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An income tax return is a form that contains information about the person's income and taxes to be paid on it during the year. Information filed in the ITR should relate to a financial year starting on 1st April and ending on 31st March of the next year.
Government mandates the return filing for those who fulfills the criteria to file the return of income in financial year. Assessee can also voluntarily file their return of income.
Income tax return contains all the information right from the income earned by the person to the taxes paid and any eligible refunds on it. It is considered to be legal proof of income. Filing of return helps the assessee to claim refunds and carry forward of losses.
So, it is important for a person to file ITR even if they suffered losses in any financial years. ITR also becomes important while applying for a loan from any bank or financial institution. Some banks even ask for the ITR when issuing credit card.
Also, if an assessee has not filed the original return they become ineligible to further file revised return.
Apart from the compliance perspective, filing of the return also makes you a responsible citizen which also further helps you in the business and to enter into the transactions.
In the case of an individual, resident in India, if the gross total income (before allowing deductions under section 80C-80U) exceeds the basic exemption limit in a financial year, then it shall be mandatory for the individual to file a return of income.
The basic exemption limit:
Old Tax Regime
New Tax Regime
Individuals aged less than 60 years
Senior citizen aged 60-80 years
Super senior citizens aged more than 80 years
In the case of NRI, who has an income earned or accrued in India, exceeding Rs. 250000 in a financial year has to file a return of Income.
For the following class of persons, it shall be mandatory to file the return of income:
For the companies and partnership firms, irrespective of whether it is a profit or loss.
It shall be mandatory for a resident individual having an asset or financial interest in an entity located outside of India.
A resident of India having signing authority in a foreign account shall also mandatorily file a return of income.
If a person is in receipts of income derived from property held under a trust for charitable or religious purpose or a political party or a research association, news agency, educational or medical institution, trade union, a not-for-profit university or educational institutes, a hospital, infrastructure debt fund, body or trust shall also file a return of income for every financial year.
If the person wants to claim a refund of income tax, then it shall be mandatory to file a return of income.
A foreign company taking treaty benefits on a transaction in India has to file a return of Income in India.
The due dates as per section 139(1) of Income tax Act and the due dates for filing return of income for the current AY are as follows:
Due Date, As per Section 139(1)
Due Date for AY 21-22
Companies, working partner of a firm and assesses who accounts are subject to audit
31st October of the Assessment year
15th February 2022
Transfer Pricing Assesses
30th November of the Assessment year
28th February 2022
31st July of the Assessment year
31st December 2021
The due date to file a revised or belated return is extended till 31st March 2022.
If the assessee is unable to file the return of income up to the due date, they can also file a belated return for that financial year.
Section 234F was inserted in the Income Tax Act, 1961 to levy a penalty for late filing of the income tax return. According to the section, if the person was required to file a return of income, and has failed to file the same, shall be labile to penalty under the income tax act.
Every person who files a return after the due date in case of a non-tax audit shall be liable to a penalty amounting to Rs.5000 and in the case of tax-audit cases, it shall be Rs.10000.
However, for the small taxpayers, whose total income does not exceed 5 Lakh, the maximum penalty levied shall be only Rs.1000.
The assessee would also be obliged to pay interest under section 234A at the rate of 1% per month on the amount of tax due to the government.
This is also called Sahaj, which is to be filed by only resident individuals having total income up to Rs.50 lakhs. It means this ITR cannot be filed by NRI. The sources of income shall be:
Single House Property
Other sources (excluding winning income and income from horse race)
Agricultural income up to Rs.5000
This ITR cannot be filed by NRI. Click here to know more about ITR-01.
This ITR is for individuals and HUF having income other than business income and are not eligible to file ITR 01. This ITR can also be filed by NRI. ITR 2 has to be also submitted by a salaried assessee having profit or loss from dealing in shares. The sources of income for ITR 2 shall include:
Multiple House property
Other Sources (Including winning income and income from Race Horses)
Click here to know more about ITR-02.
This ITR is for individuals and HUF having income for profits and gains from business and profession. The sources of income shall include:
Having income from running a business or practicing a profession
Income from house property, salary/pension, capital gain
Income from other sources
Click here to know more about ITR-03.
It is also known as Sugam. This ITR is for individual, HUFs and partnership firm (other than LLP) who opts to pay tax under presumptive taxation scheme, having total business income computed as per section 44Ad or 44AE, or professional income computed as per section 44ADA.
ITR4 can also be filed by a freelancer. Click here to know more about ITR-04.
This ITR is for Partnership firms including LLP, AOP, BOI, Artificial judicial person, Estate of deceased, Business trust, and investment fund. Here income from business and profession or any other type of income can also be reported. Click here to know more about ITR-05.
This ITR can be used to file a return of income of the company’s other than the company’s claiming exemption under section 11(income from property held under charitable or religious trust). This return can only be filed electronically. Click here to know more about ITR-06.
This ITR has to be filed by the following persons:
Every person in receipt of income derived from the property is held under a Charitable or religious trust.
By Political party whose income without giving effects of section 139A, exceeds the basic exemption limit not chargeable to tax.
By scientific research association
Institution or association referred under section 10(23A), 10(23B)
By every university, college, which is not required to file any other return
Fund or institution other than education or medical purpose
Click here to know more about ITR-07.
Filing of return is very important, not only because the law mandates it do so for some classes for the assessee, but it does come with a number of benefits. The government has also recently launched a new income tax portal with additional features to make the return filing process simpler.
To have a richer experience with a much simpler interface, one can also use Webtel Electrosoft for filing the return. It is one of India’s fastest ITR filing software. Law is ever-changing, there are so many frequent amendments, changes in deadlines which are all updated at the earliest at Webtel. It provides all the facilities starting from generation of the tax audit report to bulk upload, multi-user option and direct import of form-26AS data in software.
Webtel also provides 100% data security with real-time monitoring. This all can help to make the process of return filing very easy and convenient. Webtel comes with all power-packed facilities to work smarter and faster. For further details, you can now schedule a demo on website or get in touch with executives for further information.