INCOME TAX RETURNS
INCOME TAX RETURNS
If you are a businessman or salaried person or whatever, if you are earning an excess amount in the way of various types of income, you are liable to pay a part of income as a tax to the government. This will help to achieve various benefits from the government. In this article we can discuss the filing of Income tax returns.
Basically, The Income Tax which plays a major role in the contributions that you pay to the government based on the money that you earn. It became one of the main sources for the country’s economic development. Mostly the tax level should be vary based on the business and the money you earned.
The income tax plays a major role in the county’s economic and financial growth by levying the tax to the individual’s income. Those collected tax should be used for various needs and benefits for the country.
Eg : if you have earned high income the rate of tax may be higher and if you earned low income the tax rate may be less.
INCOME TAX RETURNS (ITR) :
Income Tax returns is a form that is used to file the information about the income and pay the tax to the Government or the Income tax department. Generally the liability of the tax should be calculated by the earned income.
As per the Income Tax Act 1961, It is compulsory to file the income tax returns, if the income is more than the basic exemption limit as prescribed laws and regulations, the returns must be filed by every year by an individuals, if the individuals earns the income during the financial year more than the minimum exemptions, then he should pay the tax for the income to the government.
The income earned should be in the form of Salary, Capital gains, Income from any house property, Interest, business profits and any other source of Incomes should be calculated.
Basically, A person should file the income tax returns before the specified date which is prescribed under the act. If the taxpayer fails to pay the tax on time, he shall be subjected to pay a penalty for the late filings.
WHO CAN FILE INCOME TAX RETURNS ?
According to the Income Tax Act the income tax should be paid only by the individuals or the businesses who earn the income that exceeds the prescribed limit.
According to the Income Tax Act the income tax should be paid only by the individuals or the businesses who earn the income that exceeds the prescribed limit.
- Every individuals upto the age of 59 years and the income for the financial year which exceeds the limit of 2.5 lakhs, As well as for the senior citizens, whose age is in between 60 to 79 age who receives the income of 3 lakhs and The Supersenior citizen, age category of 80 and above, who receives the income up to the limit of 5 lakhs or above shall be liable to pay the income tax to the government.
- All registered companies shall be liable to pay the income tax for the profit making in the financial year.
- Those who claimed the refund on the excess tax deductions shall compulsorily pay the Income tax returns.
- The Foreign Companies who made the transactions in India for Treaty benefits should pay the Income Tax in India.
- As well as the individual who have movable or immovable assets outside India shall come under this Act.
- Non Residential Individual who earns more than the 2.5 lakhs in one financial year shall be liable for the Income tax filings.
BENEFITS OF FILING INCOME TAX RETURNS :
There are certain benefits that are availed to the person who pays the Income Tax on Time.
- Fast approvals of Loans : Filing ITR on time will help you to avail easy instanius approval of certain loans such as home loan and vehicle loans. Most of the bank verifies the tax returns for your income proof statements. This will help the banker to sanction a loan for you very quickly.
- Funding for Startups : If you are planning to initiate a company business or maintain the existing business, you might need the funding from outsiders such as ventures for capitals or the investors for developing the company. For that verification your ITR report which will help to evaluate the business financial stability and profitability by checking the reports.
- Act as proof for your address : ITR serves as an address proof for an individual for any governmental approvals it can act as a proof address for any verifications such as Visa, Passports etc.
- Evidence for Your Earnings : Form16 which typically acts as the evidence for your earnings and acts as a proof for the actual verification of Income which you earned.
These are the some important benefits of filing the IT returns.
TYPES OF ITR FORMS :
Totally Eight different forms which are used to file the Income Tax returns Based on the activity. Those are,
A. ITR 1 OR SAHAJ FORM :
For mainly, this form is used to file the ITR for the individuals whose income is up to Rs. 50 lakhs from pension, Salary, income from other sources and one house. All the salaried person shall not use this form for the Income tax filings.
B. ITR 2 :
These forms shall be used for the residential individuals or the HUF who cannot file ITR 1 form.
