Income Tax Return Filing In India

Income tax return filing in India is a mandatory process for individuals and entities earning above a certain threshold. It involves declaring your income, claiming deductions, and calculating the tax liability for a financial year, ensuring that there is a compliance with Indian tax laws.

What Is ITR Filing?

ITR Filing, or Income Tax Return Filing, is the process of submitting your income details and tax payments to the Income Tax Department of India. It is a critical annual activity for taxpayers to report their earnings, deductions, and tax liabilities.

For instance, a salaried individual earning ₹10 lakh annually will report this income in their ITR, along with any deductions such as ₹1.5 lakh under Section 80C for investments. If their total taxable income after these deductions comes to ₹8.5 lakh, and their tax liability is ₹70,000 after considering the tax slabs, and they have already paid ₹60,000 as TDS, they will need to pay the remaining ₹10,000 when filing their ITR. This ensures they meet their tax obligations and can claim any potential refunds for overpaid taxes.

Types Of ITR Filing

Types of ITR filing include ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7. Each type caters to different categories of taxpayers, ensuring appropriate reporting and compliance with tax regulations based on income sources and amounts.

1. ITR-1: This form is for resident individuals who have an income of up to ₹50 lakh from salary or pension, one house property, and other sources like interest. It is the most commonly used form for salaried individuals without significant additional income or business profits.
2. ITR-2: This form is used by individuals and Hindu Undivided Families (HUFs) who have income from salary, multiple house properties, capital gains, and other sources, but not from business or profession. It is suitable for those with more complex income structures, including gains from investments.
3. ITR-3: This form is designed for individuals and HUFs who have income from a proprietary business or profession. It caters to business owners and professionals like doctors, lawyers, and consultants who need to report income from their professional activities along with other sources.
4. ITR-4: This form is for individuals, HUFs, and firms (excluding LLPs) who have opted for the presumptive income scheme under sections 44AD, 44ADA, or 44AE of the Income Tax Act. This scheme allows taxpayers to declare income at a prescribed rate, simplifying tax calculations for small businesses and professionals.
5. ITR-5: This form is applicable to partnership firms, Limited Liability Partnerships (LLPs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), and other entities except those required to file ITR-7. It covers various forms of business and organizational income, excluding companies and trusts.
6. ITR-6: Companies that do not claim exemption under section 11 of the Income Tax Act, which relates to income from property held for charitable or religious purposes, use this form. It is the standard form for reporting corporate income, deductions, and tax liabilities.
7. ITR-7: This form is intended for entities, including companies, required to submit returns under sections 139(4A), 139(4B), 139(4C), or 139(4D). These sections encompass entities like charitable and religious trusts, political parties, and research associations, ensuring they report their income and claim relevant exemptions.

ITR Filing Eligibility

Eligibility for filing an Income Tax Return (ITR) in India varies based on factors such as income level, age, and sources of income. Both individuals and entities must assess their income against the prescribed thresholds to determine their filing requirements.

Documents Required For ITR Filing

Certain documents are essential to file an Income Tax Return (ITR) in India for accurately reporting income and claiming deductions. These documents ensure proper calculation of tax liability, facilitate compliance with tax regulations, and support the verification of financial details by the Income Tax Department. They are as follows:

• PAN Card: Your Permanent Account Number (PAN) is a unique identifier for tax purposes and is mandatory for filing ITR. It links all your financial transactions to the tax department, ensuring accurate tracking and compliance.
• Aadhaar Card: The Aadhaar number is required to link with your PAN for identity verification purposes. This linkage helps in authenticating your identity and streamlining the tax filing process.
• Form 16: Issued by employers, Form 16 contains details of the salary paid and TDS deducted during the financial year. It is essential for salaried individuals to summarize their earnings and taxes paid.
• Form 16A: This form is for TDS on income other than salary, such as interest, dividends, or rent. It provides details of tax deducted at source on these incomes and is necessary for accurate tax reporting.
• Bank Statements: Bank statements provide details of all your bank accounts, showing interest earned and other transactions throughout the year. These statements help in reporting accurate income and identifying deductions.
• Investment Proofs: Documents showing investments made in PPF, NSC, ELSS, and other tax-saving instruments. These proofs are crucial for claiming deductions under various sections of the Income Tax Act.
• Interest Certificates: Issued by banks and post offices, interest certificates detail the interest earned on savings accounts, fixed deposits, and other investments. These certificates help in accurately reporting income from interest.
• Rent Receipts: Proof of rent paid is required if you are claiming House Rent Allowance (HRA). Rent receipts should include details like the amount paid, the period of payment, and the landlord’s information.
• Capital Gains Statements: These statements are necessary for reporting gains from the sale of property, stocks, or mutual funds. They provide details of purchase and sale transactions, helping in the calculation of taxable capital gains.
• Home Loan Statement: This statement details the interest paid on home loans, which is eligible for tax deduction under sections 24(b) and 80EE of the Income Tax Act. It helps in reducing your taxable income.
• Insurance Premium Receipts: Receipts for life and health insurance premiums paid are required to claim deductions under Section 80C and 80D, respectively. These receipts should include policy details and premium amounts.
• Donation Receipts: Proof of donations made to eligible charitable organizations is required for claiming deductions under Section 80G. Donation receipts must include the donor’s details, the amount donated, and the organization’s PAN.
• Form 26AS: A consolidated tax statement that shows TDS, advance tax, and self-assessment tax paid during the financial year. It helps in verifying the tax credits available against your PAN and ensuring accurate tax filing.

