Everything You Need to Know About Income Tax Returns Filing

The Income Tax Returns or ITR form has to be filled out and submitted to the Income Tax Department of India every year within the due date. The tax returns is a form detailing that provides all relevant information related to your income and the applicable taxes during a particular financial year, from 1st April to 31st March.

Taxpayers need to know the steps to file ITR and all the rules to ensure they don’t make mistakes. This blog discusses relevant details associated with income tax returns filing. Scroll down!

Why is it Important to File Income Tax Returns in India?

Anyone earning above a certain threshold must pay taxes and the tax filing process allows the government to know how much you owe. Moreover, if you have paid excess TDS tax filing allows you to claim returns if you have paid an excess amount of TDS. Here are some other reasons why you need to file Income Tax Returns:

• It serves as a legal document.
• It can be presented as part of identity proof.
• It can be used as income proof.
• It helps you claim deductions and get the money back, helping your finances heavily.
• It holds importance when you apply for loans as the ITR form serves as an identity and income proof.
• It improves your chances of getting approved for a VISA.
• In case you do not file for Income Tax Returns, you will be unable to carry ahead or set off any losses.
• Filing for ITR can also help you escape penalties and punishments.
• It helps you as well as the nation as the tax you pay is utilised by the government to build infrastructure and medical and defence-related facilities. Such government projects benefit all Indians as a whole.

With as many benefits as highlighted above, it is your financial responsibility to file an ITR in India.

What are the Benefits of Filing Income Tax Online?

Here are some of the advantages of filing income tax online:

• It is far more convenient as you can file ITR from the comfort of your home. You can flexibly pick your own time to do it.
• It is a transparent procedure, with much of the ambiguity present in the paper filing method being absent.
• Notification related to the tax filing process and receipt confirmation/rejections is communicated within 24 hours.
• There is less scope for record manipulation.
• The overall accuracy is increased in the online system with higher accuracy in data recording.
• Filing for ITR online also saves time which you would have to otherwise spend going to a physical financial branch.
• By switching from the paper filing method to the online method, you are also saving money.

What are the Eligibility Criteria for File Income Tax Returns?

There are different types of ITR, with different points of eligibility associated with each type. We have listed below the eligibility criteria for each type of ITR:

1. ITR 1

• You must be a resident of India.
• You must earn a total income of up to Rs. 50 Lakh.
• You must earn from a home, a job or other outlets.
• You must not be an NRI.
• You may be a salaried taxpayer filing through Form 16.

2. ITR 2

• You must be an Individual and HUF to file for ITR 2.
• You must earn from sources other than your profession or business.
• You must be an individual or NRI who earns from a home, a job, capital gains, and other sources.
• You must be a salaried person who has drawn profits or losses from sales or purchases related to stock.

3. ITR 3

• You are an individual who has disclosed earnings from an occupation or enterprise.
• You are a salaried individual who earns from the intraday stock exchange or other options trading.
• You have revenue from capital gains, jobs, a company, real estate, trade or other sources.

4. ITR 4

• You must be Individuals, HUFs, or partnership companies.
• A company is required to garner a turnover of up to Rs. 2 Crore (subject to taxation under section 44AD).
• You can earn from occupation with a turnover of up to Rs. 50 Lakh (subject to taxation under section 44ADA).
• You may be a freelancer working in a notified profession.

5. ITR 5

• Partnership companies, LLPs, AOPs, and BOIs are eligible to file ITR-5s.
• The above must disclose profits earned through their professions, and businesses and specify other forms of income, if any.

6. ITR 6

• Businesses are eligible to file for ITR 6.
• Businesses must disclose earnings from occupation, and industry and specify other sources of income, if any.

7. ITR 7

• Partnerships, Businesses or trusts which are excluded from paying income tax are eligible to file for ITR 7s.

What are the Documents Required to File Tax Returns?

As the income tax filing procedure includes quite a number of steps, it can be simplified if you already have the following documents in handy:

• Form 16
• Aadhaar Card
• Pan Card
• Salary slips
• Details of bank account
• Bank statement/passbook
• Tax-saving investment proofs
• Form 26AS
• Form-16A/ Form-16B/ Form- 16C
• Interest certificates from banks and POs
• Proof of capital gains
• Premium health insurance proofs

How to Download the Income Tax Return Form?

