An Income Tax Return (ITR) is a document utilized to report details of your earnings and the corresponding tax obligations to the Income Tax Department of India. As per Indian tax regulations, every individual and business generating income must submit an ITR. This process facilitates the declaration of taxable earnings, tax dues, and deductions claimed, if applicable.
Firms, corporations, Hindu Undivided Families (HUFs), and both salaried and self-employed individuals are required to file their tax returns before the deadline to avoid penalties for late submission. Having a clear understanding of what an Income Tax Return is helps ensure adherence to Indian tax laws.
Understanding Income Tax Return Filing
ITR filing involves documenting an individual’s total income accrued within a financial year. Taxpayers can complete this process through the official website of the Income Tax Department. There are seven different forms designated for this purpose.
Different Types of ITR Forms
Currently, there are approximately nine types of Income Tax Return forms, such as ITR forms, available for taxpayers. However, as per the Central Board of Direct Taxes in India, individuals should file their returns using only the following forms:
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ITR 1 or Sahaj
Applicable for individuals earning an annual income below Rs 50 lakh through salary or pension and possessing only one house property.
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ITR 2
This form is intended for individuals with income from the sale of assets or property. It is also suitable for those with earnings from foreign sources. Both individuals and Hindu Undivided Families (HUFs) can use this form for tax filing.
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ITR 2A
Introduced in the 2015-16 tax year, the ITR-2A form serves as an income tax return form for individual taxpayers and Hindu Undivided Families (HUFs).
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ITR 3
Designed for individual taxpayers or Hindu Undivided Families (HUFs) who are partners in a firm but do not actively engage in the firm’s business operations. It also applies to those with no income derived from firm-related activities.
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ITR 4 or Sugam
This form is applicable to individuals running a business or profession. It caters to all types of enterprises, undertakings, or vocations without any income limitations.
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ITR-4S
The ITR-4S form could be used to file income tax returns by any person or Hindu Undivided Family (HUF).
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ITR 5
The ITR-5 form is specifically designed for Firms, Local Authorities, Co-operative Societies, Artificial Juridical Persons, and Associations of Individuals to file their income tax returns.
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ITR 6
Except for firms or organizations that claim tax exemption under Section 11, all companies utilize the ITR-6 form. Organizations that can claim tax exemptions under Section 11 are those whose income is derived from property utilized for religious or charitable purposes. This particular income tax return form can only be filed online.
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ITR 7
Entities such as scientific research institutions, universities, colleges, charitable or religious trusts, and political parties that qualify for tax exemptions must file their returns using the ITR-7 form.
Who Needs to File Income Tax Returns?
The following individuals and entities are required to file ITR:
- Individuals earning Rs. 5 lakh or more annually.
- Resident individuals or HUFs holding assets outside India.
- Persons required to file returns under Section 139(4B) (ITR 7).
- Taxpayers providing notice to the assessing officer under Section 11(2)(a).
- Individuals claiming tax relief under sections 90 or 90A.
- Residents with signing authority over foreign accounts.
- All businesses.
- Taxpayers required to submit audit reports under various sections such as 10(23C)(IV), 10(23C)(V), 10(23C)(VI), 10(23C)(VIA), 10A, 12A(1)(b), 44AB, 80IA, 80IB, 80IC, 80ID, 80JJAA, 80LA, 92E, or 115JB.
- AOPs, BOIs, Local Authorities (ITR 5), Artificial Juridical Persons, and Cooperative Societies not covered under Section 44AB.
Steps to File an Income Tax Return
If you are considering how to file an Income Tax Return (ITR), there are two available methods: online and offline. Below is a breakdown of both options:
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Online Method
For filing the income tax return online, first, determine the income tax liability. Visit the official portal of the income tax department for e-filing income tax. Fill in the required details, upload the necessary documents if needed, and once confirmed, validate the filings.
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Offline Method
Access the official income tax e-filing portal and navigate to the IT Return Preparation Software section to download the appropriate ITR form. Open the downloaded form on your system.
Subsequently, enter all the required details and collect the necessary documents such as Form 16, Form 26AS, and TDS certificates. Once completed, generate and save a JSON file of the ITR form. Finally, proceed by uploading the JSON file to submit your ITR.
ITR Filing Deadline and Penalty for Delayed Submission
The deadline to submit the Income Tax Return (ITR) for the Financial Year 2023-24 (Assessment Year 2024-25) without incurring any late fees is 31st July 2024.
A penalty of up to Rs 5,000 applies to individuals earning more than Rs 5 lakh annually if they miss the deadline. If the income tax return is filed after the deadline, the penalty may increase to Rs 10,000.