What Is ITR?

Income Tax Return or ITR is a form used to show your gross taxable income for the given fiscal year. The form is used by taxpayers to formally declare their income, deductions claimed, exemptions and taxes paid. Therefore, it calculates your net income tax liability in a fiscal year According to the Income Tax Act of 1961, a person under 60 years of age must file tax returns if a part of their income is taxable. If your taxable income exceeds Rs. 5 lakh in a financial year or you have paid advance tax, you also need to file an ITR. When filing tax returns, you also have to pay your due taxes as decided by your applicable income tax slabs.

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Types of ITR Forms

There are nine different types of ITR forms which you can use during filing.

ITR 1 or Sahaj

ITR 1 or Sahaj is a form for those individuals who have income of up to Rs. 50 lakh from pension, salary, income from other sources and one house property. However, all salaried persons can not use this form to file taxes.

ITR 2

This form can be used by resident individuals or Hindu Undivided Families (HUF) who cannot file the ITR 1 or Sahaj form. However, if your income comes from a business or profession, then you cannot use ITR-2.

ITR 3

This form is for individuals or HUFs having income from proprietary business or profession. In short, Hindu Undivided Families or individuals who are ineligible for ITR 1, ITR 2, and ITR 4, can file ITR 3. Anyone receiving interest, bonus, salary or commission from a partnership firm as business income must also file ITR 3.

ITR-4 or Sugam

ITR 4 or Sugam is for all types of professions, businesses, HUFs and undertakings. You can file ITR-4 if your total income includes business or professional income u/s 44AD, 44ADA or 44AE, income from one house property, salary income, and income from other sources. However, you can not file this form if your income is more than Rs. 50 lakh in a financial year.

ITR 5

Co-operative societies, firms, Artificial Juridical Persons, Associations of Persons, local authorities, and Bodies of Individuals are eligible to file their income taxes with this form.

ITR 6

This form can be filed by any company only through online mode. Firms and organisations can use this form only if they are not claiming tax exemption under Section 11.

ITR 7

This form can be used only by political parties, religious or charitable trusts, colleges, universities, etc. to claim tax exemption.

How to File ITR Online

Follow these steps to file your Income Tax Return (ITR) online with ease:

Step 1: Register on the Income Tax Department's Website

1. Go to the Income Tax Department's website (eportal.incometax.gov.in).

2. Click "Register Yourself" and select "Individual" or "Other than Individual" as applicable.

3. Fill in the required details, including PAN, name, date of birth, and email address.

4. Verify your email address and mobile number through OTPs.

Step 2: Log in to Your Account

1. Log in to your account using your username and password.

2. Click on "e-File" and select "Income Tax Return" from the dropdown menu.

Step 3: Choose the Correct ITR Form

1. Select the correct ITR form (e.g., ITR-1, ITR-2) based on your income and eligibility.

2. Click "Continue" to proceed.

Step 4: Fill in Your Personal Details

1. Fill in your personal details, including name, PAN, date of birth, and address.

2. Verify your details and click "Save and Continue".

Step 5: Fill in Your Income Details

1. Fill in your income details, including salary, business income, capital gains, and other sources of income.

2. Claim deductions and exemptions as applicable.

3. Verify your income details and click "Save and Continue".

Step 6: Fill in Your Tax Details

1. Enter your tax details, including TDS, TCS, and advance tax paid.

2. Verify your tax details and click "Save and Continue".

Step 7: Review and Submit Your Return

1. Review your return carefully for accuracy and completeness.

2. Submit your return online and receive an acknowledgment receipt.

Step 8: Verify Your Return

1. Choose a verification method (e.g., Aadhaar OTP, net banking).

2. Verify within 30 days to process your return.

Step 9: Receive Your Refund (If Applicable)

1. If eligible, the refund will be processed and credited to your bank account.

2. Notifications will be sent via email and SMS.

How to File ITR?

