Looking For Income Tax Return?
What is Income Tax?
Taxes are of two types: Direct Tax and Indirect Tax. Direct Tax is the tax paid by you on your income directly to the government and is levied on profits and income. However, Indirect Tax is the tax levied on goods and services and is collected by someone else on your behalf and is paid to the government. An income tax is defined as a tax that government charges on personal income or profit earned by businesses or individuals over the course of the financial year.
What is Income Tax Return?
- An Income tax return (ITR) is a form used to file information about income earned during the financial year and Income tax liability on the same. The tax liability of a taxpayer is calculated based on his or her income. The income could be in the form of a salary, business gains or profits, income from house property, capital gains, interests or Income from other sources.
- The Income Tax Act, 1961, and the Income Tax Rules, 1962, obligates citizens to file returns with the Income Tax Department at the end of every financial year. These returns should be filed before the specified due date. If a taxpayer fails to abide by the deadline, he or she has to pay a late fee and interest, as applicable. Even if your income is below the taxable bracket, you should file your income tax return to claim TDS refund if any or to carry forward losses or unabsorbed depreciation etc. There are prescribed forms through which income earned and income tax paid thereon are informed to the income tax authority which are ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6 and ITR-7.
Who is liable to file income tax return in India?
1. Where a person is a Company or Firm
2. Every other person if their total income before claiming deduction under 80C to 80U exceeds the maximum amount not chargeable to tax i.e. slab given under income tax act.
However, where the income is chargeable at flat rate i.e. without any slab, then the return filing is mandatory. Example, In case of winning from lottery, TV Shows or Game shows, Income is flat chargeable at rate of 30%. In such cases, return filing is mandatory even if the total income does not exceed slab.
1. Where a person wants to claim refund
2. Where a person to carry forward losses except loss from “Income from House Property”.
3. Where a person is resident but not being non-ordinary resident and have an asset or financial interest in entity located outside India
4. Where a person is in receipt of 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.
Due date to file Income Tax Return
After financial year ends, a taxpayer must file his Income Tax Return on or before the following dates of next financial year.
A person who is liable for audit under either Income tax act or any other act
|A working Partner of firm whose accounts are audited||31st October*|
|A person who is required to furnish report relating to international transactions and specified domestic transactions in form 3CEB||30th November*|
|All other persons||31st July**|
*For FY 2019-20, the due date has been extended to 15th February 2021 considering situation of Corona Pandemic.
** For FY 2019-20, the due date has been extended to 10th January 2021 considering situation of Corona Pandemic.
Any person who fails to file ITR before above mentioned date, he can file belated Income Tax Return with late fees till 31st march of financial year i.e. for FY 2019-20, belated return can be filed till 31st March 202
Late Fees on delayed filing of Income Tax Return
Where Total Income is up to Rs 5 Lakhs
Where Total Income is more than 5 Lakhs and return is filed upto 31st December
|Where Total Income is more than 5 Lakhs and return is filed after 31st December but on or before 31st March of next financial year||10,000|
Advantages of filing Income Tax Return
An income tax return is a legal document that stands as your proof of income. Even if you are not mandatorily required for filing a return, it is advisable to file your IT return. Apart from financial discipline, filing income tax returns has several advantages.
1. Banks require Income Tax Return for approving Credit Card Request.
2. Banks require Income Tax Return of last 2 or 3 years, as per policy of bank, while approving Home loan or business loan.
3. The coverage of Term plan is also decided according to income shown in Income Tax Return.
4. Faster Visa Processing. The embassies and consulates of many countries will ask for your ITRs along with other requisite documents.
5. Carry forward of losses (except loss under “Income from House Property”) is not possible without filing Income Tax Return.