Old Tax Regime Vs New Tax Regime

The main difference between the old and new tax regimes in India is that the old regime allows taxpayers to claim various deductions and exemptions, thereby reducing taxable income, while the new regime offers significantly lower tax rates but does not permit any deductions or exemptions.

Latest Tax Rates as Per Old and New Income Slab

Guide To Filing ITR Online

Filing an Income Tax Return (ITR) online in India is a simple process. It involves logging into the income tax e-filing portal, providing the necessary details, and submitting the return. Here is a step-by-step guide to help you e-file your ITR:

1. Register on the e-Filing Portal First, visit the Income Tax Department’s e-filing website and register using your Permanent Account Number (PAN). Your PAN will serve as your User ID. Complete the registration by providing your basic details such as name, date of birth, and contact information. Verify your account through the email or mobile number provided.

2. Login to Your Account Use your PAN, password, and captcha code to log in to your account on the e-filing portal. Ensure your account details are up to date and review any notifications or messages from the Income Tax Department to stay informed about any updates or required actions.

3. Select the Right ITR Form Choose the appropriate ITR form based on your income  sources and category. For instance, ITR-1 is for salaried individuals, while ITR-4 is for those opting for the presumptive income scheme. Each form has specific criteria, so ensure you select the form that accurately reflects your financial situation for the assessment year.

4. Fill in the Form Details Enter all necessary details in the form, including personal information, income details, deductions, and tax paid. Ensure accuracy to avoid errors. Use your Form 16, bank statements, and investment proofs to accurately report your income and deductions, ensuring that all figures are correct and complete.

5. Validate Your Information Use the ‘Validate’ button to check for any errors in the form. Correct any mistakes highlighted by the validation process to ensure your form is error-free. This step is crucial to avoid discrepancies that could lead to issues with your filing.

6. Calculate Your Tax Once all details are entered, the portal will automatically calculate your tax liability. Review the calculations carefully to ensure they match your records and financial statements. This helps you confirm that the amount of tax calculated is correct and reflects your actual tax liability.

7. Submit and e-Verify Your Return After reviewing and validating all details, submit your ITR. Choose an e-verification method such as Aadhaar OTP, net banking, or Electronic Verification Code (EVC) to complete the filing process. E-verification is essential to complete the ITR filing process and make it legally valid.

8. Keep an Acknowledgment Copy Once your ITR is successfully filed and verified, download the acknowledgment receipt (ITR-V). Keep a printed copy of the ITR-V for your records and future reference. This acknowledgment serves as proof of your ITR submission and can be useful for various financial transactions and legal purposes.

Due Date For ITR Filing

The due date for filing Income Tax Returns (ITR) for the financial year 2023-24 (assessment year 2024-25) varies based on the category of the taxpayer and their specific requirements. Income Tax Filing Due Dates for FY 2023-24 (AY 2024-25) are as follows:

Income Tax Return Filing In India – Quick Summary

• Filing an Income Tax Return (ITR) in India involves declaring your income and calculating the tax liability for a financial year. It ensures compliance with tax regulations and enables accurate reporting of earnings.
• ITR filing is the process of submitting your income details and tax payments to the Income Tax Department. This annual activity is crucial for maintaining proper financial records and avoiding penalties.
• There are seven types of ITR forms (ITR-1 to ITR-7), each catering to different categories of taxpayers. Each form is designed to address specific income sources and taxpayer classifications.
• Eligibility depends on factors such as income level, age, and sources of income. Different taxpayer categories, like individuals, businesses, and NRIs, have varied filing requirements.
• Necessary documents include PAN card, Aadhaar card, Form 16, bank statements, and investment proofs. These documents help accurately report income and claim deductions.
• The old regime allows deductions and exemptions, whereas the new regime offers lower tax rates without deductions. Taxpayers can choose between regimes based on their financial situation and benefits.
• Filing an Income Tax Return (ITR) online involves logging into the income tax e-filing portal, providing necessary details, and submitting the return. The process includes registering on the portal, logging in with your PAN, selecting the appropriate ITR form, filling in income details, validating the information, calculating tax liability, submitting, e-verifying, and keeping an acknowledgment copy. This streamlined method ensures accurate and timely filing of tax returns.
• The due date for filing Income Tax Returns (ITR) for the financial year 2023-24 (assessment year 2024-25) varies based on the category of the taxpayer. For individuals, HUFs, AOPs, and BOIs not requiring an audit, the due date is 31st July 2024. Businesses requiring audit must file by 31st October 2024, and those needing transfer pricing reports by 30th November 2024. Revised and belated returns are due by 31st December 2024, while updated returns can be filed until 31st March 2027.
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ITR Filing 2024 – FAQs