Filing income tax is always considered a complex process. However, it is not as tedious as it sounds. The Income Tax Department is rigorously working to make the filing process smooth and easy.
The Income Tax Department has also embraced digital technology, and one of the major conveniences that have come through it is electronic filing (e-filing).
From introducing the provision u/s 234F for non-filers of income tax returns to making most of the processes accessible online the department’s objective is very clear that it wants your files to be clean and compliant with the law.
Income tax is a type of tax that is levied by governments on the income earned by individuals, corporations, and other entities. The tax is usually calculated as a percentage of the income earned, and the amount paid is used to fund various government programs and services.
eFiling of Income Tax returns refers to the electronic filing of tax returns through online platforms provided by tax authorities. It is an alternative to the traditional method of filing paper-based tax returns. This process is easy; quickly, in the comfort of your home or office, you can file an income tax return.
Individuals are required to pay income tax on their salary or wages, as well as on other forms of income such as interest, dividends, rental income, business profits, and capital gains. Corporations are also required to pay income tax on their profits.
ITR contains all the details of incomes and tax-saving investments an individual does in a particular financial year. The tax department has notified 7 types of ITR forms for filing Income Tax returns (Forms are relevant for individuals, companies, firms, etc.).
In India, there is a general practice that if you are a citizen with a gross income that exceeds the basic tax exemption limit, i.e., 2,50,000 subject to certain conditions, you must file Income Tax Return (ITR). If your income doesn’t exceed Rs 2,50,000 during the year, you’re not legally bound to file your return. But it’s still recommended that you file your return because of the benefits that come with filing an income tax return:
When you meet with an accident and want an accidental claim from the insurance companies if you have your income tax returns with you then the court applies a simple formula to arrive at the claim amount.
What’s the best document for your Income Proof? No brownies for guessing this one. Yes, we all know it’s your income tax return.
You can claim a refund of the amount you have paid in excess or deducted excessively in the form of TDS. There is no bigger joy than returning your money from the Income Tax Department.
Income Tax Returns of the last three years is one of the basic documents required for loans. This helps banks in judging your payback capacity.
If in a financial year, you have incurred capital losses, then you can carry forward it and settle in the future.
For traveling abroad, foreign consulates of many countries ask you to furnish the last 3 years’ income tax returns or the current year’s income tax return. The absence of any return can reduce your chances of getting a visa, especially under the visitor, investor, and work permit categories.
Want to claim last year’s business loss? File your income tax return, and you’re all set for it.
Looking to raise funds from VCs, or angels? You need to have income tax returns filed to date ready. Many investors study your business scalability, profitability, and other cost parameters from your business income tax return.
The ITR filing due date for FY 2022-23 (AY 2023-24) is 31st July 2023. ITR filing on the due date is essential to comply with tax laws, avoid penalties, claim timely refunds, maintain accurate financial records, and facilitate financial transactions. It is advisable to prioritize timely filing to stay in line with regulatory requirements and avoid unnecessary complications.
Although, for the people who fall within the limits of a tax audit, the due date is 31st October, and in the case where transfer pricing is applicable, the due date is 30th November after the end of the financial year.
Every Indian, including an NRI, is required to file an Income tax return where Total Income exceeds the basic exemption limit of Rs. 2,50,000 for an individual, Rs. 3,00,000 in case of a senior citizen and Rs. 5,00,000 in case of super senior citizens
You are required to file a return irrespective of the fact whether you have paid tax or not. So, even if the employer has deducted TDS in full you are still required to file an income tax return.
However, there are certain conditions, other than income above Basic Exemption Limit, due to which a person would be mandatorily required to file ITR!
Such conditions are :
You must file your return before the due date, if you have sustained a loss in the financial year and if you want to carry forward it to the subsequent year for adjustment against the subsequent year’s income. Loss can be carried forward only if you have filed the return claiming such loss before the due date.
It is always advisable to file ITR even if the person is not mandatorily required to file the ITR according to the Income Tax Act. This is because the ITR return serves as a proof of income statement for various purposes like loan approval, VISA applications, credit card applications, claim income tax refunds and set off and carry forward of losses, etc.
You can claim a refund of the excess tax paid by filing your Income-tax return. It will be refunded to you by crediting it to your bank account through ECS transfer. It is important to pre-validate your bank account details before filing your income tax return.
You can file ITR 1 if the agricultural income is up to Rs 5,000. For agricultural income exceeding Rs 5,000, you have to file ITR 2.
ITR return forms are attachment-less forms and, hence, the taxpayer is not required to attach any document (like proof of investment, TDS certificates, etc.) along with the return of income (whether filed manually or filed electronically). However, these documents should be retained by the taxpayer and should be produced before the tax authorities when demanded in situations like assessment, inquiry, etc.
You can still file your tax return on ClearTax without a Form 16. You’re just going to need your payslips. Follow the instructions on this guide to e-file without Form 16.
Get In Touch