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A Simplified Guide to Income Tax Return (ITR) Filing Process in India

As per the Income tax rules and laws, every Indian citizen must pay tax on their income to the Indian government. Income Tax laws say that your income is taxed every year, no matter if you are an individual, an association, a company, an LLP, a local government, or a Hindu undivided family. Because of this, it is important to file your Income Tax return (ITR) every year. It’s up to you whether you want to file your income tax report online or in person.

What is an Income Tax Return?

An person of India is required to file a document known as an Income Tax Return (ITR) with the Income Tax Department of India in order to provide information regarding his income and taxes that are owed during the year in question. The information that is submitted in an income tax return (ITR) need to be appropriate for a certain fiscal year that begins on April 1 and ends on March 31 of the following year.

The income that you receive can come from a variety of sources, including but not limited to a salary, profits from a business, the sale of a house or property, dividends or capital gains, interest received, and other sources. The Department of Income Tax will issue a refund to you if you have paid more than the required amount of tax during the course of a year.

Is Filing ITR Compulsory?

According to Income Tax regulations, individuals who earn more than the tax-exempt threshold set by the Government are obligated to file their tax returns based on the applicable tax brackets for each year. Failure to submit your Income Tax Return (ITR) by the deadline may result in a penalty and could also hinder your chances of obtaining a loan or visa approval in the future..

Who is Required to File ITR?

Now that you know what an income tax return is, let us take a look at the list of people as well as enterprises that are mandated by law to file income tax return every financial year.

  • An individual who is less than 59 years old and has an annual income exceeding Rs. 2.5 Lakhs. Income calculation should be done without allowing deductions specified under Section 10 of the Income Tax Act.
  • An individual between 60 to 70 years of age (senior citizens) with an annual income surpassing Rs. 3 Lakhs.
  • Super senior citizens (80 years and above) with an annual income exceeding Rs. 5 Lakhs. Income calculation should be done without allowing deductions specified under Section 10 of the Income Tax Act.
  • An individual who wants to claim a refund on surplus income tax or tax deducted from the annual income.
  • An individual having assets or any other financial interest outside of the country.
  • NRIs (Non-Resident Indians) earning above the basic yearly exemption limit of Rs. 2.5 Lakhs.
  • A registered company with yearly income, regardless of whether it has made any profit during the period.
  • A company located outside of India with treaty benefits on transactions made within the country.

What Documents do you Need to File ITR?

When you begin the process of completing your income tax return, in addition to your salary stubs, the passbook for your bank savings account, your Aadhar card, and your PAN card, there are a few other papers that you will need to have in order to make the process of filing your taxes significantly simpler:

  • Form 16: It is provided by your employer and contains details of the salary paid by them to you and the Tax deducted at source (TDS) on it.
  • Form 16A: It contains details on TDS deducted on interest received from deposits such as fixed or recurring bank deposit.
  • Form 16B: If you sell a property, TDS applies on the amount received from you by the buyer, the details of which are present in this form.
  • Form 16C: TDS details of the rent paid by your tenant to you are recorded here.
  • Form 26AS: This form represents your comprehensive statement of taxes against the PAN number. It includes TDS by your employer, bank or any other organization that has made a payment to you. Advance taxes or self-assessment taxes paid, proof of tax saving investments such as deductions as prescribed from Section 80C to 80U including life insurance policy or a term plan are also listed.

How to File ITR Online?

If you have access to the internet, you can now have the ability to file your tax return from the comfort of your own home. Through the use of electronic filing, which makes use of tax preparation software that has been pre-approved by the Income Tax Department, this has been possible. Because of the many advantages that come with submitting tax returns online, an increasing number of taxpayers are doing so every year.

  1. Getting Refund: If you want to claim a refund of the amount that was deducted from the payment that was made to you for tax purposes and you want to do so, you will need to provide your income tax return for the current fiscal year in order for the refund to be completed.
  2. Verification Proof: Your annual income is used as the measure to determine whether or not you are eligible for a loan when you submit an application for one. The borrower is provided with a comprehensive image of your former income through the use of an ITR form that includes data of your earnings, which lends credibility to your application. Applications for visas, on the other hand, require proof of income, and the documents that are most commonly approved for this purpose are tax returns.
  3. Proof of Income: For the purpose of determining the amount of compensation that will be given to your nominees in the event of your death or disability, your insurer may demand your income tax return (ITR) when you purchase a term plan. The Individual Tax Return (ITR) is regarded as an evidence of income that may be formally verified for the purpose.

