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Overview of ITR Filing

Overview of
ITR Filing

ITR filing refers to the process of filing income tax returns with the Income Tax Department of India. The income tax return is a document that contains details of a taxpayer's income, deductions, and taxes paid in a financial year. Filing income tax returns is mandatory for individuals, companies, and other entities that earn income above a certain threshold.

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Eligibility of ITR Filing

The eligibility criteria for filing income tax returns (ITR) in India vary depending on the source and amount of income earned by the taxpayer during a financial year. Here are the general eligibility criteria for ITR filing in India:

Companies:

All companies, irrespective of whether they have made a profit or a loss, are required to file income tax returns.

Partnership firms:

Partnership firms are required to file income tax returns if their income exceeds the basic exemption limit.

Hindu Undivided Family (HUF):

HUFs are treated as a separate entity for tax purposes, and thus they are required to file income tax returns if their income exceeds the basic exemption limit.

Non-Resident Indians (NRIs):

NRIs are required to file income tax returns in India if their income from sources in India exceeds the basic exemption limit.

It is important to note that even if a taxpayer's income does not exceed the basic exemption limit, they may still be required to file income tax returns if they have certain types of income, such as capital gains or foreign assets. Additionally, taxpayers who have paid excess tax or have received a refund must file their ITR to claim the refund. Hence, it is advisable to consult a tax professional to determine the eligibility criteria for ITR filing based on your specific financial situation.

Individuals:

All individuals, including salaried employees, freelancers, consultants, and business owners, are required to file income tax returns if their annual income exceeds the basic exemption limit. For the financial year 2022-23, the basic exemption limit for individuals below 60 years of age is Rs. 2.5 lakhs, for senior citizens above 60 years but below 80 years is Rs. 3 lakhs, and for super senior citizens above 80 years is Rs. 5 lakhs.

ITR Filing in India

Types Of ITR Filing in India

In India, there are different types of Income Tax Return (ITR) forms that taxpayers can use to file their tax returns depending on their source of income, nature of income, and other factors. Here are the different types of ITR forms available for different categories of taxpayers:

ITR-1 (SAHAJ): This form is for individuals who have income from salary or pension, one house property, and income from other sources. The total income of the taxpayer should not exceed Rs. 50 lakhs for using this form.
ITR-2: This form is for individuals and HUFs who have income from salary or pension, more than one house property, capital gains, and income from other sources. This form is also used by taxpayers who are not eligible to file ITR-1.
ITR-3: This form is for individuals and HUFs who have income from profits and gains of business or profession.
ITR-4 (SUGAM): This form is for individuals, HUFs, and partnership firms who have income from business or profession and have opted for the presumptive taxation scheme. The total income of the taxpayer should not exceed Rs. 50 lakhs for using this form.
ITR-5: This form is for partnership firms, LLPs, AOPs (Association of Persons), and BOIs (Body of Individuals).
ITR-6: This form is for companies other than companies claiming exemption under Section 11 of the Income Tax Act, 1961.
ITR-7: This form is for taxpayers who are required to file their returns under Section 139(4A), Section 139(4B), Section 139(4C), or Section 139(4D) of the Income Tax Act, 1961.

Benefit of ITR Filing

Filing income tax returns (ITR) in India has several benefits, both for individuals and businesses. Here are some of the key benefits of ITR filing:

Compliance with the law: Filing income tax returns is mandatory for all taxpayers whose income exceeds the basic exemption limit. By filing ITR, taxpayers comply with the provisions of the Income Tax Act, 1961, and avoid legal consequences such as penalties and fines.
Faster processing of refunds: Taxpayers who have paid excess tax can claim refunds by filing their ITR. Filing ITR helps in faster processing of refunds by the Income Tax Department.
Evidence of income: ITR serves as evidence of a taxpayer's income and can be used as a proof of income for various purposes such as obtaining loans, applying for visas, and other financial transactions.
Helps in credit scoring: Credit bureaus use ITR as a basis to calculate credit scores of individuals and businesses. A good credit score can help in obtaining loans and credit cards with better terms and conditions.
Avoids notice from the Income Tax Department: Filing ITR on time helps taxpayers avoid receiving a notice from the Income Tax Department. Non-filing or delay in filing ITR can result in penalties, interest charges, and even legal consequences.
Facilitates easy visa processing: Many countries require ITR as proof of financial stability and income for visa processing. Hence, filing ITR regularly can make visa processing hassle-free.

