Updated on: 17 July 2023
Published on: 29 June 2023
An income tax return or ITR is an essential form that you, as a taxpayer, need to file when declaring your income details and the applicable tax information to the IT Department. According to the Income Tax Act of 1961, all individuals, companies, HUFs, association of persons, etc., needs to pay tax depending on the income they earn.
As an Indian resident, you are bound to follow tax regulations based on the total income you earn in a specific financial year starting on the 1st of April and ending on the 31st of March of the next year. However, there are certain rules you need to abide by when filing an ITR.
For a brief overview of what is ITR and the process of filing income tax returns in India, read on.
As a taxpaying citizen of the country, you need to submit an income tax return to the Income Tax Department. This form lists the income you generate during a particular financial year. The income you have earned may include the following:
You need to file these particulars in a clear and concise manner and declare the same to the IT Department. That said, there are specific forms to be used when filing an income tax return in India. The IT Department has categorised the applicability of these forms based on parameters, such as:
It is important to file your income tax returns on or before the due date. But before that, you need to understand the 7 different forms for filing income tax returns.
To date, the IT Department has notified the following forms that a taxpayer can use for filing income tax returns. Here are the seven different forms:
Here’s a brief description of each form to help you understand them better:
This form is suitable for all resident individuals earning an income of less than ₹50 lacs. You can generate this income from your pension, salary, one property or other sources like winning lotteries or horse races.
Any income generated above ₹50 lacs needs to be filed using this form. All your capital gains, income earned from more than one property, foreign or even crypto income needs to be declared using Form ITR-2.
Generally, all HUFs and individuals are eligible to file ITR-2 if ITR-1 does not apply to them and if they do not have any income gained from business or profits.
This form has to be filed by individuals and HUFs generating income from the gains and profits earned in a profession or business.
This is applicable for HUFs, resident individuals and all firms (excluding LLPs) who are earning income up to ₹50 lacs along with income generated from profession or business.
This form is applicable to LLPs (Limited Liability Partnerships), BOIs (Body of Individuals) and AOPs (Association of Persons).
All companies not claiming any exemption under Section 11 needs to file this form for income tax returns.
All companies and individuals included under specific sections must file their returns using this form. The categories include Section 139(4A), Section 139(4B), Section 139(4C) and Section 139(4D).
Filing an ITR in India is critical if the income you earn during a financial year is higher than the basic exemption limit. When you delay filing your tax returns, it can attract penalties and affect your chances for visa or loan approvals. So, ensure you file your returns with due diligence well before the timeline.
Here are a few conditions applicable for filing an ITR:
The aforementioned conditions are a few of the reasons why filing an ITR is mandatory. You can file your returns in paper format or furnish them electronically using a digital signature. You can also transmit the data electronically using an electronic verification code. Another option is to transmit it electronically and then submit verification of the returns filed using a Return Form ITR-V.
As mentioned, filing an ITR is mandatory for various reasons, one of them being to avail a loan. If you are looking for a one-stop solution to meet your financial needs, you’re at the right place! With Fibe, you can get an instant online personal loan of up to ₹5 lacs in just 2 minutes.
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All individuals and businesses in India need to file ITR if their gross annual income is higher than the basic exemption limit.
There are 7 different types of income tax returns based on the category, income earned and source of income of a particular taxpayer.
Filing your ITR helps you claim tax refunds from the IT Department, if applicable. It also helps you record your total earnings generated during a financial year.
If you don’t file ITR, you may have to pay penalties. Also, it may delay your visa or loan approval process.
You can file your returns in paper format or furnish them electronically using a digital signature or an electronic verification code. You can visit the official Income Tax e-filing portal to do so. Another option is to transmit it electronically and then submit the verification of the returns filed using a Return Form ITR-V.
There is no difference between the two, as ITR is an acronym for Income Tax Returns.
All Indian residents earning a total income above the basic exemption limit are eligible to file income returns.
Yes, it is mandatory to file ITR if you are earning income that crosses over the exemption limit.
As per the new regime, you need not pay any tax for a total income of up to ₹3 lacs. However, if you are earning income above ₹3 lacs and below ₹5 lacs, you have to you’re your returns.
Category : Tax
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