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Detailed Guide to ITR
An income tax return (ITR) is a form used to file an individual's net tax liability from the taxable income. It is submitted to the Income Tax D…

An income tax return (ITR) is a form used to file an individual's net tax liability from the taxable income. It is submitted to the Income Tax Department by Firms and companies, self-employed and salaried individuals, and HUFs (Hindu Undivided Families) who earn a taxable income in a particular financial year.

Who are eligible to file ITR?

ITRs must be filed by individuals, Hindu Undivided Families (HUFs), businesses, and other entities whose income exceeds the threshold amounts allowed by the tax authorities. Depending on the type of taxpayer and their age, different threshold restrictions apply, such as :

  • An individual's sales turnover in their business exceeds Rs.60 lakh.
  • An individual's professional income crosses Rs. 10 lakh.
  • A person who deposits at least Rs.50 lakh in one or more savings account
  • TDS or TCS exceeds Rs.25,000 for a year
  • TDS or TCS is Rs.50,000 or higher for senior citizens
  • Resident individuals having an income from foreign sources
  • A person who has deposited an amount more than Rs.1 crore in one or more current accounts in a bank
  • An individual who paid an electricity bill exceeding Rs.1 lakh
  • An individual who spends more than Rs.12 lakhs in foreign country travel
  • A person's income exceeding the exemption threshold to qualify for capital gains tax break.

Types of ITR Forms

Depending on the type of taxpayer and the nature of the income, the income tax department offers different ITR form types. The types of ITR forms include ITR-1 (Sahaj), ITR-2, ITR-3, ITR-4 (Sugam), ITR-5, ITR-6 and ITR-7.

Deduction on Taxable income

Suppose an individual has taxable income from various sources, including a salary, a business or profession, house property, capital gains, and other income. In that case, they are required to file an ITR. It is also possible for the individual to reduce their tax liability by claiming deductions under several sections of the Income Tax Act, such as Section 80C, Section 80D, Section 80G, etc.

Documents Required to File ITR

  • PAN Card
  • Form 16
  • Bank Account Details
  • Aadhaar Number
  • Form 26AS
  • Proof of Tax saving investment
  • Challan of any advance tax if paid during the year

Due date for filing the ITR form

The deadline by which an individual should submit their ITR depends on the type of taxpayer and the sources of income. In most cases, the due date is the 31st of July of the assessment year. In some circumstances, the tax authorities may decide to extend the deadline.

Mode of Filing

ITR can be filed online through the Income Tax Department's e-filing portal. One must register on the portal, choose the appropriate ITR form, fill in the required details, and upload the return online. ITR files can also be submitted offline by downloading the ITR form from the website, filling in the details, and submitting it online to the nearest Income Tax office through the Income tax portal.

Penalties for not filing ITR

The repercussions of not filing an Income Tax Return will empty your pocket much more than what your actual tax could have.
You have to pay a penalty of up to Rs.10,000, late fees, and interest of 1% per month until the month in which you will finally pay the dues.
You will also be restricted from claiming certain tax deductions. In worst cases, when income tax authorities think that you are evading taxes, they can impose a fine under 270A for underreporting of income. You might be subject to prosecution under Section 276CC, which leads to the imprisonment of a minimum of 3 months and a maximum of 2 years, along with a fine based on the amount of income tax evaded.
Hence, it is essential to submit your income tax returns on time; otherwise, the penalties and added interest could overburden you.

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