About Income Tax Return
As a citizen of any country, you enjoy various different types of facilities like roads, flyovers, infrastructure, public transport, parks, etc. These facilities come at a cost that the government has to bear. Where does the government get this money from? The government earns its income by charging the people for their services in the form of direct and indirect taxes.
The thought of why you should pay tax when you earn your money with so much hard work must have crossed your mind. There is also a comparison with developed countries providing so many extra benefits like medical costs with virtually no fees at all. Indian Tax culture and system are way different than these countries. Indian demographics and per capita income is also extremely low as compared to these developed nations and hence it becomes extremely important to keep poverty and diversified poor segments of the society and their upbringing before the upbringing of the rich and the middle class.
In countries like the USA, they have 45% of their country paying taxes. While that number in our countries is as low as 6.25%, that is about 83 million people paying taxes for a population of 1.32 billion. So Indian government is constantly working on developing a tax culture alongside developing the infrastructure and aiding its citizens with better facilities.
Income Tax Return in India
In India, the Income Tax Return (ITR) and its filing is governed by the Income Tax Act, 1961, and the Income Tax Rules. These Acts and Rules obligate the citizens of India to file their returns of the year with the Income Tax Department at the end of every financial year. Every eligible assessee has to fill up the Income Tax Return form that files the entire financial information of the individual to the Income Tax Department of India.
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Who is obligated to file the Income Tax Return?
If you fulfill any one of the following conditions, you are obligated to file your returns.
- NRI’s with income exceeding 2.5 lakh INR in FY earned in India and accrued in India.
- Foreign Companies taking treat benefit on a transaction in India
- Income derived from property or asset held under a charitable or religious trust, political parties, research institutions, educational or medical institutions, news and press agencies, hospital, infrastructural debt funds, any local authority, body, or trust.
- Signatory Authority or Residents in a foreign account (Not for NRI or RNOR)
- Resident Individual with assets or financial interest in an entity outside India (Not for NRI or RNOR)
- Those wanting to carry forward a loss under a head of income to the next year
- Those wanting to claim Income Tax Returns
- Companies or Firms in India irrespective of earning profits or incurring losses.
- People whose Gross Total Income exceeds 2.5 lakh INR, 3 lakh INR (for senior citizen), 5 lakh INR (for super senior citizen) before any ITR deductions.
Due Dates For Filing Income Tax Return
July 31 | Firm or Individuals not liable for audit |
September 30 | Company or Individual liable for audit |
March 31 | All Firms and Individuals filing belated returns |
How to file Income Tax Returns Online?
To file an IT tax return, collect all documents such as bank statements, last year’s tax returns, and Form 16.
Log in to www.incometaxindiaefiling.gov.in
- Register with the website using the PAN number. It will be your ID.
- Form 26AS should be viewed. It shows the tax deducted by the employer.
- The TDS on Form 16 should reflect this amount.
- Please download the applicable ITR form. If you don’t know the correct format, please consult the table below.
- Please fill in the required information and fill out the entire form before submitting it.
- Click the Calculate Tax button to see your outstanding amount.
- If applicable, pay the required tax.
- Enter the challan details on the tax return section of the form.
Which Income Tax Return form to file?
Income Tax Return Form Name | Applicability |
ITR-1 or Sahaj | For Individuals whose annual income is less than Rs.50 lakh via pension or salary. Also, this should be from only one house property. |
ITR-2 | For the shareholders of private companies, Directors of Companies, Non-Resident Indians (NRIs), or individuals whose income is sourced via capital gains, from two or more house properties, and from foreign entities. The income of this individual must be more than Rs.50 lakh. |
ITR-3 | For the individuals who run a proprietorship or are professionals in India. |
ITR-4 or Sugam | For Individuals who are under the presumptive taxation scheme. In order for individuals to join the scheme, these individuals' income must be less than Rs.50 lakh from professional income or less than Rs.2 crore from business income. |
ITR-5 | For the association and body of individuals, Limited Liability Partnerships (LLPs), and partnership firms to report their income and tax computation. |
ITR-6 | For companies registered in India |
ITR-7 | For entities claiming an exemption such as universities or colleges, scientific research institutions, political parties, and religious or charitable trusts. |
Penalty for the late filing of Income Tax Return
If you do not file your tax return by the due date, then, as a taxpayer you will be subject to a large fine. In addition to the penalties, there may be other inconveniences and consequences that you may be subjected to face if the statement is not submitted on time.
Depending on when the tax return is submitted after the due date, the individual is supposed to pay a sum ranging from Rs. 1,000 to Rs. 10,000. Apart from penalties, the taxpayers are eligible for receiving a refund. But late filing can cause delays in receiving these refunds. Taxpayers will also be required to pay interest of 1% of their outstanding balance if the tax return is not filed on time.
Due Date of Income Tax Return Filing | Penalty for Income below Rs.5 lakh | Penalty for Income above Rs.5 lakh |
Before 31 July | Nil | Nil |
From 1 September to 31 December | Rs.1,000 | Rs. 5,000 |
From 1 January to 31 March | Rs.1,000 | Rs.10,000 |