Document required for ITR Filing

Taxpayers in India need to provide certain documents and information while filing their Income Tax Returns (ITR). Here are some of the key documents required for ITR filing:
PAN Card: Permanent Account Number (PAN) is a unique 10-digit alphanumeric number issued by the Income Tax Department. PAN is mandatory for all taxpayers for filing their ITR.
Form 16: Form 16 is a certificate issued by the employer that contains details of the salary paid to the employee during the financial year and the TDS deducted from the salary.
Form 26AS: Form 26AS is a tax credit statement that contains details of tax deducted at source (TDS), tax collected at source (TCS), and advance tax paid. Taxpayers can download Form 26AS from the income tax e-filing portal.
Bank statements: Taxpayers need to provide details of their bank accounts, including account number, IFSC code, and transaction details.
Investment documents: Taxpayers need to provide details of their investments such as life insurance premium, provident fund contributions, National Pension System (NPS) contributions, Equity-Linked Saving Scheme (ELSS) investments, and others.
Property details: If taxpayers own a property, they need to provide details such as property address, area, and other relevant information.
Business documents: For taxpayers who have a business or profession, they need to provide details such as profit and loss account, balance sheet, and audit report.
Aadhaar Card: Aadhaar card is a unique identification number issued by the Indian government. It is required for e-filing of ITR.
Other documents: Taxpayers may also need to provide other documents such as receipts of donations made, medical bills, rent receipts, and others, depending on their sources of income and deductions.
It is important to note that the documents required for ITR filing may vary based on the source of income, nature of income, and other factors. Hence, taxpayers must check the latest guidelines provided by the Income Tax Department while filing their ITR.
Procedure of ITR Filing The procedure for filing Income Tax Returns (ITR) in India can be done either online or offline. Here is a step-by-step guide to file ITR online:
• Register on the Income Tax Department e-filing portal by providing the required details such as name, PAN, date of birth, and contact details.
• Download the relevant ITR form for the assessment year (AY) from the e-filing portal based on the nature and source of income.
• Fill in the details of your income, deductions, and tax payments in the ITR form. Ensure that all the details are accurate and up-to-date.
• Verify the pre-filled details such as name, PAN, address, and tax deducted by your employer (Form 16/16A) and other entities (Form 26AS).
• Calculate the tax payable or refund due based on the details provided and pay any remaining tax due, if applicable.
• Generate and verify the electronic verification code (EVC) or digital signature certificate (DSC) to complete the filing process. EVC can be generated through Aadhaar OTP, net banking, or bank ATM.
• Submit the ITR form to the Income Tax Department by clicking on the "Submit" button.
• After submitting the ITR, you will receive an acknowledgement receipt (ITR-V) via email, which contains a unique 15-digit acknowledgement number. Download and print the ITR-V, sign it in blue ink, and send it to the Income Tax Department within 120 days of filing the ITR.
Alternatively, taxpayers can also file ITR offline by filling the ITR form manually and submitting it physically to the Income Tax Department's office.

PSR Compliance Assistance

There is no denying that securing Income Tax Filing is an intricate affair that seeks adequate skill and a professional approach. Many mistakes occur in the documentation part that inherently leads to the cancellation of the Application. With PSR Compliance support at your disposal, you do not need to encounter such hassles. All you need to facilitate requested credentials and information to our expert, and you are good to go. Our experts will take care of all the formalities and ensure seamless delivery of Return in a prompt time frame.

Frequently Asked Questions(FAQ's)

  • What is ITR filing?
    ITR (Income Tax Return) filing is the process of submitting your income tax returns to the Income Tax Department of India. All people are required to file their income tax returns each year, including corporations and those who are paid workers and independent contractors.
  • Who is required to file an ITR?
    Everyone, including corporations and salaried employees, are required to file their income tax returns annually if their aggregate income exceeds the government's exemption threshold.
  • What documents are required for ITR filing?
    The documents required for ITR filing include PAN (Permanent Account Number) card, Form 16 (for salaried employees), bank statements, TDS (Tax Deducted at Source) certificates, and details of income from other sources such as rental income, interest income, and capital gains.
  • What is the due date for ITR filing?
    The due date for ITR filing varies depending on the type of taxpayer and the type of income. For individuals and businesses, the due date is usually July 31st of the assessment year.
  • How can I file my ITR?
    You can submit your ITR in a number of methods, including online using the Income Tax Department's e-filing platform, offline by mailing a hard copy to the nearby Income Tax office, and through a tax expert or chartered accountant.
  • What are the consequences of not filing an ITR?
    Not filing an ITR can result in penalties, fines, and legal action by the Income Tax Department. Additionally, failure to file an ITR can affect your ability to obtain loans or credit cards and can also result in difficulties obtaining visas for international travel.
  • Can I file a revised ITR?
    Yes, you can file a revised ITR if you make a mistake or need to make changes to the original ITR filed. However, the revised ITR must be filed within a certain timeframe and is subject to scrutiny by the Income Tax Department.

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