What does Income Tax Return Filing mean?
Income Tax Return Filing is the method of presenting the taxpayer's revenue and expense report to the Income Tax Commission. This statement shall be used to assess the tax liability of the taxpayer.
On the basis of current tax slab rate which is framed by the Income Tax Department, tax liability of a person is computed.
When the income of the tax payers exceeds the prescribed income limit as framed by the income tax department,ITR Filing becomes mandatory and such process is regulated under the Income Tax Act 1961.
Income earned during the period of 1st April to 31st March by the taxpayers is mentioned in the declaration.
(If you want to know the income tax payable by you, then you can use this calculator - Income Tax Calculator can used by the tax payers to determine the income tax payable)
Who all are eligible to file an Income Tax Return?
Below mentioned persons ha to file the Income Tax Return:
- Individuals (Resident of India & NRI's) Mandatory where the prescribed income limit gets exceeds and it is optional for others.
- Sole Proprietors - ITR filing is mandatory irrespective of their turnover
- Companies - ITR filing is mandatory irrespective of their turnover
- LLPs and Partnership Firm - ITR filing is mandatory irrespective of their turnover
What are the Benefits of Filing Income Tax Returns?
Various benefits have been provided to the tax payers which are mentioned below:
- Correct and adequate Financials Documentation
Filing of Income Tax Return is considered as a proof of financials. In order to obtain the loan or visa, financial documentation is required to be maintained properly.
- No notice from the Income Tax Authority
As where the ITR is not filed within the time or where there is late submission of ITRs, notice is served by the Income Tax Authority.
- Carry Forward Losses
Losses with respect to house property and deprecation can be carried forward while filing the Income Tax Return.
- Income Tax Refund
Income tax refund can be claimed while filing the Income Tax Return.
- For Speedy Visa Processing
In order to obtain the visa, submission of Income Tax Return for the last 3 years is required to be filed as it is demanded by the embassies.
Due Dates of the Income Tax Return Filing
Different due dates have been prescribed for individuals and corporates taxpayer i.e. salaried individuals are required to file theirs return of Income Tax by 31st July.
Individuals earningfrom business or self-employment are required to file the ITR by 31st March.
30th September is the deadline for the companies and for those taxpayers are required to conduct the tax audit.
What is the procedure file an Income Tax Return?
Electronic mode has been introduced on the Income Tax Department's website through which taxpayer can file the ITR. Nonetheless, it is advisable to take the support of the experts of the industry.
Getting professional assistance can help with the filing of the right tax report, receive an acceptable refund and eliminate penalties for late or inaccurate filing.
A 15-digit acknowledgement number will be produced once the income tax report has been submitted. You have to review your tax return after that. You can submit an ITR using Net Banking Accounts.
Which documents are required to be submitted for Income Tax Filing?
The following shall be required in case of ITR Filing:
- Permanent Account Number (PAN), Aadhar card number, and detail of the current address and other basic information will be required be disclosed.
- Details regarding the Bank account of a financial year shall be required For ITR filing as it is a mandatory disclosure.
- Income from salary, fixed deposits, savings bank account and other necessary disclosures are also required to be disclosed.
- Deduction claimed under section 80 shall be mentioned.
- Filing of TDS return and payment of advance tax shall be mentioned.
Which different deductions are available which can be claimed by an assesses while filing ITR?
- Deduction under Section 80C
Investment in PF, PPF, LIC premium paid, NSC (National Savings Certificate), ULIP, principal redemption of the housing loan, school fees, bank term deposit, senior citizen savings plan, etc. can be claimed as deduction.
- Deduction under Section 80D
Deductions can be claimed where any payment is made towards the medical insurance & preventive health checkup. Such deductions can be claimed by the individual as well as HUF.
- Deduction under Section 80E
Deduction on the loan taken for the higher education can be claimed under this section.
- Deduction under Section 80EE
Interest paid on housing loan can be claimed as deduction under this section.
- Deduction under Section 80G
Where the contribution / donation have been made towards specific funds, charitable institutions,and deductions can be claimed.
What should be avoided while filing Income Tax Return?
Below mentioned are the errors which are required to be avoided while filing the ITR:
- Wrong form selection
Depending upon the category and income of the taxpayer, forms must be selected appropriately.
- Wrong Assessment Year selection
While filing the ITR, one must ensure the selection of the correct assessment yearotherwise, an individual may be liable to pay the penalties and may attract the double taxation.
- Claiming incorrect input of details
Basic information of the assessee such as name, address, E-mail Id, mobile number, PAN, date of birth must betrue and correct.
- Complete source of Income not disclosed
Any income obtained from any origin other than the primary connection shall be fully disclosed, regardless of whether it is taxable or exempted.
- TDS is not reconciled with form 26AS
There must be reconciliation of the Form 26AS with the form 16.
- Return verification
Upon filing the Income Tax Return, it is required to be e-verified through the Net Banking or Mobile Number EVC system and by e-mail.
Penalty for Non filing of Income Tax Return
Where the tax return is not filed within the stipulated time period, an individual may be liable to the penalty provision and the maximum penalty is is Rs 10,000/-.