Income Tax Returns

What is an Income Tax Return (ITR)?

Income Tax Return (ITR) is a form that an individual submits to the Income Tax Department of India to file information about his income and taxes payable during that year. Information filed in an ITR should be applicable for a particular financial year between 1st April to 31st March of the next year.

The income you earn can be from sources such as salary, profit in business, sale of house or property, dividend or capital gains, and interest received among others. If you have paid tax in excess during a year, you will get a refund by the Income Tax Department.

Who is Required to File ITR?

Now that you know what an income tax return is, let us take a look at the list of people as well as enterprises that are mandated by law to file income tax returns every financial year.
Any individual who is less than 59 years and has an annual income of more than ₹2.5 Lakhs should file an IT. The exemption limit for senior citizens between 60 to 70 years of age is ₹3 Lakhs. For super senior citizens (80 years and above), the limit is ₹5 Lakhs. Income calculation should be done without allowing deductions specified under Section 10 of the Income Tax Act.

A registered company with yearly income, even if it has not made any profit during the period
An individual who wants to claim a refund on surplus income tax or tax that was deducted from the annual income.
An individual having an asset or any other financial interest outside of the country.
A company out of India with treaty benefits on transactions made within the country.
NRIs who earn above the basic yearly exemption limit of ₹ 2.5lakh.

What Documents do you Need to File ITR?

When you start the process of filing your income tax return, apart from your salary slips, bank savings account passbook, Aadhar card, and PAN card, there are a few other documents that you will require to ease your tax filing process:
Form 16: It is provided by your employer and contains details of the salary they paid you and the Tax deducted at source (TDS).
Form 16A: It contains details on TDS deducted on interest received from deposits such as fixed or recurring bank deposits.
Form 16B: If you sell a property, TDS applies on the amount received from you by the buyer, the details of which are present in this form.
Form 16C: TDS details of the rent paid by your tenant to you are recorded here.
Form 26AS: This form represents your comprehensive statement of taxes against the PAN number. It includes TDS by your employer, bank, or any other organisation that has paid you. Advance taxes or self-assessment taxes paid, as well as proof of tax saving investments such as deductions as prescribed from Section 80C to 80U, including a life insurance policy or a term plan, are also listed.

How to File ITR Online?

You can now submit your tax return sitting at home if you have an internet connection. This has been made possible by e-filing, which uses pre-approved tax preparation software by the Income Tax Department. More and more taxpayers are increasingly filing their returns online given its benefits such as:

Getting Refund: If tax has been deducted at source from the payment you received and you want to claim a refund of the amount, you need to furnish your ITR for the financial year for the refund to be processed.

Verification Proof: When you apply for a loan, your eligibility is measured using your yearly income as the yardstick. An income tax return filing form with details of your earnings gives the borrower a clear picture of your previous income, lending credibility to your application. Similarly, visa applications also require income proofs, for which tax returns are the most accepted documents.

Proof of Income: When you buy a term plan, your insurer might require your ITR to decide the compensatory amount to be paid to your nominees in the event of death or disability. The ITR is considered officially verifiable proof of income for this purpose.