Income Tax Return (ITR) is a form that a person is supposed to submit to the Income Tax Department of India. It contains information about the person’s income and the taxes to be paid on it during the year. Various forms are ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, and ITR 7. When you file a belated return, you are not allowed to carry forward certain losses.
- Importance of Income Tax Return (ITR) Filings:
1. It helps in Nation Building as Taxes is one of the primary sources of income for the government.
2. It helps in getting a personal loan or home loan etc. In order to process your Loan Application, the bank/lender will require you to submit your income-related proof (ITR).
3. ITR can be used as address proof. It is a tax assessment documents.
4. We can claim tax deductions to reduce overall tax liability.
5. High-value investments such as purchasing a property are reported to the IT department. When you pay taxes and file returns, these transactions can be reported and substantiated as per your income.
6. Individuals cannot carry forward losses of the current financial year to the next financial year until an ITR is filed. It is important to file your income tax return on time in order to claim the losses in future years.
- Due Date for filing ITR for this year:
The due date for filing Income Tax Returns has been extended to September 30, 2021.
- Penalty, if ITR not Filed:
- Rs.5000 if ITR is reported before 31st December of the Assessment Year, Rs.10,000 if ITR is reported after 31st December but before 31st March of the Assessment Year
- The income tax department can launch prosecution against you for non-filing of ITR.
- For Salaried Individual- Total annual income below Rs.2.5 lakhs: No penalty (No ITR penalty for nil return)
Note: If a person who is required to furnish a return of income under section 139 fails to do so within the time prescribed then they will have to pay interest on tax due, according to Income Tax Department.
- Quick Steps to file ITR – Online
1. Visit https://www.incometax.gov.in for e-filing the return of income.
2. Create your login Id and Password on the Income-tax portal. (Register Yourself).
3. log in to the e-Filing portal by entering user ID (PAN), Password, Captcha code and click ‘Login’.
4. Click on the ‘e-File’ menu and then click the ‘Income Tax Return’ link.
5. Select ‘Assessment Year’, Select ‘ITR Form Number’, Select ‘Filing Type’ as ‘Original/Revised Return, ‘Select ‘Submission Mode’ as ‘Prepare and Submit Online’, and then Continue.
6. Fill all the applicable and mandatory fields of the online ITR form.
7. Choose the appropriate Verification option in the ‘Taxes Paid and Verification’ tab.
8. Click on the ‘Preview and Submit’ button, Verify all the data entered in the ITR.
9. ‘Submit’ the ITR after complete check.
- 7 Key Things to take care of before filing the ITR:
- Clubbing Income
- Non-reporting of Exempt Income
- Correct Bank Account Number
- Profit on sale of Jewellery, paintings, and more
- Income where tax has been deducted
- TDS & TCS details
- Deduction for Investment claim
- Key Point – Must remember:
- Provide your valid Email ID and mobile number while Registration.
- On Income Tax Return Page: PAN will be auto-populated.
- Read the instructions carefully
- Use your Form 26AS to summarise your TDS payment for all 4 quarters of the assessment year.