Those of us who are taxpayers file Income Tax Returns, or ITRs, to declare our tax responsibilities, claim tax deductions, and report gross taxable income. In a financial year (1 April through 31 March), if you earn more than a certain amount, you must file an Income Tax Return with the department. Whether you are self-employed or salaried, you can run a partnership or company or a Hindu Undivided Family. Tax returns must be filed with the Income Tax Department by all individuals. It is necessary for assessees to report all income, including salaries, business profits, income from property or dividends, capital gains (both short- and long-term), and income from interests.
A specified deadline must be met by individuals or businesses filing tax returns. In accordance with May 2021 updates, individuals are now able to file their Income Tax Returns earned during FY 2020-21 by 30th September. The Central Board of Direct Taxes (CBDT) has also extended the deadline for filing ITRs for businesses by one month, until 30th November. The Income return online Act specifies a penalty if a taxpayer fails to meet the deadline
Eligibility to file ITR
- In India, income tax is only required of individuals and companies who fall into certain income brackets. The entities and companies that must file their ITRs include:f
- A person with an annual income of over Rs.2.5 lakh.
- Any business registered with a tax ID generates revenue, regardless of whether it makes a profit.
- In cases where excess taxes have been deducted from income, the taxpayer may request a refund.
- Persons who own assets or have financial interests in companies based abroad.
- Indian treaty-advantaged foreign companies.
Filing ITR requires the following documents
When filing your ITR, you must keep certain documents in your hands if you are a salaried individual. Those include your salary slips, savings bank account passbook, details of investments you made in the past year, as well as your Aadhar card and PAN card if any. There are also certain forms that are related to filing ITR that need to be understood. These include:
You will receive this form from your employer and it will contain information about your salary and TDS (tax deducted at source).
The TDS deducted from fixed or recurring bank deposits is shown on this form.
If you sell a property, this form provides information on the TDS deducted by the buyer.
The TDS of the rent paid by your tenant is recorded on Form 16C.
The form is your comprehensive tax statement based on your PAN number. This category includes employees and employers who pay you. In form 26AS, you can list self-assessment taxes or advance taxes paid, as well as proof of tax-saving investments like deductions under Sections 80C to 80U.
Do you need to file an ITR?
Taxpayers in India are only required to file their ITRs if they fall into specific income brackets according to the Income Tax Act.
The filing of tax returns is a yearly activity that every citizen is expected to do. Besides being a tool for determining the amount and means of citizens’ expenditures, income tax returns serve as a platform for assesses to claim refunds and other forms of assistance as required. Filing income tax returns demonstrates that you are responsible. Additionally, it makes subsequent transactions easier for both individuals and businesses since the tax department records their earnings and pays any applicable taxes.
If you earn less than the minimum threshold for mandatory income tax filing, it may still be a good idea to file voluntarily. It is easier to record a transaction if you file returns. Most states require you to submit three years of tax returns as proof when registering immovable property.
Access to credit is easy
In the future, if you plan to take a loan like a mortgage, you should keep a consistent record of filing ITRs. Credit card companies, too, may ask for proof that you have filed it.
Frequently Asked Questions
✓ Does e-verification of returns have to be done?
The IT Department must e-verify returns to process refunds successfully.
✓ Do you have a manual filing option for IT returns?
A manual IT return can be filed.
✓ Does the e-verification process have a fixed number of days?
In order to file a return, one must e-verify it within 120 days of filing.