To download the Income Tax Return form, follow these steps:

Step 1: Visit the official site for income tax filing and click the 'Register' or 'Login' button.

Note: Click the ‘Register’ button if you’re a new user. Then, proceed to choose a user type, and provide the necessary information. Click ‘Login’ if you’re a returning user.

Step 2: Once you’re logged in, click on ‘My Account’

Step 3: Choose ‘Download Pre-filled XML.’

Step 5: Pick your ITR Form number according to the nature of your income (specified in the description box).

Step 6: Download the form in Microsoft Excel format and save the XML file to your desktop. You can access the Excel and XML utilities by clicking on the ‘Import from XML’ section.

Step 7: You can then simply import data from the already-filled and downloaded XML file into the Excel utility, to view it in your own time.

How Can You File Your Income Tax Returns?

The simplest way to file your Income Tax Returns is to do so online. We’ve listed down the steps you should follow to successfully file your income tax returns online:

Step 1: Go to the official website for Income Tax e-filing.

Step 2: Select "Login" and put in your PAN card details in the User ID section. Click “Continue” to proceed to the next step.

Step 3: Tick the security message box when it pops up on the screen and then type in your password. Click on “Continue” again.

Step 4: Go to the “e-File” tab, next and click on the tab which reads “Income Tax Returns”.

Step 5: Click on “File Income Tax Return”.

Step 6: Select the relevant “Assessment Year”. (For example, click on ‘AY 2024-25’ if you are filing for FY 2023-24.)

Step 7: Choose the mode of filing as “Online”.

Step 8: Select the filing type -revised return or original return.

Step 9: Select the relevant taxpayer status among the following options: Individual, HUF, or Others.

Step 10: Once you click on “Continue”, you’ll have to choose the appropriate ITR type from the 7 available ones.

Step 11: Next, specify the reason why you’re filing for ITR.

Step 12: Information regarding your Aadhaar, PAN, name, contact information, birth date, bank details, etc. will be pre-filled. Cross-check these details to make sure they are relevant.

Step 13: Finally, e-verify your ITR within a time limit of 30 days. If you miss this step, it’s equivalent to not filing for ITR at all. So, be sure to e-verify it responsibly.

Also Read - Professional Tax - Its Meaning, Slab Rates, and Compliance

How Can You Check Your ITR Status Online?

Follow the below-mentioned steps to check your ITR status online:

• Step 1: Visit the income tax e-filing portal homepage.
• Step 2: Select ‘Income Tax Return (ITR) Status’.
• Step 3: You can then view the Income Tax Return (ITR) Status page where you are required to enter your mobile number and acknowledgement number. Click 'Continue' to proceed.
• Step 4: You will receive a 6-digit OTP on your registered mobile number. Enter it into the empty field when prompted and click on ‘Submit’.

What is the Penalty if You Don't File Income Tax Returns?

If you’re unable to file for income tax returns under any circumstances, a penalty of Rs. 5000/- will be levied under Section 271F (penalty for failure to provide return of income). The tax department of India has the right to impose this amount as a penalty on taxpayers if they've missed filing for ITR on time.

Also Read - Tax Exemption & Its Various Categories

To Conclude

Filing your income tax return (ITR) on time can help you claim various deductions and benefits. Additionally, the ITR form serves as a legal document that you can present to increase your chances of getting approved for a loan or a visa. On the other hand, if you fail to file your income tax returns, you may have to pay various penalties.

Frequently Asked Questions

1. Does everyone have to file income tax?

If your income is above Rs. 2.5 Lakh per year, you must file for an income tax return in India. In the case of senior citizens (above the age of 60 years and below the age of 80 years), it is important to file for income tax returns over the income limit of Rs. 3 Lakh.

2. What are the details required for e-filing an income tax return?

For e-filing an income tax return, you must have in handy some documents like a PAN card, interest income alongside other interest certificates, passbook/bank statement, monthly-wise payslips of salary, etc.

Disclaimer

This blog provides informational content on tax benefits and rules based on the current provisions of the Income Tax Act of India, 1961. The interpretations are subject to change as per amendments made by the Government of India. Applicable rates of GST and cess will be as per the current regulations. Readers must seek professional advice for accurate and up-to-date information.
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