Every individual in India is required to file an income tax return with the government every year. The Income Tax Return (ITR) is a document that discloses an individual’s taxable income and tax payable for the previous year. It is also used to determine an individual’s eligibility for various benefits and subsidies.
The Income Tax Return ITR is tool taxpayers use to send information to the IRS regarding their earnings and tax payments. Taxpayers have to file their ITR before the due date. The ITR method for taxpayers can be determined by the type of taxpayers, including corporations, individuals, HUFs, etc. You select the ITR depending on the amount and nature of your income and general income.
Before making an ITR, Taxpayers can determine their tax liabilities and pay the tax. If you experience failure carryforward or setoff of carried-over losses, You can submit an ITR. Look up Form 26AS for details about TDS and other taxes, including FD interest, when filing your ITR. Use Form 16 to complete the specifics of your earnings and tax-saving deductions statements.
Introduction: What is an ITR?
An Indian tax return, also known as an income tax return or ITR, is a document filed by an individual or entity with the Indian tax authority (ITA) to declare their income and pay taxes. All individuals residing in India must file an annual ITR regardless of their source of income. Form 1040EZ is the most common form used in the United States to report taxes. Filing your taxes early can save you money on penalties and interest.
The ITA requires all taxpayers to provide information on their ITR, such as their name, address, and taxpayer identification number (TIN). The ITA also requires taxpayers to list all sources of income they received during the year. In addition, taxpayers must report any expenses they paid during the year related to their business or professional activities.
Types of ITR
- ITR 1
- ITR 2
- ITR 3
- ITR 4
- ITR 5
- ITR 6
- ITR 7
People who reside in India earn a total that is not more than Rs. 50 lakh are qualified. ITR-1 can be filed by anyone who makes income from work, a home, or any other source. An NRI cannot submit an ITR-1. It can be filed on Form 16 by salaried taxpayers.
Individuals and HUF receive income from sources other than their business or profession. Individuals and NRIs who make money through a job or a residence capital gains, a home, or other sources can submit Form ITR-2. ITR-2 can get filed for salaried persons who have earned profits or have suffered losses due to the purchase and sale of stocks.
Individuals are required to report the earnings earned by a business or profession. People who are salaried and earn income through the intraday stock exchange or futures and options trading are required to complete Form ITR-3. Individuals can utilize ITR-3 to track the revenue earned from real estate, jobs capital gains, business or trade (including the presumptive income), and other sources.
Individuals, HUFs, and partnerships must pay a presumed tax system for their income. ITR-4 can be used to record the revenue of a business with an annual turnover of 2 crores, which is taxed under section 44AD. Additionally, ITR-4 is for income from a job with revenue of upwards of Rs 50 lakh which is subject to taxation under section 44ADA. ITR-4 is a tax form that can be submitted by a freelancer who is employed in a regulated job.
LLP, AOP, and BOI are all acronyms for alliance companies. Partnership companies, LLPs, Bois, and AOPs, make ITR-5s available to report their business, professional earnings, and other income sources.
It is a tax return used by companies to record revenue from their occupation or industry in addition to other types of income.
The tax form for federal taxpayers filed for companies, partnerships, and trusts exempt from income tax.
Types of Forms to File ITR
An employee gets a Form 16 TDS certificate from their boss. The gross pay and exemptions, such as HRA and LTA, are listed on Form 16. The form includes the following:
- The employee’s net taxable income.
- All other revenue or loss-reported tax-saving deductions.
- Salary TDS.
The tax deducted at source (TDS) on different earnings, such as wages, debt, and the selling of immovable property, is detailed on Form 26AS. Details of self-assessment tax, advance tax paid by an individual, and listed financial transactions are also included on the form.
Form 15G and Form 15H:
You will earn income without TDS using Form 15G and Form 15H. If you are under 60 and your gross taxable income is less than the basic exemption cap, you can file Form 15G. If you are a senior citizen and the tax owed on your net salary is zero, you will file Form 15H. To the individual who pays your taxes, you must apply Form 15G or Form 15H.
Why should you file ITR?
It is mandatory for one to file income tax returns in India, if he comes under any of the following conditions:
- Individuals who fall within the respective tax slabs.
