Income Tax Return or ITR – Concept, Types, Filing, Eligibility, Documents, Process & more
Are you going to file your ITR for the first time? Are you wondering what is ITR? In simple words, ITR or Income Tax return is nothing but a set of forms that are used for declaring your gross taxable income.
ITR or Income Tax return forms are supplied by the government and tax department which you need to fill to declare your income. Then the tax department levies a tax on the same.
So, here in this article, you will get to know about the different ITR forms, eligibility criteria to file ITR. The article will also cover various benefits of the ITR filing.
In this article, you will find the process for downloading the ITR forms, checking your ITR status, and many other aspects of the same.
About Income Tax Return
Income Tax Return which is shortly known as ITR is constituted of different forms required for filing tax and declaring income.
The assessee declares his or her income in this form and then submit it for taxation.
Basically, in these forms, the tax liability is calculated of the assessee based on his or her income.
As per the rules of the Income Tax department, you have to file ITR every year if you are eligible for the same.
Different ITR depend upon the source of income, you have to choose the one meant for your income.
In the next section of the article, we will be discussing the different ITR forms and the purpose of using them.
You have to mention all the income that you generate from any source in the ITR you file. There is also a penalty for not paying taxes on time.
There is a deadline every year for paying the taxes. If you miss the deadline, you might have to pay a penalty for the same.
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What are the different types of ITR?
As mentioned above, you require different ITR forms for filing different income.
First is ITR Form 1, the basic ITR form meant for the salaried individuals. An individual assessee who draws a salary and is eligible for paying tax needs to file ITR form 1.
Second is ITR Form 2 for the HUFs and also for individuals. In this form, you have to file for the income generated from any source other than business and profession.
Next is ITR 3 for the HUFs only where they need to declare their income from business or any profession.
Fourth is ITR 4 which is for declaring income from house property. Both individuals and HUFs can use this form.
Then comes ITR 4S which is also known as SUGAM Form or scheme meant for the HUFs. It is the special taxation scheme for Hindu Undivided Families.
It is mentioned under section 44AD/ AE of the IT Act.
Then there is ITR form 5 for the artificial judiciary entities, Limited liability partnership firms, business firms, AOPs, and also local authorities.
ITR 6 is for companies that do not claim any exemptions under section 11 of the IT Act.
Finally, there is ITR 7 for the individual assessee who falls under section 139 (4D), 139 (4C), and 139 (4B).
So, these eight types of ITR forms are available as of now with the IT department. You need to check which one is suitable for your income source.
Supposedly, your main earning is from salary but you earn from renting your property. Then you have to file your income under both ITR 1 and ITR 4.
In ITR 1, you will provide all the details of your salary income. Similarly, in ITR 4, there will be mention of income from house property.
Why it is so important to file ITR in India?
If you are wondering why it is so important to file Tax Return then go through the points mentioned below –
- Firstly, paying your taxes duly shows your responsibility towards the economy. The tax you pay is one of the major sources of revenue for the government to run the country.
- Secondly, if you are paying taxes within the due date, you do not have to pay penalties.
- It helps you get good offers on loans that you are availing of. Many financial lenders ask for IT returns before they approve your loan application.
- Not only loan, but IT return is also mandatory for applying for Visa for many countries as well.
- If you have incurred losses and want to adjust the same in the upcoming year, then filing your ITR timely is necessary.
When are you eligible for ITR Filing?
There are different criteria for being eligible for Tax Return filing as an individual. It is mainly based on your age and income and the criteria are –
- Individuals below 60 years of age earning 2.5 lakhs in a year are liable to file ITR.
- Then, if the age is between 60 years to 80 years, the income range goes up to Rs.3 lakh a year. If you earn 3 lakh or more then you are liable to file ITR.
- Similarly, if your age is above 80 years and your income is above 5 lakhs a year, then only you have to file ITR.
- In the case of companies, they are eligible and liable to file ITR in any case. There are no profit margin criteria for filing ITR for them.
- Even NRIs are eligible and liable if they earn in excess of 2.5 lakhs in India.
