Income Tax Return Filing

Income Tax Filing made Easy & Affordable

Overview of Income Tax Return:

Income Tax Return (ITR) is a form which a person is supposed to submit to the Income Tax Department of India. It contains information about the person’s income and the taxes to be paid on it during the year. Information filed in ITR should pertain to a particular financial year, i.e. starting on 1st April and ending on 31st March of the next year.

Income can be of various forms such as :

a) Income from salary

b) Profits and gains from business and profession

c) Income from house property

d) Income from capital gains

e) Income from other sources such as dividend, interest on deposits, royalty income, winning on lottery, etc.

The Income Tax Department has prescribed 7 types of ITR forms - ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, ITR-7 and applicability of the form will depend on the nature and amount of income and the type of taxpayer.

Benefits of Income Tax Filing:

Past decades have observed low Income Tax filing Compliance in India, during recent years, Govt of India took stringent measures in enforcing the Income Tax Law by linking various benefits for prompt tax filers. Advantages of tax filing including but not limited to

1) Easy Loan Approval:

Filing the ITR will help individuals, when they have to apply for a loan such as Car, House Loan etc. All major banks can ask for a copy of tax returns as a proof of income statement. This is a mandatory document for the loan approval.

2) Tax Refund:

There can be instances when tax has been deducted (TDS) from your income even when your total taxable income is less than the basic exemption limit and you have nil tax liability for that year. In such a case, you will have to claim TDS refund for which you will have to file an Income Tax Return mandatorily.

3) Income & Address Proof:

Income Tax Return can be used as proof of your Income and address.

4) Quick Foreign Visa Processing:

Most embassies require you to furnish copies of your tax returns for the past couple of years at the time of the visa application. These are amongst mandatorily required documents and hence it is always advisable to timely file your ITR. 

5) Carry Forward Your Losses:

If you file the return within due date, you will be able to carry forward losses to subsequent years, which can be used to set off against the income of subsequent years. This means you can deduct certain losses from the relevant income which will help you reduce your tax liability of the future income. This is not possible without filing of the income tax return. 

6) Avoid Penalty:

If you are required to file your tax returns according to the income tax act, but didn’t, then the tax officer deserves the right to impose a penalty of up to Rs.5,000.

Income Tax Return forms:

a) ITR-1 (also called as Sahaj):

To be filed by resident individuals having total income upto Rs.50,00,000/- from following sources :

 i) Salary

 ii) One House Property

 iii) Other sources excluding winning from lotteries and income from horse races Agricultural income upto Rs.5,000/-

b) ITR-2:

To be filed by Individuals and HUFs who are not eligible to file form ITR-1 and don’t have income from profits and gains from business or profession.

c) ITR-3:

To be filed by Individuals and HUFs having income from profits and gains from business or profession.

d) ITR-4 (also called as Sugam):

To be filed by resident individuals, HUFs and firms (other than LLP) who are residents having total income upto Rs. 50,00,000 and having income from business or profession computed under section 44AD, 44ADA or 44AE etc.