Income Tax Return (ITR) is a form where taxpayers declare their taxable income, deductions and tax payments to the Income Tax Department(IT Department). Filing Income Tax Return ensures that you get refund of any extra taxes paid or pay the remaining account in case of underpaid taxes.
ITR form ranges from ITR 1 to ITR 7. ITR 1 to ITR 4 is usually for individuals depending on various factors highlighted here while ITR 5 to ITR 7 is for companies, firms or persons who are exempted under Section 10 & Section 139.
Income Tax Return – Why is it required?
If your Indian Income is more than ₹2.5 Lakhs, filing an ITR is compulsory whether you are a resident Indian or an NRI. It is good to file ITR even if you do not meet the criteria as it helps you with various other tasks. Important places or events where Income Tax Return document is important –
- While availing a home loan it should be produced, as it reflects your income and ability to repay the loan.
- ITR receipts are necessary if you are looking for a housing loan, vehicle loan, education loan etc.
- ITR filing is important for Visa processing for higher studies or job abroad.
- Preferable to file ITR to get a credit card.
Filing Income Tax Return is a way to prove that your income is legitimate and establishes your good conduct with Income Tax Department.
When to file ITR & Delay Penalty?
Usually ITR is to be filed by 31st July of every year for Individuals, HUFs etc. While for a company, a working partner of a firm or an individual/entity whose accounts are required to be audited can file Income Tax Return by 30th September.
In Budget 2017 penalty for filing an ITR late was decided and came into action from FY 17-18. So if the ITR is filed after July 31st & before 31st December the fine is ₹5,000 and if paid between January 1st & March 31st the fine is ₹10,000. If the total income is less than ₹2,50,000 then there is no fine even if the ITR is filed till 31st March, while for income less than ₹5,00,000 the maximum fine is ₹1,000.
How to file Income Tax Return?
ITR can be filed through an agent or CA which could be easily found out on platforms like JustDial or UrbanClap.
You can also file Income Tax Returns online on the Income Tax Departments Website. Lately multiple websites have come up which makes your ITR Filing very easy and accurate –
Interesting Facts – Income Tax Return
- From 2017/18, you can only e-file ITR for 1 year.
- Exemption limit for 80+ years older is ₹5,00,000 and 60+ years older is ₹3,00,000.
Gaurav heads Growth & Marketing at Sorted AI. He is an IIT Kanpur Alumnus. He has more than 5 years of work experience in Entrepreneurship & Investment Banking where he worked with Credit Suisse & Tapp Me. He is an avid Keyboard/Percussion Player & a better discount hunter.