Income Tax

What is ITR?

Income Tax Return (ITR) is a form used by individuals, businesses, and other entities to report their income, expenses, and taxes paid to the Income Tax Department. It is a mandatory requirement for taxpayers to file an ITR to declare their income for the financial year and ensure compliance with tax laws. Filing an ITR is essential for calculating the total tax liability and can also help taxpayers claim tax refunds if they have overpaid.

Who Needs to eFile an Income Tax Return?

In India, anyone who falls under the taxable income bracket is required to file an Income Tax Return (ITR). However, it is mandatory for the following individuals to file ITR:

  • Individuals with an income above the basic exemption limit:For individuals under 60, the income limit is ₹2.5 lakh; for senior citizens (aged 60 or above), it is ₹3 lakh, and for very senior citizens (aged 80 or above), it is ₹5 lakh.
  • Businesses and Professionals:If you run a business or are a professional earning income (whether through a salary or freelance work), you need to file an ITR, regardless of your income level.
  • Individuals with Foreign Income:If you have earned income outside India, you need to file ITR irrespective of whether the income is taxable or not.
  • Individuals Seeking a Refund:Even if your income is below the taxable limit but you have paid excess tax through TDS (Tax Deducted at Source), you must file an ITR to claim the refund.
  • High-value Transactions: If you engage in high-value financial transactions such as purchasing property, investments in mutual funds, or other investments, filing ITR becomes mandatory.

Types of ITR

The Income Tax Department has provided different types of ITR forms for various categories of taxpayers. The most commonly used forms include:

  • ITR-1 (Sahaj):
    • This form is for salaried individuals, pensioners, or those with income from a single house property or other sources like interest.
  • ITR-2:
    • Used by individuals and Hindu Undivided Families (HUFs) with income from multiple sources like capital gains, house property, or foreign income.
  • ITR-3:
    • For individuals and HUFs who earn income from a business or profession, including freelancers.
  • ITR-4 (Sugam):
    • For taxpayers who have opted for the presumptive taxation scheme, i.e., small businesses or professionals with turnover below a specific threshold.
  • ITR-5:
    • Used by firms, LLPs, AOPs (Association of Persons), BOIs (Body of Individuals), and other similar entities.
  • ITR-6:
    • For companies that are not claiming exemptions under Section 11 (income from property held for charitable or religious purposes).
  • ITR-7:
    • For individuals and entities who are required to file a return under Section 139(4A) for trust income, political parties, or institutions claiming exemptions.

Documents Required for ITR e-Filing

  • Before you file your ITR online, ensure you have the following documents handy:
    • PAN Card
    • Aadhaar Card
    • Form 16 (TDS Certificate)
    • Bank Statements/Passbook
    • Proof of Other Income:
    • Details of Deductions:
    • Tax Payment Challans:
    • Capital Gains Statement:
    • Other Supporting Documents:

      • Documents for any other claims or deductions, such as medical expenses or charitable donations, should be kept ready.

Frequently Asked Questions

The deadline for filing ITR for individuals is usually 31st July of the assessment year. However, it may be extended by the government in certain cases.

Yes, you can file your ITR without Form 16. You just need to report your income from all sources and the TDS paid, which can be verified from your bank statements and other documents.

You can check the status of your ITR refund by visiting the official Income Tax Department website and using the "Income Tax Refund Status" tool.

If you file your ITR after the due date, you may be liable to pay a late filing fee, and in some cases, interest on the tax due.