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What are the documents required to Income Tax Filing?
For filing ITR, you would need to provide –
- PAN Card
- If you have investments in any tax-saving scheme, then documents supporting the same
- Bank account statements
- Form 16 A/ 16B/ 16C
- TDS certificate if TDS is deducted
- Certificates of interests received or paid
- Form 26AS
Each of the documents has its importance. You need to arrange them all before you start filing your ITR.
Downloading process of ITR Form
To avoid any last-minute stress or rush, you must download your ITR beforehand. After e-filing your ITR, the tax department generates a verification form for the legitimacy of e-filing.
However, this is only applicable when you do not have a DSC or digital signature certificate.
So, once the verification form is generated by the department, you can download it by following these below-mentioned steps –
- Firstly, you have to login to the website of the income tax department
- There you will find an option/dropdown menu – ‘View Returns/Forms’. Click on that.
- Now select income tax return
- Then you have to click on the acknowledgment number for downloading the ITR V.
- The download will begin once you select the ‘ITR- V Acknowledgement’.
- Once it is downloaded, you can open the same. However, it will require a password and the password is your PAN number (small caps) + your birth date.
For instance, your PAN number is ABCDE1252F and your birth date is 01/01/1990
So the password would be – abcde1252f01011990
Once the downloading is done, you have to print it and sign it duly. You need to send this document for verification at CPC, Bangalore within 120 days of e-filing.
You can also e-verify by using AADHAAR OTP/ net banking or ATM.
How to file ITR and check your ITR status online?
The process of filing your ITR is very easy and here are the steps –
- Register or login to http://www.incometaxindiaefiling.gov.in/
- Select the assessment year
- Select the right ITR form
- You will be redirected to another page. Here you have to fill the form. Read all the guidelines before filling the form.
- Enter all the details asked in the form
- Check twice and click on Preview and submit
- Once submitted, you will have to verify the same using your AADHAAR number. You will receive an OTP. You can also send the verification form to CPC, Bangalore for physical verification.
- Once successfully verified and the ITR is processed, you will receive a confirmation on your email and also on your registered mobile number.
Process for checking Income Tax Return Status Online –
Firstly, if you do not have a login credential then you have to –
- Click on the ITR status tab which is placed on the extreme left of the website given above.
- You will be redirected to another page. Here you will have to enter the PAN number, ITR acknowledgment number, and also the captcha code.
- Once all the details are entered successfully, your ITR status will be on your screen.
If you have login credentials then you can –
- Login to the website of e-filing tax of the tax department India.
- Click on the ‘ View returns/forms’ option
- You will find a dropdown menu. Select the assessment year and ITR from that menu.
- You will be able to see the status of your ITR – whether it is verified or not or already processed on the screen.
Is there anything new in the ITR forms?
In the new ITR forms which came out in 2020, they have relief measures for the covid-19 crisis.
The Central Board of Direct Taxes recently announced new tax return forms. The relief measures are –
- The tax net is broadened. It now includes individuals, HUFs, and also partnership firms. The criteria for being included are depositing 1 crore in the bank or more, paying a power utility bill worth more than one lakh, and incurring travel expenses (personal) over Rs.2 lakhs.
- In the new forms, the amendment which was earlier done for prohibiting joint house owners from tax filing is withdrawn.
- To indicate tax rebate on any amount spent or invested by an assessee, there is a new schedule which is Schedule DI in the new ITR forms.
Advantages of filing Income Tax Return
The advantages of filing Income Tax Return are as follows –
- Firstly, you can do it easily and promptly using the e-filing website of the tax department.
- As there is no paper or the physical process involved in e-filing, you save a lot of time.
- It is more accurate to keep everything online and safe with the tax department.
- It is way more convenient in today’s time.
- Confidentiality is another big advantage. As you may not require to get a CA on board for filing your taxes. You can do it on your own.
- One can easily assess the past returns and your ITR files for records from the website.
- You can e-verify your ITR return submission which saves money and time.
- There is the facility of electronic or net banking which makes your ITR filing easier.