- If it’s a Company or Firm, irrespective of the profit or loss made in a financial year.
- If a tax refund needs to be claimed.
- If a loss under a head of income needs to be carried forward.
- If being a resident of India, one has an asset or financial interest in any entity located outside India.
- If being a resident of India, one is a signing authority in a foreign account.
- If one receives income derived from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not-for-profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust.
- If one is applying for a loan or a visa.
- If an NRI derives any or all of his/her income through sources in India, that income is liable to be taxable in India, and income tax returns for the same will be necessary.
As of the introduction of filing income tax returns, these situations require an electronic filing of income tax returns:
- If a refund is required, it will be refunded.
- If the total gross annual income is more than Rs.5 lakh
- If you need an Income tax refund is necessary, a tax refund.
- ITR 3, 4, 5, 6, and 7 need to be electronically filed
How to Download ITR Form?
This is a step-by-step procedure to download ITR forms from the Income Indian Tax Department’s site:
- Step 1: Visit the official income tax department (ITD) website at https://www.incometaxindia.gov.in
- Step 2. On the menu at the top of the homepage, Click on the option ‘Forms/Downloads’ and then navigate to the “Income Tax Returns” menu.
- Step 3. You’ll be taken to a different page where you can find a listing of all ITR forms. Click the PDF option next to each record to download the documents.
Which ITR to File and who is eligible?
The following are the specifics of these ITR modes, including who should use them and who should not:
|ITR||Who can File||Who cannot File|
|ITR 1 –||Individuals who meet the criteria for Ordinarily Resident status and have a gross income of up to Rs 50 lakh.Having revenue from the following sources: wages, a single-family residence, and other sources of income up to Rs 5,000;This form often refers to equivalent income earned by a single individual, such as a partner or infant, and combined in the taxpayer’s hands.||Non-residents; Hindu Undivided Family (HUF); Hindu Undivided Family (HUF); Hindu Undivided Family (HUF); Hindu Undivided Family (HUF); Hindu Undivided Family (HUF); Hindu UndividedResidents with a net income of more than Rs 50 lakh regularly;a company’s director;Holding unlisted equity investments; bringing losses forward under the heading of “profits from house property”;Having revenue from sources outside of India and properties located outside of India|
|ITR 2 –||Non-residents / Residents but Not Ordinarily Residents / Ordinarily Residents; Non-residents / Residents but Not Ordinarily Residents / Ordinarily Residents / Ordinarily Residents /Undivided Hindu Family;Having a net revenue of over 50 lakh rupees;a company’s director;Investing in stocks that aren’t publicly traded;Having revenue from a variety of sources, including wages, multiple house properties, capital returns, and other sources of income;Having revenue from sources outside of India and properties located outside of India||Individuals / HUFs with a source of income from a company or a career|
|ITR 3 –||Individuals and HUFs of commercial or professional income; include partners in a firm.||Individuals or HUFs without a source of commercial or professional profits.|
|ITR 4 –||Individuals, HUFs, and firms (other than LLPs) with corporate or technical profits calculated on a “presumed basis.”||A person who serves as a director of a corporation or owns unlisted stock shares.|
|ITR 5 –||Anyone who isn’t an entity, a HUF, or a corporation filing an ITR 7 (eg. LLP).||ITR 7 is filed by a person, a HUF, or a corporation.|
|ITR 6 –||Except expressly omitted, all businesses.||Companies who seek to be excluded from paying taxes on charitable or religious trust revenue.|
|ITR 7 –||A charitable or religious trust, a political group, a science research organization, a news agency, a hospital, a trade union, a university, a college, or other organizations such as an NGO or related organizations are all examples of people.||There is no other kind of taxpayer.|
Documents needed to fill out ITR.
To file IT returns online, The following documents are required:
- Pan card
- Form 26AS
- Form 16A, 16B, 16C
- Salary Pay slips
- Statements of bank accounts
- Certificates of interest
- TDS certificate
- Evidence of tax savings investments
How do I file an ITR for the AY 2023-24
You can file your ITR through this official website for the Income Tax Department. But, the registration procedure must be completed before being able to complete your IT return online. In India, the Government of India’s Income Tax Department (ITD) has recently revamped the online portal for the e-filing of tax returns for income. The newly updated portal makes filing an e-filing simpler and is completed following the steps listed below:
- Step 1. Following the rules outlined by the Income Tax rules, You can determine the tax burden on your income.
