Income Tax Return - ITR Filing, Types, Process and Forms

An Income tax return , commonly referred to as ITR, is a document used to report your income and tax information to the Income Tax Department. The amount of tax you owe is determined based on the income you have earned, and taxpayers must file their returns by a designated deadline. Failure to do so results in penalties.As per income tax laws, individuals and businesses earning income in a fiscal year must file their returns annually. Income can come from a variety of sources, including salary, business profits, property rental income, dividends, capital gains, interests, and more.Individuals and NRIs with an annual income of over Rs. 2,50,000 are required to file income tax returns. The ITR form summarizes a taxpayer's taxable income, tax payments, and deductions, and the process of submitting this information is known as income tax filing.

Under the Income Tax Act, income tax is only applicable to individuals or businesses falling within specific income brackets. In India, the following entities are required to file their Income Tax Returns (ITRs):

1. All individuals up to the age of 59 whose total income for a fiscal year exceeds Rs. 2.5 lakh. For senior citizens aged 60-79, the limit increases to Rs. 3 lakh, and for super senior citizens aged 80 and above, the limit is Rs. 5 lakhs. It is essential to note that the income should be calculated before considering deductions allowed under Sections 80C to 80U and other exemptions under Section 10.
2. All registered companies that earn any income, regardless of whether they have made a profit or not during the year.
3. Anyone seeking a refund on the excess tax deducted or income tax paid.
4. Individuals possessing assets or financial interest entities located outside India.
5. Foreign companies that receive treaty benefits on transactions conducted in India.
6. Non-Resident Indians (NRIs) earning or accruing more than Rs. 2.5 lakhs in India during a single fiscal year.

Note: For assesses whose annual income is below the basic exemption limit, the "NIL FILING" option is also available.

In India, tax laws mandate that individuals must file their income tax returns if their income exceeds the basic exemption limit. The income tax rate is pre-determined for taxpayers. Failing to file returns on time not only results in late filing fees but also reduces the likelihood of obtaining loans or visas for travel purposes. It is important to note that timely filing of income tax returns demonstrates compliance with tax regulations and can positively impact one's credit score.

Everytaxpayer is obligated to file their income tax return if their income surpasses the basic exemption limit* by the due dates** specified in the Income Tax Act of 1961 .*For the fiscal year 2022-2023, the basic exemption limit is Rs. 250,000/300,000/500,000 for different age groups, as already discussed above.**The due dates for filing income tax returns are clearly defined in the Income Tax Act for each year. The following are the various due dates for the fiscal year 2022-2023 (AY 2023-2024).

The following documents are mandatorily required in e-filing process:

1. Form 16/16A: required for salary income and other income where TDS is deducted
2. PAN card and Aadhar card
3. Bank account details, including name, branch, account number, IFSC, and bank statement
4. Details of investments made during the financial year
5. Previous year's tax return
6. Form 26AS : consolidated annual tax statement showing taxes deposited against your PAN
7. TDS deducted by your employer, banks, or other organizations from payments made to you
8. Advance taxes deposited by you
9. Self-assessment taxes paid by you
10. Proof of tax-saving investments made
11. Proofs to claim deductions under section 80D to 80U, including health insurance premiums and interest on education loan
12. Home loan statement .

The following documents are generally required for e-filing of Income Tax Returns for companies and firms in India:

1. PAN Card of the company/firm
2. Aadhaar Card or PAN Card of authorized signatory of the company/firm
3. Bank account details like bank name, branch, account number, IFSC, bank statement
4. Balance Sheet, Profit and Loss Account, and other financial statements of the company/firm
5. Audit Reports (if applicable) like Tax Audit Report, Transfer Pricing Report, etc.
6. Form 26AS: consolidated annual tax statement that has all the information about the taxes deposited against the PAN
7. TDS deducted by the company/firm
8. TDS deducted by banks on interest income
9. TDS deducted by any other organizations from payments made to the company/firm
10. Details of any tax payment made like advance tax , self-assessment tax, etc.
11. Details of all the investments made by the company/firm
12. Any other relevant documents depending on the nature of the business or income earned.

