Income Tax Filing (ITR)

What is an Income Tax Return (ITR)?

An Income Tax Return (ITR) is a document you file with the Income Tax Department in India. It acts as a report of your income earned and the taxes you owe for a particular financial year (April 1st to March 31st of the next year).

Here's how an ITR helps you with your taxes:

• Declaring Your Income: In the ITR, you'll detail all your income sources, including salary, business income, rental income, investments, and others.

• Calculating Tax Obligation: The ITR helps determine your total tax obligation based on your income and deductions claimed.

• Claiming Refunds: If you've paid more tax than required during the year, filing an ITR lets you claim a refund from the Income Tax Department.

According to the Income Tax Act of 1961, individuals under 60 must file an ITR if any part of their income is taxable. There's also a mandatory filing requirement if your taxable income exceeds Rs. 5 lakh in a financial year or if you've paid advance tax. When you file your ITR, you must also pay any taxes due as per the applicable income tax slabs.

Different Types of Income Tax E-Filing Forms

How to File ITR?

There are two main ways to file your ITR in India: online and offline.

1. E-Filing of Income Tax (Online):

   • Visit the Income Tax e-filing website: https://www.incometax.gov.in/iec/
     foportal/

   • Log in: Use your PAN number and password. New users can create an account.

   • Income Tax Return Filing: Go to 'e-File' and select 'File Income Tax Return'.

   • Choose your Category & ITR Form: Select your income category (individual, HUF, etc.) and the appropriate ITR form.

   • Enter Bank Details: Provide your bank account information.

   • Preview & Edit: Review the pre-filled data and make any necessary changes.

   • Verification:

     • Print a copy for record (optional).

     • E-verify your return using Aadhaar OTP or a pre-validated bank account.

2. E-Filing of Income Tax (Offline):

   • Download Utility Software: Visit the Income Tax e-filing website and download the relevant ITR form utility from the 'Downloads' section.

   • Extract & Open: Extract the downloaded ZIP file and open the appropriate form.

   • Fill & Save: Enter all your income details and save the completed form as an XML file.

   • Re-check & Calculate: Double-check your entries and calculate your tax liability.

   • Upload XML: Open the downloaded utility software and log in with your PAN details.

   • Select Options: Choose 'Income Tax Return' and select the Assessment Year and ITR Form number.

   • Filling Type: Select 'Original/Revised Return' as applicable.

   • Submission Mode: Choose 'Upload XML' and select your preferred verification method.

   • Submit ITR: Submit your completed ITR.

What are the Documents Required to File ITR?

Income Tax Return Filing (ITR) requires keeping certain documents handy to ensure a smooth process. Here are the essential ones:

• Income Proofs:

  • Form-16: TDS certificate issued by your employer, detailing salary income, deductions, and tax deducted.

  • Bank/Post Office Interest Certificates: Breakup of interest earned from various savings accounts and deposits.

  • Form-16A and Other TDS Certificates: TDS certificates for interest on FDs exceeding Rs. 40,000 (seniors: Rs. 50,000) and mutual fund dividends exceeding Rs. 5,000.

• Tax Information:

  • Annual Information Statement (AIS): Comprehensive document outlining your financial transactions for the year. (Introduced in 2021)

  • Form 26AS: Tax passbook summarizing tax deducted and deposited against your PAN (downloadable from the Income Tax portal).

• Investment & Expenditure Proofs: Deposit certificates, demat statements, investment receipts, etc., for claiming deductions and exemptions.

• Capital Gains: Documents related to investments in shares, mutual funds, debentures, and property (if applicable) to report capital gains exceeding Rs. 1 lakh.

• Foreign Assets: Details of bank accounts, property, or any other assets you hold abroad.

• Identity & Bank Details:

  • Aadhaar Number: Mandatory to include your Aadhaar number in your ITR.

  • Bank Account Details: Account number, bank name, type, and IFSC code for all your bank accounts (including closed ones).

Who Should File Income Tax Returns?

You should file Income Tax Returns in India if you fall under any of these categories:

• Income exceeds exemption limit:

  • Under 60 years old: Income above Rs. 2.5 lakh

  • Senior citizens (60-79 years old): Income above Rs. 3 lakh

  • Super senior citizens (80+ years old): Income above Rs. 5 lakh (This considers your total income before deductions and exemptions)

• Registered companies: All companies that generate income, regardless of profit.