Conclusion – Income Tax Returns or ITR
Income Tax Return filing is as easy as you do Netflix. However, it is more important than the latter.
Your tax is revenue for the government and thus you must be responsible enough to pay it duly. It not only help the government but also your benefit is involved.
You get a lot of advantages for being a responsible taxpayer of the country. The process of ITR filing is easy as you must have read above.
To avoid any hassle, you just need to choose the right ITR for your income according to your income source. Then, fill in all the details correctly and submit it. Rest is taken care of automatically and once the verification is done, you are good to go.
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Income Tax Returns FAQs
Ques – Are there any precautions to be taken while filing ITR?
Answer – Yes, never file your ITR in a hurry. Always make sure you have enough time in hand. You must file the return before the last date of filing ITR which is generally July 31st of every year. However due to the covid-19 crisis, this year, the dates have been revised many times.
Another aspect you must be wary about is getting the calculations right. Always check twice, thrice before entering any income information.
If required calculate it two/three times. If wrong details are entered, your tax deduction will also be wrong and then you may have to pay penalties without any reasons or face hassle.
Ques – What is form 26AS?
Answer – Form 26AS showcase any tax deduction at source. For example, if your employer deducts 7.5% TDS (rate has been decreased from 10% to 7.5% due to covid-19), then it would be reflected in Form 26AS.
Ques – What is the process of claiming a tax refund when paid in excess?
Answer – If you have proof of paying tax in excess then you can claim the same within the deadline given by the tax department.
Generally, the stipulated time given by the department is with the assessment year for which you have been claiming the tax refund.
Ques – What is form 16?
Answer – This form is the TDS certificate issued when TDS is deducted by the employer.
Ques – What is Form 16A, 16B, and 16C?
Answer – Form 16A is for TDS deducted from payments other than salaries. For instance, if the bank has deducted your TDS on the interest income from recurring deposits or FDs.
Form 16B is for TDS deduction on a house property sale. If you have sold out a property and the buyer has deducted TDS, then you need to use this form.
Similarly, form 16C is applicable when you get rent from your tenant and he or she deducts TDS.
Ques – What happens if you don’t file ITR in India?
Answer – Not filing the ITR can cause very serious troubles to an individual. The tax department can very rightfully levy penalty to that very individual.
Ques – Why is my IT return still processing?
Answer – The ITR might take longer than usual to process in some cases; the reason might be an incomplete file return or any mistakes in the tax returns.
Ques – Why IT returns refund not yet received?
Answer – In order for one to apply for their ITR refund, at most vigilantly is very important from the individual’s part. Make sure to put correct bank account details, the ITR form must be correctly filled.
Ques – Can I file ITR for last 3 years now?
Answer – No, one is not allowed to file an ITR for years more than 1 year. One can only file the delayed IT returns anytime on or prior to 1 year from the end of the pertinent assessment year.
Ques – What to do if you never received tax refund?
Answer – If you haven’t received your tax refund you can very rightfully file a service request on the official e-filling portal. The following will alert the officials and raise an issue on your behalf.
Ques – What is the penalty for late ITR filing?
Answer – There is a standardized penalty rate/fee associated with late filing of the income tax returns. A maximum penalty of Rs 10000 can be levied on the delay of ITR filling.
Ques – How can I download the last 3 years ITR?
Answer – In order for individuals to download the ITR form they need to login to the website of income tax department proceeding which choose the option of – ‘view returns/forms’. The downloading will begin once you choose the ‘ITR-V Acknowledgement’
Ques – What is the last date to E Verify ITR?
Answer – The last date of verification of e-returns is within the first 120 days after the date of e-filing the returns. Every individual must e verify their ITR before this.
Ques – What is EVC ITR?
Answer – The EVC stands for – Electronic Verification Code, which is a 10 digit alphabetic code sent to the individual’s registered mobile number.
Ques – Is it necessary to file ITR if income is not taxable?
Answer – It is not a mandatory condition to file the IT if the income isn’t over Rs 2.5 lakhs, however it is recommended to file it even though the income does not come under the stared taxable income.
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