The Income Tax Department website provides a list of nine ITR forms that taxpayers may need to fill based on their income. ITR-1: Also known as Sahaj, this form is for residents (other than not ordinarily resident) with a total income of up to Rs.50 lakh from salaries, one house property, other sources (interest, etc.), and agricultural income up to Rs.5,000. ITR-2: This form is for individuals and HUFs without income from profits and gains of business or profession. ITR-2A: This newly introduced form is for individuals and HUFs with salary income and owning more than one house property but without income from capital gains. ITR-3 : This form is for individuals and HUFs with income from profits and gains of business or profession. ITR-4: Individuals with presumptive income from a profession or business earning less than Rs.50 lakh or under Rs.2 crore respectively can use this form. ITR-4 (Sugam): Individuals, HUFs, and firms (other than LLP) who have presumptive income from business and profession computed under sections 44AD, 44ADA or 44AE can use this form if their total income is up to Rs.50 lakh. ITR-5: Associations, partnerships, and limited liability partnerships that need to report their income for a financial year must use this form. ITR-6: Any company registered in India that needs to file taxes for a financial year should use this form. ITR-7: Entities like universities, research institutions, political parties, and charitable trusts that need to file income tax returns under Section 139(4A/4B/4C/4D/4E/4F) of the IT Act should use this form. Also Read: 7 Different Types of ITR Forms

To file an income tax return, there are two methods available: online and offline. Below are the steps involved in each method.

Online filing of income tax return:

Step 1: Visit the Income Tax e-Filing portal at https://www.incometax.gov.in . Step 2: If you are a first-time user, click on the 'Register' button to register. If you have previously registered, use the login option. Step 3: Login to the e-Filing portal by entering your user ID (PAN), Password, and Captcha code, then click the 'Login' button. Step 4: Click on the 'e-File' menu and select the 'Income Tax Return' link. Step 5: On the Income Tax Return Page, your PAN will be auto-populated. Select the Assessment Year, ITR Form Number, and Filing Type as 'Original/Revised Return.' Step 6: Enter the details of your income earned under the respective heads of income and compute the tax liability after considering all deductions and exemptions. Verify the tax liability after considering the TDS and advance tax. Step 7: Click on the 'Validate Return Tab' and validate the return. If there is any error, rectify it and then process it again. If the return gets validated, it means there is no error, and the return is ready to file. Note: To avoid data loss/rework due to session timeout, click on the 'Save Draft' button timely to save the entered ITR details as in your draft. The saved draft will be available for the next 30 days from the date of saving and till the date of filing the return or till there is no change in the XML scheme of the notified ITR (whichever is earlier). Step 8: Click on the 'Submit' button and verify all the details entered in the ITR. Step 9: Submit the ITR. Step 10: When the process is finished, verify the returns and mail a hard copy to the Income Tax Department. Step 11: Once your verification is received by the IT department and your ITR is successfully uploaded, you will receive an acknowledgement email for the same. If your ITR is successfully verified, it will be considered valid.

Offline filing of income tax return:

Step 1: Visit the link www.incometaxindiaefiling.gov.in . Step 2: From the menu options, click on the 'Downloads' button and select 'Offline Utilities,' then select 'Income Tax Return Preparation Utilities.' Step 3: Select the applicable ITR form. You can select Excel or Java, and the selected form will be auto-downloaded in your computer in ZIP format. Step 4: Enter all the necessary details in the respective form, validate the data, and calculate the taxes carefully. Step 5: Before clicking on 'Save XML,' select 'Generate XML.' This will allow you to save your ITR form at the selected desired location on your computer. Step 6: If you are an unregistered individual on www.incometaxindiaefiling.gov.in , register yourself first with your basic details and file a registration form. After successful registration, you will get a username and ID password. Step 7: Login into www.incometaxindiaefiling.gov.in using your username and password. Step 8: Select 'e-File' and then 'Income Tax Return.' Select the assessment year and then select your properly filled 'ITR Form.' Step 9: In the 'Submission Mode,' choose 'Upload XML.' You can then upload your form where you saved it. Step 10: Verify your returns while submitting the same. Afterward, you will receive a confirmation email on successful submission.

1. Interest and Late Fees: If you file your ITR after the due date, you will be required to pay interest under Section 234A at a rate of 1% per month or part month on the unpaid tax amount. Additionally, a late fee of Rs. 5000.00 under Section 234F must be paid. This fee is reduced to Rs. 1,000 if your total income is less than Rs. 5 lakh.
2. Loss Adjustment: If you have suffered losses from the stock market, mutual funds, properties, or any of your businesses, you may carry them forward and adjust them with next year's income. This can significantly lower your tax liability. However, loss adjustment is only permitted if you declare the losses in your ITR and file it with the income tax department before the deadline.
3. Belated Return: If you miss the ITR filing due date, you can still file a return after the due date, which is called a belated return. However, you will have to pay the late fee and interest as discussed earlier, and you will not be allowed to carry forward losses for future adjustments. The due date for filing a belated return is 31st December of the assessment year, unless extended by the government. For the current year, you may file the belated return latest by 31 December 2023.

Claiming a refund

If an individual has had tax deducted at source ( TDS ) on their income or investment in India, they may be eligible for a refund. To claim the refund, the individual must file an ITR as per the tax laws.