• Seeking tax refund: Wanting to claim a refund on excess tax deducted or paid.

• Foreign assets/interests: Having assets or financial interests outside India.

• Foreign companies with treaty benefits: Enjoying tax benefits on transactions in India.

• NRIs with high Indian income: Non-resident Indians earning more than Rs. 2.5 lakh in India during a financial year.

How to Check ITR Status Online?

After your income tax return e filing, you might want to track its progress. Here's how to easily check your ITR status online:

1. Without Logging In:

   • Visit the Income Tax e-filing website.

   • Click on the "ITR Status" tab.

   • Enter your PAN number, ITR acknowledgement number, and the captcha code.

   • Click "Submit" to view your ITR filing status.

2. With Login Credentials:

   • Login to the Income Tax e-filing website.

   • Go to "e-File" and select "Income Tax Returns".

   • Choose "View Filed Returns" from the dropdown menu.

   • Select the assessment year for the return you want to track.

   • Your ITR filing status (verified or processed) will be displayed.

How to Download an Income Tax Return?

Here's how to download your ITR-V after filing your Income Tax Return electronically:

• Login: Visit the Income Tax Department's e-filing website https://www.incometax.gov.in/iec/foportal/.

• Access Returns: Click on "View Returns/ Forms".

• Select ITRs: Choose the option "Income Tax Returns" to see a list of your filed returns.

• Download ITR-V: Locate the year for which you want to download the acknowledgement and click on the acknowledgement number.

• Download Confirmation: Select "ITR-V Acknowledgment" to begin the download.

• Opening the Downloaded File: You'll need a password to open the downloaded ITR-V. This password is a combination of your PAN in lowercase letters and your date of birth in DDMMYYYY format.

Example:

• PAN: XXXXXXXXXX 

• Date of Birth: 31/12/1980

Password: asijp2345p31121980

Important Notes:

• You need to print, sign, and mail the ITR-V to CPC Bangalore within 120 days of e-filing for verification.

• Alternatively, you can electronically verify your return using Aadhaar OTP, net banking, or ATM services (e-verification).

What are the Benefits of Filing an Income Tax Return?

Filing your Income Tax Return (ITR) offers several advantages beyond just complying with the law. Here are some key benefits:

• Claim Tax Refunds: If you've paid more tax than you owe throughout the year (due to TDS deductions), filing an ITR lets you claim a refund from the government.

• Income and Address Proof: Your ITR acts as a valid document for proof of income and address. This can be helpful when applying for loans, visas, or other purposes requiring such documentation.

• Carry Forward Losses (Business): If you run a business and experience losses in a particular year, filing an ITR allows you to carry those losses forward and offset them against your income in future years, reducing your tax liability.

• Loan Approvals: Banks and financial institutions often consider your ITR when evaluating loan applications. Filing your return demonstrates financial transparency and can improve your chances of loan approval.

• Government Tenders: Participation in government tenders may require the submission of ITRs as proof of financial standing.

• Insurance Applications: Certain insurance policies, especially term insurance, might require ITRs for verification of income.

• Startup Funding: When seeking funding for your startup venture, investors may ask for your ITRs to assess your financial background.

• Avoids Penalties: Not filing your ITR when mandatory can lead to penalties from the Income Tax Department.

• Fulfills Civic Duty: Paying taxes helps fund government initiatives and contributes to the nation's development. Filing your ITR ensures you're fulfilling your civic duty.

Due Dates for Filing ITR

Below are the due dates for ITR filing:

Penalty for Late Filing of ITR

There are penalties for late filing of Income Tax Returns (ITR) in India. The penalty amount depends on your taxable income for the financial year:

Is it Compulsory to File an Income Tax Return?

Filing ITR in India is mandatory if your income exceeds the exemption limit or TDS/TCS is high. It's also recommended for carrying forward losses or claiming tax benefits. Failing to file your returns on time can result in late filing fees and may negatively impact your chances of obtaining a loan or a visa for travel purposes.

Conclusion

Timely and accurate income tax filing benefits both the government and taxpayers. It allows the government to plan and allocate resources effectively, while taxpayers can potentially receive tax refunds or claim deductions that lower their tax burden.