If the income is made by your business or professions, this should not apply for you.
C. ITR 2A :
This form is newly launched for filing ITR to the individuals and HUF who have more than one house property without having any capital gains income and have salary income. If you have been in the Long Term capital gains and if you pay the Security Transaction Tax, you should use this form to file.
D. ITR 3 :
This form is used for the individuals or HUF who have the income from the proprietary businesses or the professions. In short the Hindu undivided Family or an Individuals who are ineligible for ITR 1, ITR 2 and ITR 4 shall file the ITR 3.
As well as, anyone who receives interests, salary, commissions from the partnership’s ferns can also use this form to file the ITR.
E. ITR 4 OR SUGAM :
ITR4 or Sugam Form is used for all types of professions, businesses, HUF and Undertakings. You can file ITR 4, if the total income which is included with the professional or the business incomes under section 44AD, 44ADA, 44AE of the Income Tax Act, Which the income availed from one house property, Salary income, and Income from other sources.
If your total income exceeds the limit Rs. 50 lakhs in the financial year this form should be applicable for you.
F. ITR 5 :
ITR 5 is used to file for LLP (Limited Liability Partnership), Firms, investment funds, business trusts, Local authorities, Artificial judicial persons, and body of individuals are eligible to file income tax returns by using this specified form.
G. ITR 6 :
This form can be used to file ITR by online mode for any company.
Firms and the organisations can be using this form, if they are not claiming tax exemptions under section 11.
H. ITR 7 :
These forms should be only used by the political parties, religious or charitable trusts, colleges, universities etc, for claiming the tax exemptions.
DOCUMENTS REQUIRED FOR THE FILINGS OF INCOME TAX RETURNS :
The certain important documents that are necessary for filing the Income Tax returns,
- PAN card
- Identity Proof such as Aadhar card, Voter ID
- Bank Account Statement of the financial year
- Proofs of the capital gains
- Salary slips
- Form 16 (TDS Certificate from employer)
- Interest certificate from Banks and Post Office
- Tax saving investment proofs.
DUE DATES FOR FILING ITR :
The Due dates for filing the Income Tax Returns are,
TAXPAYERS | DUE DATES FOR ITR FILING (FY 2023 TO 2024) |
Individuals, Hindu Undivided Family, Associate of Person (Auditing not required) | 31st july 2024 |
Businesses ( Auditing requires) | 31st October 2024 |
Business required the transfer pricing reports | 30th November 2024 |
Revised return | 31 st December 2024 |
Belated return | 31 st December 2024 |
PENALTY FOR LATE FILING :
If the taxpayer fails to pay the tax on time will be liable to pay penalties for the late filings. If you are continuously missing the deadlines of the due date for filing ITR will take an immediate action. The certain missed due date for filing the ITR are,
Due date of ITR filings | Penalty for Income below Rs.5 Lakhs | Penalty for Income Above Rs.5 Lakhs |
Before 31st july | Nil | Nil |
From 1st September to 31st December | Rs. 1000 | Rs. 5000 |
From 1 January to 31 March | Rs. 1000 | Rs. 10000 |
FAQ
FAQ ON INCOME TAX RETURNS :
1. Is it mandatory to file Income Tax Returns ?
Yes, it is mandatory to file the ITR if your income exceeds the threshold as prescribed under the Income Tax Act.
2. Trusts and societies need to file income tax returns ?
No, The ITR 7 Form was used by the political parties, religious or charitable trusts, colleges, universities etc, for claiming the tax exemptions. So the trust and society can claim exemption from the income tax report.
3. Who can file Income Tax Returns ?
Every individuals upto the age of 59 years and the income for the financial year which exceeds the limit of 2.5 lakhs, As well as for the senior citizens, whose age is in between 60 to 79 age who receives the income of 3 lakhs and The Supersenior citizen, age category of 80 and above, who receives the income up to the limit of 5 lakhs or above shall be liable to pay the income tax to the government.
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