Ease of documentation verification

ITRs can help prepare income documents that establish an individual's income chart. These documents can be used as proof of income when applying for loans. As loan applications often require income verification, an ITR is the most accepted document during the application process.

Proof of income

Income Tax Return documents serve as income proof and can help insurers understand the compensation required to be paid in case of accidental death or disability. As these documents are submitted to a government body, they are considered verified and official.

After filing and verifying your income tax returns, the status of your tax return is initially labeled as 'Verified.' Once the processing is complete, the status changes to 'ITR Processed.' If you would like to know the stage your tax return is in and check your ITR status online, you can follow these easy steps:

Option One - Without login credentials:

1. Click on the ITR Status tab on the left side of the e-filing website.
2. You will be directed to a new page where you need to enter your PAN number, ITR acknowledgement number, and the captcha code.
3. Once you have entered this information, the status of your filing will be displayed on the screen.

Option Two - With login credentials:

1. Login to the e-filing website.
2. Click on the option 'View Returns/Forms.'
3. From the dropdown menu, select income tax returns and assessment year.
4. The status of your filing will be displayed on the screen.

It is important to keep the Income Tax Department informed about your income and taxability to avoid any legal issues and maintain your financial competency. Whether or not you are required to file your ITR, it is crucial to complete the process before the deadline each year.

Aadhaar-PAN Linkage

At the time of filing your income tax return, it is now mandatory to link your Aadhaar with PAN. If you fail to link the Aadhaar with PAN by March 2023, your PAN will be deactivated.

No Fees for Linking Aadhaar-PAN:

There is no fee charged for linking Aadhaar with PAN until December 2022. However, if you fail to do so by this deadline, you can still link your PAN with Aadhaar till March 2023 by paying ₹1000 as a challan under head 500.

ITR Form Download:

You can download the Income Tax Return (ITR) form at any time by logging in to the Income Tax portal using your credentials.

Refund of TDS/Income Tax:

To receive a refund of TDS or income tax, it is necessary to file the income tax return online and verify it using Aadhaar credentials. FREQUENTLY ASKED QUESTIONS

Q1. How can I claim an income tax refund after the due date?

You can claim an income tax refund by filing a belated return on or before 31st December of the assessment year, even if you missed the due date for filing ITR. A penalty of Rs.5,000 is charged for the delay, except for those whose total income is less than Rs.5 lakh, where the fee payable is Rs.1,000.

Q2. Can I pay income tax after the due date?

Yes, you can pay income tax and file your return post the due date. However, you will be levied with late filing penalty and interest while filing ITR. For delayed filing of return, a penalty of Rs.5,000 is charged, except for those whose total income is less than Rs.5 lakh, where the fee payable is Rs.1,000.

Q3. What section of the Income Tax Act allows me to file ITR after the due date?

Section 139(4) allows the filing of a belated return after the due date, subject to a penalty of up to Rs.5,000 for delayed filing of return.

Q4. What is the due date for filing an income tax return?

The due date for individuals and non-audit cases is usually 31st July of the relevant assessment year, and for audit cases, it is 31st October of the relevant assessment year.

Q5. How can I revise income tax returns before the due date?

You can revise your original return filed using the revised return under Section 139(5), following the standard procedure for original return filing. The entire process of e-verification must be completed while revising the return.

Q6. How can I revise income tax returns after the due date?

You can file a belated return on or before 31st December of the assessment year using the revised return under Section 139(5) to revise your original return. If you miss this date, you can seek permission from your A.O. to file past returns under Section 119 in extreme situations.

Q7. What happens if I fail to file an income tax return before the due date?

You can file a belated return, but a penalty of up to Rs.5,000 for late filing will be charged. However, if your total income is less than Rs.5 lakh, the fee payable is Rs.1,000.

Q8. What is the due date for filing ITR for trusts?

For trusts not requiring an audit, the due date for FY 2022-23 is 31st July 2023. For trusts requiring audit, the due date is 31st October 2023. If the trust needs to furnish a report in Form No. 3CEB u/s section 92E, the due date to file ITR will be 30th November 2023.

Q9. What is the due date for filing ITR for companies?

The due date for filing ITR for domestic companies for FY 2022-23 is 31st October 2023. However, if the company is having any international or specified domestic transactions and requires a report in Form No. 3CEB u/s section 92E, the due date is 30th November 2023.

Q10. What is the last date to file ITR?

The last date to file ITR for individuals is 31st July of the relevant assessment year, and for taxpayers whose accounts are subject to audit, it is 31st October of the relevant assessment year.Ready to make the most of your money? Start your tax planning journey now!

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.