Income tax is a tax levied on the annual income earned in a financial year by an individual or business. An Income Tax Return (ITR) is a necessary document that one needs to file to the Income Tax Department or revenue authorities to inform them about your income, investments, and tax payable for a specific fiscal year. Simply put, a tax return is a form that is filed with the IT Department or revenue authorities to report income expenses, deductions, and so on.
ITR Filing is a mandatory process for individuals as well as businesses every year. Considering the importance of filing ITR and the steps involved in it, the government has transitioned the whole process; from cumbersome offline to smooth online. It allows taxpayers to simply file their tax return without any time/location boundation as whether you are at your office or home, you can file ITR with the help of an active internet connection. Filing income tax returns India offers numerous benefits to taxpayers.
The major ITR Registration benefits that you can reap go as;
In India, there are a total of 7 ITR Forms available to file your Income Tax Return; from Form ITR 1 to Form ITR 7. Depending upon the type or sources of income, filing an ITR Form may vary from one taxpayer to another.
The ITR 1 form is a form in which taxpayers report their income earned during a financial year and tax applicable on the same, to the income tax department.
Form ITR 1 or SAHAJ is a commonly used ITR Form. This form can be used by a resident individual whose total income comes from sources like
ITR-1 form is for resident individuals whose total income falls under the category of taxable income. This form is mainly used by the salaried individuals.
Form ITR-2 is designed to be used by an individual or Hindu Undivided Family (HUF) whose total income includes;
An individual or a Hindu Undivided Family (HUF) having income from a proprietary business or profession should file ITR-3 Form. People having income from the following sources are eligible to file ITR-3;
Individuals, Hindu Undivided Families (HUFs), and Firms (excluding LLPs) having total income not more than Rs 50 lakh and also having income from business and profession are eligible to file Form ITR-4. These taxpayers have income from business and profession, that is computed on a presumptive basis and also have income from salary/pension, one house property, and other sources (interest, dividend, etc.) and so on.
ITR-5 Form is designed to be used by firms, LLPs, Associations of Persons (AOPs), BOIs, Artificial Judicial Persons, Local Authorities, and Cooperative Societies, etc. Remember that people who are needed to file returns under Sections 139(4A), 139 (4B), 139 (4C), or 139 (4D) need not to use this form.
ITR-6 is to be used for companies that do not claim an exemption under Section 11, and have income from the property held for charitable or religious purposes. A taxpayer can file ITR 6 form electronically only.
Firms, Companies, Local Authorities, Associations of Persons (AOP), and Artificial Judiciary Persons can file Form ITR-7 if they are claiming exemptions under Section 139 (4A) especially if they earn from a charitable/religious trust.
Choosing the right ITR Form is important to file your returns properly and also seek income tax and benefit return. Make sure to file your annual income tax return in India before the deadline or due date of the financial year to keep compliant and keep penalties at bay!
Filing an annual income tax return in India is a necessary financial as well as legal obligation that individuals/businesses must follow every year before the due date for the year. It allows taxpayers to unlock a number of income tax and benefit returns. Understanding the importance of Income Tax return filing can push you to file your ITR timely every year. Additionally, choosing the right ITR form is necessary to get your return filed properly and reap maximum ITR registration benefits.
In order to claim your income tax refund, file ITR. The refundable amount of income tax is computed and shown in the tax return.
Income tax returns filing in India is mandatory when the income of an individual/business exceeds the basic limit set for exemption of tax determined by the Government.
The percentage of income taxed varies from one to the other slab rates applicable.
The taxpayer who is eligible for refund can get the Income tax refund through direct credit to his account or through a Cheque of Refund.
There are numerous benefits of filing tax income tax return timely. It not only helps you fulfill your financial and legal responsibilities but also your social responsibilities. Filing personal income tax return benefits are claiming tax refunds, accessing loans, attracting VISA, serving as valid proof of income, etc. Income tax return filing within the due date also protects you from penalties and legal consequences associated with non-filing or late ITR filings.
Such a fantastic blog on importance, benefits and types of income tax return. Keep share more information like this .Thank you?
The best part of this blog is importance & reasons for itr filing. Really helpful and a clear guide. Keep sharing such more informative written pieces. Thanks?