Offline Process

Step 1: Obtain the ITR Form
1. Download the relevant ITR form (e.g., ITR-1, ITR-2, etc.) from the Income Tax Department's website or purchase a printed copy from a stationery store.
2. Ensure you have the correct form for your income and eligibility.
Step 2: Fill in the ITR Form
1. Fill in the ITR form carefully and accurately, using a black pen.
2. Ensure you provide all required information, including personal details, income, deductions, and taxes paid.
Step 3: Attach Supporting Documents
1. Attach supporting documents, such as:
- Proof of income (e.g., salary slips, Form 16)
- Proof of deductions (e.g., medical bills, charitable donations)
- Proof of taxes paid (e.g., challans, TDS certificates)
2. Ensure all documents are self-attested and in the correct format.
Step 4: Submit the ITR Form
1. Submit the completed ITR form, along with supporting documents, to the Income Tax Office or a designated Tax Return Preparer (TRP).
2. Ensure you receive an acknowledgement receipt with a unique submission ID.
Step 5: Verify Your Return (Optional)
1. If you want to verify your return, you can do so by:
- Sending a signed copy of the ITR-V form to the CPC, Bengaluru
- Verifying through Aadhaar OTP or EVC
2. Verify your return within 30 days of submission.
Step 6: Receive Your Refund (If Applicable)
1. If you're eligible for a refund, it will be processed and credited to your bank account.
2. Receive an email and SMS notification when your refund is processed.

Documents Required to File ITR

The most important documents you need in hand when filing your ITR:

Form-16:

It is a TDS certificate which is issued by your employer when the TDS is deducted from your salary. It has two parts including Part A containing the employer's and employee's details, including the name and address, Permanent Account Number (PAN), and TDS details. Part B includes the details of salary paid, exemptions allowed, deductions claimed, and tax payable on the employee's income

Bank/Post Office Interest Certificate

As per the Income Tax Act, interest earned from post office savings accounts, savings bank accounts, recurring deposits and fixed deposits are taxable. So, you need to provide the break-up of the interest received from different sources.

Form-16A and Other TDS Certificates:

Form 16A is a Tax Deduction at Source (TDS) certificate issued by deductors to deductees, certifying the amount of tax deducted on income other than salary, such as interest, rent, and freelance work. It contains details of the deductor, deductee, income, and tax deducted, and is typically issued quarterly. Form 16A serves as proof of TDS and is essential for filing income tax returns (ITR) and claiming TDS credits.

Annual Information Statement (AIS):

The Annual Information Statement (AIS) is a comprehensive statement provided by the Income Tax Department, containing details of a taxpayer's financial transactions, income, and tax-related information for a particular financial year. AIS includes information such as interest, dividend, capital gains, and other income, as well as details of tax deducted at source (TDS), tax collected at source (TCS), and advance tax payments. The AIS aims to facilitate accurate and efficient tax filing by providing taxpayers with a single, consolidated view of their financial information

Form 26AS:

Form 26AS is a tax credit statement that displays details of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) for a taxpayer, helping in accurate income tax return (ITR) filing and claiming tax credits.

Proof of Investment and Expenditure:

You should keep documents like deposit certificates, demat account statements, investment receipts, etc., as investment and expenditure proofs.

Capital Gains:

If you have investments in shares, mutual funds debentures and property and your realised gains are more than Rs. 1 lakh in a financial year, it is taxable under Long Term Capital Gains. So it is important to prepare the relevant document to show your capital gains income.

Details of Foreign Assets:

You must mention all the assets you hold in any foreign country, including bank accounts, property and so on in your ITR.

Aadhaar number:

As per Section 139AA of the Income-tax Act, 1961, it is mandatory to mention your Aadhaar card number in your ITR.

Bank Account Details:

You have to mention the account number, bank name, account type and IFSC code of all the bank accounts you own. It is required even if you have closed your account in the middle of the financial year.

How to check ITR Status and download ITR Form, Acknowledgment Receipt, ITR Verification Form

Follow these steps to check your ITR status and download the relevant documents:

Step 1: Login to e-filing portal using user ID (PAN) and Password.

