The Difference between the assessment year (AY) and the fiscal year (FY)

What is Income Tax Return?

In accordance with income tax regulations, every Indian citizen must pay tax on his or her income to the Government of India. You are required to file your Income Tax return Filing (ITR) on an annual basis, no matter if you are an individual, an association, a firm, an LLP, a local authority or a Hindu undivided family. The annual filing of an income tax return is therefore essential. It is possible to file an income tax return online or offline, depending on your convenience.

What is an Income Tax Return?

To file information about one’s income and taxes due in a given year, an individual submits an Income Tax Return (ITR) to the Income Tax Department of India. An ITR should contain information applicable to a particular financial year from April 1st to March 31st of the following year.

When you pay tax in excess during a year, the money is returned to you by the Income-tax Department if you have paid more than you should have during the year.

Is it mandatory to file an ITR?

In order to avoid being taxed by the Government, you must file your tax return according to the tax slabs for each year if you earn more than the limit. In addition to attracting a penalty, filing your ITR after the due date may also prevent you from getting approved for a loan or visa in the future.

How do I know if I have to file an ITR?

Here is a list of people and businesses that are required by law to file income tax returns every year once you know what an income tax return is.

  1. A person less than 59 years old with an annual income exceeding Rs 2.5 lakhs is exempt from paying taxes. Senior citizens 60 to 79 years of age receive a 3 lakh exemption, while super senior citizens (80 years and older) receive a 5 lakh exemption. Section 10 of Income Tax specifies that income should be calculated without deductions.
  2. An income-producing company, even if it hasn’t made a profit in the past year
  3. Individuals who wish to claim a refund on excess income tax or tax deducted from their earnings.
  4.  Having assets outside of the country or having any other financial interest abroad.
  5. Treaty benefits are available to companies based outside of India on intra-country transactions.
  6.  An NRI who earns more than Rs 2.5 lakh in a year is exempt from paying taxes.

How do you file an ITR? What documents are required?

Aadhar card and PAN card are only a few documents you will need to file your income tax return apart from your salary slips, bank savings account   passbook and Aadhar card:

  1. An employer provides you with a Form 16 that details your salary and the Tax deducted at Source (TDS) on it.
  2. A 16A is a form that contains details on interest deducted from bank deposits, such as recurring or fixed deposits.
  3. A Form 16B must be filed if you sell a property so TDS can be deducted from the amount the buyer receives from you.
  4. Your tenant pays you rent and you record it on Form 16C.

5.You can find your comprehensive statement of taxes by using Form 26AS. It includes TDS from your employer, bank, or any other organization that has paid you. Listed are also taxes paid in advance or self-assessment, tax-saving investments, including life insurance policies and term plans, as well as deductions as prescribed by Section 80C to 80U.

What is the process for filing an ITR online?

The Income Tax Department has made e-filing possible by using pre-approved tax preparation software, which you can use from home if you have an internet connection. This has made it possible for you to file your tax return at home. With the benefits of filing your return online, more and more taxpayers are doing so:

  1. You need to furnish your ITR for the financial year to get a refund if tax has been deducted at source on the payment made to you.
  2. In order to determine your eligibility, your yearly income is used as a yardstick when applying for a loan. In the same manner, visa applications also require income proofs, for which tax returns are accepted as the most acceptable documents. An ITR form with details of your earnings gives a clear picture of your previous income.
  3. You might need to provide your ITR when you purchase a term plan in order to determine how much to pay to your nominees if you die or become disabled. This is because ITRs are considered as legally verifiable proofs of income.

What is the best ITR to file?

In general, the Income Tax Department has seven different types of ITR forms for different categories of taxpayers and sources of income.

  1. i) ITR – 1: Residents who have a total income of up to 50 lacs and have income under the following heads (not NRIs, HUFs, or other entities) are required to file this form.
  2. a) Salary/pension income; or
  3. b) Property income from one house
  4. c) Other sources of income
  5. ii) ITR – 2: This form is for individuals and HUFs with income from other sources than business or profession who are not eligible to file ITR-1.

         iii) ITR – 3: Individuals and HUFs earning profits or gains through their business or                               profession must fill out this form.

  1. iv) ITR – 4: All individuals, HUFs, and firms (except LLPs) with income in the following categories need to file this form:
  2. a) Business income or professional income calculated on a presumptive basis under section 44AD, 44AE, or 44ADA
  3. b) Salary and pension income
  4. c) Rental income from a single-family home
  5. d) Other sources of income
  6. v) ITR – 5:  The ITR-5 form applies to individuals, HUFs, companies, and persons who are filing form ITR 7. A partnership firm, LLP, AOP, BOI, Artificial Judiciary Person, Cooperative Societies, and Local Authorities are all eligible to use this form. Investment funds, business trusts, and deceased estates and insolvents can also use it.

         Vi). ITR 6: This form is applicable to all companies except charities and religious trusts that                 are exempt on the basis of Section 11.

         (vii) ITR- 7: This form is for people or organizations required to file a return under Section                  139, Section 139A, Section 139B, Section 139C, Section 139D, Section 139E or Section 139F.

ITR filing deadlines

Taxpayer category Filing deadline for taxes
Individuals, HUFs, AOPs, and BOIs The 30th of September 2021 (extended from the 31st of July)
Audits (Required by Businesses) The 30th of November 2021 (extended from the 31st of October 2021)
Businesses (Requiring TP Report) 31st December (extended from 30th Nov 2021)

What is the best way to check your ITR status online?

Here are a few simple steps you can take to check your ITR status online after you have submitted your tax return on the Government of India’s e-filing website.

  1. The ITR status link on the left of the website will direct you to a page where you have to enter your PAN number, ITR acknowledgement number, and captcha code. Once you’ve filled these details in, your tax filing status appears.
  2. You can find out if your ITR has been verified or processed by logging into the site with your username and password. After logging in, select the assessment year and income tax returns from the drop-down menu.

What is the process for downloading ITR V online?

In the event that you e-file your taxes online without using a digital signature, the Income Tax Department provides you with a verification form that lets you authenticate your e-filing. The ITR V form can only be downloaded online if you file your return without a digital signature.

  1. Visit the Income Tax Department of India website at
  2. The return you e-filed can be viewed by clicking ‘View Returns/ Forms’
  3. From the available options, select income tax returns
  4. You will be able to see the returns you have filed for all years
  5. If you click on the acknowledgement number and select ‘ITR-V Acknowledgment’, you will be able to download the ITR V
  6. To open the document, enter your PAN number and date of birth in lower case.

If you have e-filed your tax return, take a printout of it, sign it and send it to CPC Bangalore within 120 days. You can also generate Aadhar OTP through net banking, ATMs etc. and complete the e-verification process. Make sure you file your ITR on time and avoid missing the due dates to stay safe. If you fail to file your ITR by the due date, you can file it by the 31st March of the next year. So either before the end of the assessment year or by the end of the assessment year, you can file your ITR.

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