Benefits of Filing Income Tax Return

Filing Income Tax Return (ITR) in India offers several advantages, even if your income falls below the taxable limit. Here are some key benefits:

  • Claim tax refunds: If excess tax was deducted from your income at source (TDS) or you qualify for various tax rebates, filing ITR allows you to claim that money back. This can be especially helpful if you have made investments or paid medical bills that qualify for tax deductions.
  • Get loans easier: Banks and lenders often ask for ITRs as proof of income when assessing your loan eligibility. Timely filing of ITRs helps build a positive credit history, which can lead to better interest rates and loan terms.
  • Act as legal proof: ITRs are accepted as valid documents for address and income proof for various purposes, such as applying for visas, government tenders, or even renting an apartment.
  • Carry forward losses: If you experience business losses in a particular year, filing ITR allows you to carry those losses forward and offset them against your income in future years. This can help reduce your tax liability in those years.
  • Avoid penalties: Not filing ITR by the due date can lead to penalties and interest charges from the government. These penalties can be significant, so it’s important to file your ITR on time.

How to Check Your ITR Status Online?

After you have submitted your tax return, you can check its status online easily on the e-filing website of the Government of India. Depending on whether or not you have created a login account on the website, here are a few simple steps to check your ITR status:

  • Without login details: Click on the ITR status link displayed on the left of the website. It will direct you to a page wherein you need to fill details of your PAN number, ITR acknowledgement number and captcha code. Your tax filing status appears once you have keyed them in.
  • With login details: Login to the website using your username and password. Then, click on the ‘view returns or forms’ option. Select the assessment year and income tax returns from the dropdown menu. Post this, you can see whether your ITR has been verified or processed.

Why You Must File ITR Before 31st December 2024?

It will be more correct, to make sure that all the details of the accounts are true, the ITR returns on filing need much more attention. For avoiding errors one needs to check documents, tax statements, interest income certificates, etc. If one returns ITR then the chances of errors become lesser.

Payment Interest– the assessee who has to pay a tax of more than 1 lakh has to file earlier so as to increase interest payment on a monthly basis. Failure to file returns will levy a 1% interest for every month.

The loss will be moved forward: the Income-tax plan is to take ahead the losses from one fiscal year to another. although, taxpayers can avail of this if they file ITR before the expected last date.

Quick Refund: if the taxpayers file their return before November 30 then refunds can be processed who are waiting for the same. Earlier ITR filing may be confirmed before it gives quick tax rebates.

FAQ’s

What is ITR filing?

ITR stands for Income Tax Return. It’s a formal method wherein taxpayers declare their taxable earnings, deductions, and tax liabilities for a particular monetary 12 months to the Income Tax Department of India. Essentially, it’s a way for individuals and entities to file their profits and pay taxes for that reason.

What files are required for submitting ITR?

Several documents are critical for submitting an Income Tax Return (ITR) in India. These consist of your Permanent Account Number (PAN) card, Aadhaar card, Form 16 (supplied through your business enterprise), bank statements, Tax Deducted at Source (TDS) certificate, info of investments, assets files, and any other relevant financial information. Having those documents geared up guarantees correct reporting of your income and deductions.

What are the different ITR forms, and how do I know which one to use?

The Income Tax Department presents numerous ITR paperwork tailored to one of a kind varieties of taxpayers and earnings sources. For instance, ITR-1 is for salaried individuals with profits from profits, one residence property, and interest profits. On the opposite hand, ITR-4 is for individuals and Hindu Undivided Families (HUFs) with profits from business or profession. To determine the precise shape, determine your earnings assets and financial sports.

Can I report ITR online?

Yes, you may report your Income Tax Return (ITR) on-line through the Income Tax Department’s professional internet site or thru authorized e-filing intermediaries. Online filing gives comfort, safety, and faster processing compared to standard paper filing. It involves filling out the specified bureaucracy electronically, attaching applicable documents, and filing them digitally.

How can I rectify mistakes in my filed ITR?

If you find out errors or omissions in your filed Income Tax Return (ITR), you can rectify them with the aid of filing a revised go back within the prescribed time body. To try this, you want to pick the choice of ‘Revised Return beneath Section 139(5)’ at the same time as submitting online or publish a revised paper go back. It’s important to accurate any inaccuracies to ensure compliance with tax guidelines.

How can I check the status of my filed ITR?

You can without difficulty take a look at the fame of your filed Income Tax Return (ITR) online through the Income Tax Department’s e-submitting portal. After logging in in your account, navigate to the ‘My Account’ segment and select ‘View Returns/Forms’ to music the repute of your filed returns. This lets in you to stay updated at the processing of your go back and any similarly actions required.

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