Step 2: Go to e-file > Income Tax Return > View Filed Returns.
Step 3: Now, the View Filed Returns page is displayed. You may download the complete ITR Form, ITR Receipt (Acknowledgment Receipt), Uploaded JSON, and the Intimation Order using the button available on the View ITR Status Screen.
Step 4: Alternatively, you can view the ITR by the Filter option by selecting AY and the Filing Type.
Step 5: If you want to view the lifecycle of the ITR filed, click on the View Details button.
Step 6: Here, you can view the Life Cycle of ITR Filed.

Filing Options and Tax Regimes for Individuals

Follow these guidelines to choose between the old and new tax regimes and understand when to switch between them:

Choose the Old Tax Regime if:

• You have significant deductions (e.g., life insurance, home loan interest, PPF, etc.) that can reduce your taxable income.
• You prefer engaging in tax planning and maximizing exemptions.
• You earn enough to benefit from deductions and exemptions that outweigh the higher tax rates.

Choose the New Tax Regime if:

• You do not have many deductions or exemptions to claim.
• You prefer a simpler tax filing process without the need for maintaining records for exemptions.
• You prefer lower tax rates and want to avoid complicated tax planning.

Switching between Old Tax Regime & New Tax Regime:

• Once you opt for the New Regime, you cannot claim exemptions and deductions except for a few like NPS contributions. If you want to switch between the two regimes, you can do so during the next assessment year.
• Salaried individuals and pensioners can switch between the two regimes every year. However, if you are a business taxpayer, switching requires more careful consideration and the submission of specific forms (e.g., Form 10-IE).

Filing your Income Tax Return (ITR) is an essential activity for several reasons, beyond just meeting legal requirements. Here are some of the key reasons why you should file your ITR:

Filing your Income Tax Return (ITR) is important for various legal and financial reasons. Here are the main benefits:

1. Legal Requirement

• Mandatory for Higher Income: If your income exceeds the prescribed taxable limit, filing an ITR is mandatory under the Income Tax Act. Failing to file your returns can lead to penalties and legal action.
• Avoid Penalties: Not filing your ITR on time attracts penalties and interest on unpaid taxes. The penalty for late filing can range from ₹1,000 to ₹5,000 depending on the period of delay and the income level.

2. Claim Tax Refund

• If excess tax has been deducted (TDS) or you have paid more advance tax than required, filing an ITR allows you to claim a tax refund. Without filing your ITR, you cannot receive your refund.

3. Carry Forward Losses

• Filing your ITR is necessary to carry forward losses like capital losses or business losses to future years. These losses can be set off against income in future years, reducing your tax liability in those years.

4. Proof of Income

• An ITR serves as an official document that provides proof of income. This can be important when applying for loans, credit cards, or any other financial products. Financial institutions often require a copy of your ITR as part of their application process.

5. To Avoid Legal Complications

• If you do not file your ITR and the tax authorities issue a notice, it can lead to legal issues and audits. It can also affect your financial reputation, as unfiled returns might raise suspicion regarding your income sources.

6. Loans and Mortgages

• Banks and financial institutions usually ask for ITR returns for the past few years when you apply for loans such as a home loan, car loan, or even a personal loan. Filing your ITR helps demonstrate your ability to repay the loan.

7. For Property Transactions

• Property transactions often require proof of ITR for the last 2-3 years. If you are buying or selling property, the tax department may ask you to produce your tax returns.

8. Easier Visa Applications

• Many countries require proof of income for visa applications, and filing your ITR ensures you have this document. It is also a key requirement for student visa applications, as it proves your financial capability to support your stay.

9. Contribute to Nation-Building

• Filing taxes is a social responsibility that helps the government generate the funds required for public welfare and infrastructure development. By paying taxes, you contribute to nation-building.

10. It’s a Step Towards Financial Discipline

• Filing your ITR on time helps you keep track of your income, expenses, and savings, which is a good practice for financial planning. It encourages better financial discipline and ensures that you comply with tax laws.

