Income Tax Return Filing in India

Income tax return filing is an essential process for taxpayers in India. Whether you are an individual or a business, understanding how to file taxes online is crucial to ensure compliance with the legal requirements under the Income Tax Act of 1961.

In this comprehensive guide, we will cover the concept of income tax returns, who should file them and the different types of returns. Additionally, we will cover the process of filing ITRs in detail.

Income Tax Return (ITR) Meaning

An income tax return (ITR) is a form that taxpayers must file with the Income Tax Department (ITD) after the end of each financial year. It is an extensive document containing details of the taxpayer’s income, expenses and taxes paid during a financial year.

Once the ITR is filed, it is thoroughly scrutinised and assessed by the Income Tax Department to ensure accuracy and authenticity. In the case of any discrepancies, the ITD will issue a notice to the taxpayer, urging them to provide evidence to support their claim or rectify the return and file it once again.

Who Should File an Income Tax Return?

Income tax return filing is mandatory for individuals and entities if they meet certain criteria. Here is a quick overview of who should file an ITR.

• Individuals and Hindu Undivided Families (HUFs) with an annual taxable income above the basic exemption limit.
• Individuals and Hindu Undivided Families (HUFs) with foreign income or assets.
• Political parties with annual taxable income above the basic exemption limit under section 139 (4B) of the Income Tax Act of 1961.
• Indian residents claiming relief under the double taxation avoidance agreement (DTAA) as per sections 90 and 90A of the Income Tax Act of 1961.
• Indian residents with the authority to sign on over accounts situated outside the geographical borders of India.
• Domestic and foreign companies that generate income within India irrespective of profit or loss.
• Taxpayers required to furnish an audit report under the following sections of the Income Tax Act of 1961:

1. 10(23C)(via), 10(23C)(vi), 10(23C)(iv), 10(23C)(v)
2. 10A
3. 12A(1)(b)
4. 44AB
5. 80LA, 80JJAA, 80IB, 80IA, 80IC, 80ID,
6. 92E
7. 115JB

• Association of Persons (AOP), Body of Individuals (BOI), local authorities, artificial juridical persons and cooperative societies that do not come under the terms of section 44AB of the Income Tax Act of 1961.
• Individuals and entities seeking tax refunds or carrying forward losses.

What are the Different Types of Income Tax Returns?

The Income Tax Department provides different types of income tax returns, each catering to specific taxpayer categories. Here is a quick overview of each of the ITR types and who should file them.

• ITR-1

Resident individuals with a total annual income of up to ₹50 lakh from salary, one house property and other sources.

• ITR-2

Individuals and HUFs with income from capital gains or with total annual income of more than ₹50 lakh from salary, more than one house property and other sources. Individuals and HUFs with foreign income or assets must also use ITR 2 to complete their income tax return filing.

• ITR-3

Individuals and HUFs with income from a profession or business.

• ITR-4

Resident individuals, HUFs and partnership firms with total annual income of up to ₹50 lakh and with presumptive income from a business or profession under sections 44AD, 44ADA, or 44AE of the Income Tax Act of 1961.

• ITR-5

All other entities other than individuals, HUFs, companies and persons filing ITR-7.

• ITR-6

All companies other than those companies claiming exemption under section 11 of the Income Tax Act of 1961.

• ITR-7

All entities that are required to file income tax returns under sections 139(4A), 139(4B), 139 (4C) and 139(4D).

How to File an Income Tax Return?

You can file your income tax return online or offline. Take a closer look at these two options here.

• Online ITR Filing

Filing your ITR online is not only convenient but also saves time and effort. To complete the income tax return filing process online, you need to log into the e-filing portal, submit the required details, pay the taxes due (if any) and perform the e-verification of your ITR.

• Offline ITR Filing

Offline ITR filing may be a bit more complex. You need to download the ITR form applicable, fill in the details, generate a JSON file and then upload that file to finish filing your tax return. In this process too, you need to verify your ITR after submitting it.

Know More About theDocuments Required for ITR Filing

Conclusion

With this, you must now be aware of what income tax return filing is and how to complete the process. Remember, filing returns is more than just a legal obligation—it also helps build credibility. Failing to file your income tax returns on time can lead to significant penalties and the inability to claim tax refunds. Therefore, as a taxpayer, you must ensure that you upload and verify your return within the stipulated due dates.

Disclaimer: This information is for general guidance only and should not be considered professional tax advice. Consult with a qualified tax professional for personalised guidance.

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