- Step 2. You may look up Form 26AS for an overview of your TDS payment for various assessment periods.
- Step 3. Based on the eligibility criteria set by the Income Tax Department (ITD), You will need to decide which category you are in.
- Step 4: Visit the official e-filing portal of the income tax department at e-Filing Home Page, Income Tax Department, Government of India (https://eportal.incometax.gov.in/iec/foservices/#/login).
- Step 5. When you’re a new user, you can sign-up by clicking the Register button.
- Step 6. If you’ve already signed up through the portal in the past, then click on the “Login” button.
- Step 7. Select the “File Income Tax Return” option on the ‘file tab.
- Step 8. On the page that is available on the website, you must select the category you belong to – Individual and Hindu Undivided Families (HUF) and so on.
- Step 9: Choose the suitable ITR Form which is appropriate for you.
- Step 10. The user will then be required to enter the information for her account at the bank too. If you’ve already supplied the information before this, you will need to validate the information.
- Step 11. Once this is completed, you’ll get taken to a different web page on which you can check the information you filled out on your ITR. Verify the information and make necessary adjustments if needed. After you’re sure that the details you have that are provided on your form are correct, please verify that the document is accurate and prove it.
- Step 12: When the entire process has been completed, check the tax returns and then send an original copy of the returns to the Income Tax Department.
Can you complete IT Returns without a Form 16?
You can submit income tax returns (ITR) without Form 16.
The steps to file ITR with or without Form 16
Here are the steps you need to take to file an ITR if you don’t own Form 16:
- First step: Calculate the amount of income that you have earned from all sources, which includes your pension or salary rental, capital gain on the sale of a capital asset, interest from your fixed deposit and bank accounts, and so on.
- Step 2. Find out your Tax Deducted At Source (TDS) that you can complete using Formula 26AS, which can be downloaded on the website of TRACES.
- Step 3. Calculate your tax deduction based on your income. If you are a recipient of House Rent Allowance (HRA) in your salary breakdown, You can deduct HRA, for which you need to provide the rental receipts to your company’s payroll department. If the receipts have not been done in advance, you may also claim them when filing your tax returns.
- 4. Determine your income total for the whole financial year you’re filling out tax returns. Your total earnings are the sum received; the TDS was taken out of the earnings.
- 5. Make sure you claim the deducts you qualify for on your investment and payments. This should be included in the calculation of your tax-deductible income. If you are eligible for Provident Fund deductions, you can only claim deductions on your contribution, not your employer’s.
- 6. Determine your tax-deductible earnings by subtracting the total deductions you could get from all your earnings.
- 7. Estimate your annual tax obligation using the slab rate tax that applies to you.
- 8. Find out the amount of tax due by you. If you find that the TDS you deduct on your income is lower than your tax liability when calculated in step 6. The tax to have to be paid is a different amount. If the TDS you have deducted is more than the tax you owe, you’ve paid tax over the limit that you are entitled to an amount of refund when you file your IT tax returns.
- Step 9 Then, you can submit your IT tax returns.
Penalty for Late Filing of ITR
Mass penalties are imposed on the taxpayer if the tax returns aren’t filed by the deadline. In addition to the fines and other liabilities, a taxpayer may face additional problems and consequences if the returns aren’t completed. Based on the date that returns are filed past the deadline, people might be subject to penalties ranging from Rs.1,000 or Rs.10,000.
|Due Date of ITR Filing||Penalty for Income below Rs.5 lakh||Penalty for Income above Rs.5 lakh|
|Before 31 July||Nil||Nil|
|From 1 September to 31 December||Rs.1,000||Rs.5,000|
|From 1 January to 31 March||Rs.1,000||Rs.10,000|
TDS on taxes can differ from the actual tax liability on the paid income. TDS rates are a proportion of fixed payments, while income is charged at slab rates. If the TDS is smaller than anticipated, you will have to pay the remaining tax. You will get a refund if the TDS is too big. You should total the annual revenue from all sources and determine the tax due/claim rebate after filing your ITR.