11. For Social Security and Benefits

• Filing ITR ensures that you are entitled to certain government benefits such as pensions, healthcare schemes, and other welfare benefits, especially if they require proof of income.

12. Tax Planning

• By filing ITR, you can avail various tax-saving options under different sections like 80C (investments in PPF, life insurance, etc.), 80D (health insurance premiums), and more, which can help reduce your overall taxable income.

13. Reputation and Credibility

• Filing ITR regularly helps build a positive financial reputation. It shows that you are responsible and law-abiding, which may be helpful in professional or business dealings.

14. Avoid Prosecution

• Non-filing of ITR can result in a prosecution under the Income Tax Act, which can involve both monetary penalties and imprisonment, depending on the severity.

What are the Advantages of filing Income tax return?

1. Claim Tax Refunds
• If taxes were withheld from your income (e.g., through TDS in India or federal withholding in the U.S.), filing a return ensures you can claim a refund if your total income is below the taxable limit.

2. Avoid Penalties
• Filing on time helps avoid penalties or interest that may be levied for non-compliance with tax laws, even if no tax is due.

3. Establish Financial Documentation
• Tax returns are vital proof of income and financial health. They are often required:
    o For Loan Applications: Banks and financial institutions request them to assess repayment capacity.
    o For Visa Processing: Many countries require recent tax returns as part of their visa application process.
    o For Renting Property: Landlords may request tax returns for tenant verification.

4. Carry Forward Losses
• If you have incurred capital or business losses, filing a return allows you to carry forward these losses to offset future gains, reducing your future tax liability.

5. Eligibility for Government Programs
• Many government welfare schemes and subsidies require tax return proof to determine eligibility (e.g., scholarships, housing benefits, or health schemes).

6. Build a Legal Record
• Filing tax returns creates a documented record of your earnings and compliance with the law, which can protect you during audits or legal disputes.

7. Encourage Financial Discipline
• Preparing and filing a return helps you review your financials, track savings and investments, and plan for future tax optimization.

8. Promote Good Citizenship
• Paying taxes and filing returns contribute to national development by funding public services like infrastructure, healthcare, and education.

9. Avoid Future Scrutiny
• Not filing a return, even when legally not required, can raise red flags with tax authorities if your financial activity suggests higher income levels. Filing ensures transparency.

Due Dates for Filing ITR

Go through this table to learn a brief about the due dates for ITR filing:

Category of Taxpayer	Due Date for Tax Filing - AY
Individual / HUF / AOP / BOI (where audits are not required)	31st July AY
Businesses (requiring audit)	31st October AY
Businesses requiring transfer pricing reports	30th November AY
Revised return	31-Dec AY
Belated return	31-Dec AY

Penalty for Late Filing of ITR

Failing to pay your income tax within the due date will impose an income tax penalty against you. Other than penalties, the income tax department can take legal action against you if you continuously miss the deadlines. So be responsible in terms of income tax filing. These are the due dates and penalty amount for missing the deadlines:

Due Date of ITR Filing	Penalty for Income below Rs. 5 lakh	Penalty for Income above Rs. 5 lakh
Before 31 July	Nil	Nil
From 1 January to 31 March	Rs. 1,000	Rs. 10,000

Conclusion

Income Tax Return is very important to contribute to nation-building. Additionally, it helps to claim TDS refunds, makes your loan applications easier to process, and helps you to carry forward any losses. You also need to file an ITR to claim deductions and exemptions under the Income Tax Act, 1961.

At Accountants Factory LLP, we simplify the complexities of Income Tax Return (ITR) filing for individuals, businesses, and corporates. From optimizing deductions and exemptions to ensuring compliance with deadlines, our expert team provides tailored solutions for accurate and hassle-free tax filing. Whether you’re a salaried individual, a business owner, or an NRI, we handle everything from documentation to liaising with the Income Tax Department. With our technology-driven approach, transparent pricing, and end-to-end support, you can focus on growth while we manage your taxation needs efficiently. Partner with us to make tax filing seamless and stress-free!

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