Income Tax Return Filing
ITR stands for "Income Tax Return". It is a document that is filed with the tax authorities. It contains your earnings, expenditures, and other tax details.
ITRs simplify you to determine your tax liability. It also helps in claiming refunds if you have paid excess tax.
The form depends on your income, assets, or international earnings. There are multiple types of ITR forms. It is very important to know which one to file.
Why should I file an ITR?
In India, it is mandatory for individuals to file ITR if:
- The gross income of the individual is more than 2.5lakh for individuals below 60 years
- The gross income of the individual is more than 3.0lakh for individuals above 60 but below 80 years
- The gross income of the individual is more than 5.0lakh for individuals above 80 years
- You have multiple sources of income
- You want to claim an IT return from the department
- You have earned from or invested in foreign assets during the FY
- You wish to apply for a visa or loan
- The taxpayer is a company or firm, irrespective of profit or loss
What are ITR forms & its types
It is a form used by taxpayers to file information about their income earned. There are different ITR forms for different types of taxpayers:
- Total Income
- Taxpayer Category
- Income Source
There are 7 types of tax return forms.
They are available from ITR-1 to ITR-7.
- ITR Form- 1: This return form is for a resident individual whose total income is < 50 lakh from the following:
- Income from salary or pension
- Income from One House Property or,
- Income from other sources
- Agricultural income up to Rs. 5000
- ITR Form- 2: This is for the use of an individual or a Hindu Undivided Family whose total income includes:
- Income from salary or pension, or
- Income from house property, or
- Income from other sources
Total income from the above should be more than Rs 50 lakhs if:
- You are an Individual Director in a company
- You had any investments in unlisted equity shares at any time during the financial year.
- Being a resident not ordinarily resident(RNOR) and non-resident
- Income from Capital Gains, or
- Foreign Assets/ Foreign Income
- Agricultural income of more than Rs. 5000
- ITR Form- 3: Used by an individual or HUF, having income from a proprietary business. People having income from the following sources are eligible to file ITR 3:
- Carrying on a business or profession
- If you are an Individual Director in a company
- If you have had investments in unlisted equity shares at any time during the financial year.
- The return may include income from house property, salary, pension, or income from other sources
- Income of a person as a partner in the firm
- ITR Form- 4: Applicable to individuals and HUFs, partnership firms which are residents having income from a business or profession. It also includes those who have opted for Presumptive Business Income:
- Under section 44AD
- Under section 44DA
- Under section 44AE
However, if the turnover of the business exceeds Rs 2 crore, the taxpayer will have to file ITR 3.
- ITR Form- 5: It is for firms, LLPs, AOPs, BOIs, AJP, Estate of deceased, Estate of insolvent, Business trust, and investment fund.
- ITR Form- 6: It is for companies not claiming exemption under section 11.
- ITR Form- 7: For persons or companies required to furnish returns under sections:
- Section 139(4A)
- Section 139(4B)
- Section 139(4D)
- Section 139(4C)
- Section 139(4E)
- Section 139(4F)
How to file an ITR, and what are the consequences of missing the deadline?
The relevant form must be filled out depending on the income type, amount, and taxpayer category. Few things to keep in mind:
- Download and check Form 26AS. Rectify any errors if present.
- Calculate total income for the financial year
- Calculate tax liability after applying tax rates.
- Prepare documents like Form 16, interest certificate, capital gains, and aadhar card.
Especia provides ITR services contact For expert help.
A few prominent consequences of not being able to file ITR within the due date are:
- If 26AS indicates that you had unpaid tax liabilities, then Income Escaping Assessment might be applied. Might be asked to file a return through Section 148 and adhere to further orders by AO.
- If you were entitled to a refund, then missing the due date for ITR means that you cannot take your refund.
- If you had any kind of capital losses or business losses, you could not carry forward the losses.
- Higher TDS/TCS provisions might be applied.
- Late fees will be applied for late filing or not filing.
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