Ashish Garg & Associates ITR Filing

ITR Filing

Income Tax Return (ITR) Filing

Who Needs to e-File an Income Tax Return?

Income Tax Return (ITR) filing is mandatory for individuals, businesses, and other entities whose income exceeds the basic exemption limit as prescribed by the Income Tax Act, 1961. Even if the income is below the threshold, filing may be required in certain cases, such as for individuals wishing to claim refunds, carry forward losses, or fulfill compliance requirements for foreign investments, etc.

Individuals and entities required to file ITR include:

  1. Individuals with an income exceeding the basic exemption limit.
  2. Hindu Undivided Families (HUFs) whose income is above the exemption limit.
  3. Companies (both domestic and foreign) are always required to file.
  4. Firms, LLPs, and trusts who have earned income exceeding the exemption limit.
  5. Non-Residents who have income from Indian sources.

Eligibility for Income Tax Filing

  • Individuals whose annual income exceeds the exemption limit (Rs. 2.5 lakh for individuals below 60 years, Rs. 3 lakh for senior citizens aged 60-80, and Rs. 5 lakh for super senior citizens aged 80 and above).
  • Salaried individuals who wish to claim deductions like 80C, 80D, or other exemptions.
  • Business owners and professionals who have taxable income.
  • Investors who need to report capital gains, dividend income, or other earnings.
  • Non-residents with income from Indian sources.
  • Individuals who have received a notice from the Income Tax Department to file their returns.

Income Tax Return Forms in India

There are several ITR forms for various categories of taxpayers, based on their source of income and other criteria:

  1. ITR-1 (Sahaj): For individuals earning income from salary, one house property, and other sources (interest, etc.), with total income up to Rs. 50 lakh.
  2. ITR-2: For individuals and Hindu Undivided Families (HUFs) not having income from business or profession but earning income from other sources, including capital gains and foreign income.
  3. ITR-3: For individuals and HUFs having income from business or profession.
  4. ITR-4 (Sugam): For individuals, HUFs, and firms (other than LLPs) with presumptive income from business or profession under section 44AD, 44ADA, and 44AE.
  5. ITR-5: For firms, LLPs, and other entities like AOPs (Association of Persons), BOIs (Bodies of Individuals), and cooperatives.
  6. ITR-6: For companies (other than those claiming exemption under section 11).
  7. ITR-7: For persons including companies required to file returns under section 139(4A), 139(4B), 139(4C), or 139(4D) (charitable/religious trust, political parties, etc.).

Due Date for ITR Filing

  • For Individuals and HUFs (with no audit requirement): The due date is 31st July of the assessment year (for example, for FY 2024-25, the due date is July 31, 2025).
  • For Businesses and Professionals (requiring audit): The due date is 30th September of the assessment year.
  • For Companies: The due date is 30th September of the assessment year.
  • For Taxpayers needing to submit audit reports: The due date is typically extended, but the general rule remains 30th September.

Advantages of Income Tax e-Filing

  1. Convenience: e-Filing can be done from anywhere at any time, without the need to visit any office.
  2. Faster Processing: The processing of tax returns is quicker, and refunds are issued faster compared to manual filing.
  3. Error-Free: The system automatically checks for errors in the forms, minimizing mistakes and delays.
  4. Time-Saving: e-Filing saves time compared to the manual filing process, and forms are directly uploaded to the Income Tax Department’s database.
  5. Transparency: You can track the status of your return and refund.
  6. Paperless: No need for physical documentation, reducing paper usage and promoting eco-friendliness.
  7. Availability of Tax Calculators: The e-Filing portal offers built-in calculators to assist in accurate computation.

Documents Required for ITR e-Filing

  1. PAN Card: A copy of your Permanent Account Number card.
  2. Aadhaar Card: For linking your Aadhaar with the tax filing.
  3. Salary Slips/Salary Certificate: For salaried individuals.
  4. Form 16: Issued by the employer to summarize salary and tax deducted.
  5. Bank Statements: For income from interest, savings, etc.
  6. Investment Details: Details of tax-saving investments, such as insurance premiums, PPF, EPF, NPS contributions.
  7. Capital Gains: Information on investments in stocks, bonds, and other securities.
  8. Loan Interest Payments: Proof of interest paid on home loans or education loans.
  9. TDS Certificate: Form 16A or 16B, for tax deducted at source.
  10. Details of other income: Rental income, business income, or other sources.
  11. Tax Paid Details: Advance tax or self-assessment tax payment receipts.
  12. Deductions: Documenting deductions under sections 80C, 80D, etc.

Penalty for Late Filing Income Tax Returns

  • If filed after the due date but before December 31: A penalty of Rs. 5,000 may be levied.
  • If filed after December 31 but before March 31: A penalty of Rs. 10,000 may be levied.
  • For small taxpayers (with income less than Rs. 5 lakh): The penalty is reduced to Rs. 1,000 if filed after the due date.
  • Interest: If tax is payable and the return is filed after the due date, interest under section 234A will be levied at 1% per month or part of the month on the outstanding tax amount.

Steps to Take If You Miss the ITR Filing Deadline

  1. File the Return as Soon as Possible: You can still file the return after the due date, but a penalty may apply. This can be done by filing a Belated Return (ITR-1 to ITR-7) before December 31 of the assessment year.
  2. Pay the Tax Due: Ensure that the tax due, along with interest and penalties, is paid at the time of filing.
  3. File an Updated Return: If there’s an error in the filed return, you can file an updated return within 12 months from the end of the assessment year to rectify mistakes.

Common Mistakes While e-Filing Income Tax

  1. Incorrect PAN or Aadhaar Details: Ensure that PAN and Aadhaar details are correctly entered.
  2. Mismatch in Income: Ensure the total income reported matches with the Form 16 or Form 26AS.
  3. Wrong Tax Deductions: Double-check the deductions claimed under various sections like 80C, 80D, etc.
  4. Skipping to File Tax Audit: Businesses that require an audit but fail to file the audit report on time may face penalties.
  5. Filing Incorrect Form: Choose the correct ITR form based on your income sources to avoid rejection.
  6. Incorrect Bank Details: Provide accurate bank account information for direct deposit of refunds.
  7. Not Filing After TDS: Even if TDS is deducted, you must still file an ITR to ensure accurate credit of taxes paid.
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