Overview of Income Taxes
An individual in India pays direct taxes, which are levied directly on his or her income, and indirect taxes, which are levied indirectly. Income tax, for example, is an example of direct tax, and Goods and Services Tax, service tax, etc., are examples of indirect taxes.
Currently, all individuals who receive income in India are subject to income tax under the Income Tax Act, 1961. Several sources of income can be taxed under the Income Tax Act, including salaries, houses, capital gains, businesses, and professions. An individual, Hindu undivided family, association of individuals, body of individuals, or company are taxed under the Income Tax Act.
Income Tax Return Filing – What is it?
Taxes are imposed on the income earned by individuals and businesses. Income tax is levied on the income of individuals and collected by the government. Taxes on income earned are due in the same financial year in which they are accrued when they are paid as advance tax. Indicating and calculating the income as well the tax liability is provided in the Assessment Year. An income tax return is an intimation form. Taxpayers have different forms and time limits for filing ITRs depending on their situation.
While the Income Tax Return forms have been simplified in recent years, taxpayers are still required to prove their expenses, exemptions, and deductions through these new or modified schedules. To ensure the correct filing of your income tax return, you should seek assistance from experienced professionals when filing online.
Income Tax eFiling: What is it?
Tax returns can be filed in two ways: the online method and another offline method. As per Government Instructions, all tax returns must now be filed online only. Offline filing is not available.
- From 1st April 2022, ITR Online filing will be mandatory for the following cases:
- If you have an income exceeding 2.5 lakh Rupees in a year
- If you would like a TDS refund, please follow these steps:
- If you wish to take advantage of the carryover of losses
- if a foreign travel expense exceeds 2 lakh rupees per year
- if electricity bill expenses exceed 1 lakh rupees per year
- If the annual electricity bill exceeds 1 lakh rupees a year
- if you have TDS of more than 250exceed 1 lakh rupees per
The Due Date for filing tax returns
- The income tax return deadline for individuals, bodies of individuals, associations, Hindu undivided families, and Hindu undivided families is July 31, and those who pay an electricity bill over 1 lakh rupees are taxpaying. The income tax return deadline for a company or business with an audit requirement is September 30. A person who has been required to file a report in form No. 32CEB under section 92E has until November 30 each year to file an income tax return. The taxpayer must also pay the late fee if the return is not filed by the due date.1. Filing an income tax return: Points to consider
2. Select the correct income tax return form
3. Taxable income should be clearly identified under the appropriate heads
4. Declare all your assets if your income is more than Rs. 50 lakhs in a year.
5. Ensure that all documents and proofs are kept safe for future reference.
6. Should mention your Aadhar Number
7. Study your Form 26AS i.e. tax credit statement
8. Check your personal details
9. Also add interest income earned from fixed deposits
10. Your source of income should not be hidden
11. Report your exempted income
12. Should verify your income tax returns
13. The filing of income tax returns has several benefits
14. Allows losses to be carried forward
A majority of businesses face losses during their first year of operations. Losses can be carried forward for an additional 8 years if an ITR is filed. Losses can also be deducted from future income majority of businesses face losses during their first year of operations. Losses can be carried forward for an additional 8 years if an ITR is filed. Losses can also be deducted from future income
Determine your financial worth
Taxpayers’ financial worth is defined by ITRs filed with the government. The track of ITR indicates the financial capacity of a person as well as increasing their capital base. The track of income and financial worth is determined by the previous ITR filed. To get a sense of the business’ ability, investors and institutions look forward to returns filed.
Risk management and loan processing
Tax returns provide important numbers and capital base data that are helpful for loan processing. The higher the capital base, the easier the loan processing. The ITR also serves as a substantial document for high-risk cover insurance it return filing online
Reclaim TDS withheld from your salary
Salary workers receive their income after deducting applicable TDS. It is possible that, after eligible deductions, the taxes they owe are less than the taxes actually deducted. eligible deductions, the taxes they owe are less than the TDS actually deducted. In such cases, they should claim
To file your income tax return online, follow these steps:
- Create your e-filing account here to file your income tax return online
- Please enter your PAN and password
- In order to e-verify your ITR through Aadhaar OTP, you must link your Aadhaar to your e-filing account. Choose the option of “Link Aadhaar” under the Profile Settings tab to do this. The linking process requires you to fill out details such as your name based on the Aadhaar card, your Aadhaar number, etc.
- You can view a summary of the taxes you paid in the financial year in the Quick Link menu by selecting Form 26AS. This includes TDS, advance tax, and self-assessment tax.
- Download the correct Income Tax Return (ITR) Form (find the correct ITR form in the table at the end of the article).
How do you file your income tax return using the correct ITR form?
- Individuals with income up to Rs. 50 lakh per annum (other than RNORs) from salaries, one house property, interest, etc., and agricultural income up to Rs. 5000 per annum.
Individuals/Hindu Undivided Families (HUFs) do not receive income from profits and gains of their businesses or professions
- Those having income from business or profession profits/gains (ITR 3)
- Individuals, HUFs, and firms (other than LLP) with income from business or profession that is computed under sections 44AD, 44ADA, or 44AE and does not exceed Rs. 50 lakh.
- Companies, AOPs, BOIs, and LLPs in ITR 5
- Companies other than those claiming exemption under ITR 6 Section 11
- It is intended for individuals and entities required to file returns under Section 139(4A), (4B), (C), (D), (E), or (F). The information provided in this article is of a general nature and is for informational purposes only. Before taking any action or refraining from taking any action, you should seek specific professional advice. We cannot replace specific advice tailored to your circumstances. Users should verify the content from original Government Acts/Rules/Notifications etc., as the information is subject to change based on the relevant Acts, Rules, Regulations, Policy Statements, etc. of the Income Tax Department.
- Summary of income tax returns
- The income tax departments require every taxpayer, whether he or she is an individual or a Hindu undivided family, an association, a company, etc. to file a tax return. Filing tax returns is very easy and can be done online as well. Fill out a tax return and learn how to do it
Frequently Asked Questions
Is NIL ITR filing mandatory?
The ITR must be filed by all business entities (Company, LLP, Firm), even if they have no income or taxes owing. When the income of an individual exceeds the basic exemption limit, it is recommended that an ITR be filed in order to avoid scrutiny from the Income Tax Department. As proof of income, you can provide the same if your tax liabilities are zero and you have previously filed the ITR.
Can IT returns be filed online by what dates?
Let’s take the example of (F.Y. 2017 – 18 & A.Y. 2018 – 19) as an example of the due date for filing ITR online.
(31st July 2018) – Individuals, HUFs, Bois, and AOPs (who do not fall under the audit provisions).
Up to 30th September of next year (30th September 2018) – Companies including other entities where Audit provisions apply
When I lose business income, should I file a return?
If you suffer a loss, you should file ITR immediately. With online ITR filing, you can carry forward the losses to a future fiscal year to offset them against future profits.
When filing IT returns, is tax payment made?
While filing the ITR, if the tax liability is more than the advance tax, the due amount must be paid with interest, if applicable, if there was already an advance tax paid.