India’s Income Tax Laws are governed by the Government. The Government imposes a tax on the taxable income of all persons, individuals, HUF, companies, firms, LLP, and association of persons, local authority, and others. According to these laws, it depends upon the residential status of a person.
Any person who qualifies the criteria of residential status is required to pay the tax.
Every Financial Year, taxpayers have to follow certain rules and regulations for filing the Income Tax Return.
Income Tax Return | Basic Understanding
An Income Tax Return is a form that contains all your income details that are earned from various sources and pays taxes thereon.
Your ITR contains all your details and tax savings done by an individual in a particular year.
As per the law, the income tax return should be filed every financial year by an individual or business. The income could be in the form of salary, business profit, capital gains, interests, or other sources.
The tax department has notified 7 types for ITR Forms i.e. ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, ITR 7 for filing the return.
Why Filing a Tax Return is Important?
Income Tax 1961, obligates the person to be eligible for filing the income tax return to legitimize the earning and investment.
Whereas, non-filing means that you have not disclosed the income which should be disclosed according to the person.
What is efiling of ITR?
Efiling of the return is filing the income tax return online. There are two ways for filing your ITR:
- One that we all know is the traditional method i.e. offline method. The paper format and submitting it physically to the department.
- Second method is quite easy and most of the people file their return online through a portal. You have to submit the return online website.
Who should file the Income Tax Return?
As per income tax laws, ITR must be mandatorily filled by the resident individual’s gross total income during the financial year. The basic exemption limit of the individual as per the Government.
(i) Deposit of amount or aggregate of the amount exceeding the Rs 1Crore in more than one account.
(ii) Incurred expenditure of an amount or aggregate of an amount exceeding Rs 2Lakh for travel to a foreign country for yourself or any person.
(iii) Incurred expenditure of amount or aggregate of the amount exceeding Rs1 Lakh on the consumption of electricity.
OVERVIEW OF ITR FORMS
The tax returns forms notified by the Government for FY 2020-21 applicable to individuals are:
|ITR FORM NO||Applicable||Threshold||Remarks|
|ITR 1||ROR Individuals||Total Income Up to INR 50 Lakh||Earning Income from salary, income from other sources (agricultural income limits to 5000)|
Not Applicable to an individual who is either a Director in a com
|ITR 2||All Individuals||Total Income More Than INR 50 Lakh for ROR||Individual earning income from capital gains, more than one house property, claiming foreign tax relief, ROR having foreign assets|
|ITR 3||All Individuals||No Limit has been prescribed||Professionals and Business owners individual speculative business|
|ITR 4||NOR & ROR||Total income up to Rs 50 Lakh||Income from business and profession computed under specified presumptive tax provisions|
How to Regsiter Yourself to the Income Tax Portal for Efiling ITR?
You can easily file your ITR by e-filing. The process is easy, quick, and it can be completed from your home itself or office. Here are a few steps to file your return:
Step 1: Visit the official website
Step 2: Register yourself
Step 3: Click on Taxpayer and your details like PAN Number to verify your identity
Step 4: Fill in all your basic details if you are a new user
Step 5: Provide your email address and mobile number
Step 6: Once you are done click ‘Continue’
Step 7:Verify with OTP sent to your mobile number and email address
Step 8:Once you are done with OTP verify your details, if something seems incorrect change it
Step 9: Setup your password and secure with a login message
Step 10: Your successful registration will be done.
Now you just have to calculate your income and tax liability according to the tax laws. You can use 26AS for summarizing the TDS payment for all 4 quarters of the assessment year. Choose the correct form for e-filing ITR.