants for this purpose.

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