Income Tax Return Filing

Brief of Income Tax Return Filing

Income tax return filing in India is an important criteria for idol nation-building and offers several benefits. IT return filing helps individuals and entrepreneurs or businesses claim TDS refunds, provides easier access to loan applications, and allows them to carry forward losses. However, one can claim deductions and exemptions under the Income Tax Act, 1961.

According to Income tax rules and regulations, it is mandatory for every citizen of India, whether an individual, association, or firm, to pay tax on their income to the Indian government. However, income for each financial year is taxed in accordance with Income tax laws. Therefore, Income tax return filing in India on an annual basis is essential meanwhile, one can choose to file an income tax return in India either online or offline according to convenience.

The Income Tax Department of India is the statutory department that looks after the filing of IT returns. This form of income tax return contains information about a person's income and taxes to be paid during the year, i.e., pertaining to a particular financial year. Additionally, the financial year starts from 1 April to 31 March of the next year.

What is Income Tax?

Income tax is a tax imposed on individuals or businesses concerning the income or profits they receive or earn. By law, income tax in India is mandatory that the respective taxpayer file within the stipulated time period in each financial year. Filing income tax in India helps the taxpayers determine their tax obligations.

Income taxes collected from individuals or businesses in India serve as revenue for governments. The income tax collected is used to fund public services and pay government obligations. Additionally, in the federal form of government, many states and local jurisdictions also levy income taxes.

Meanwhile, only individuals earning above a certain amount are required to pay income tax on their earned income. Failure to file income tax in India on time will result in penalties and fines. The income tax rates, income slaps, and rules are regulated by the government of India and are subject to changes from time to time.

What is Income Tax Return Filing?

Income tax return filing is an essential form that every individual, entrepreneur, and business has to file or pay tax to the Indian government on the income they generate every financial year. There is a designated e-filing income tax Government official website that one can visit and fill in the details accordingly to proceed with the ITR filing in India.

Here, income refers to income earned from sources like salary, profit in business, sale of house or property, dividend or capital gains, etc. However, if you have paid tax in excess during a year, the Income tax department will refund you on ITR filing.

Types of ITR Filing Forms

The ITR filing is a mechanism that taxpayers use to provide reports to the Income Tax Department about their earnings and tax payments. It is a must-have rule that taxpayers register their ITR on or before the deadline. Many types of ITR filing forms are available in the official e-filing portal that are applicable to various instances.

The details of the types of ITR filing forms available in India are given below:

1. ITR-1 or Sahaj

This type of ITR filing form is to be filled by the individuals who fall under the category:

• Salary & pension earners
• Income earned from other sources (excluding winning a lottery or horse racing)
• Agricultural income less than Rs. 5,000/-
• Payments received for a single-house party with certain exceptions

2. ITR-2

These forms are to be filed by individuals and Hindu Undivided Families (HUF); the same has to be downloaded by an applicant from the e-filing portal. Given below are the categories that fall under the ITR-2 form:

• Income exceeding Rs.50 lakh
• Income generated from foreign assets
• Income received through salary, pensions, capital gains and other sources
• Agricultural income exceeding Rs.5000/-

3. ITR-3

ITR-3 forms are to be filed by the individuals and HUF who fall under the given below categories:

• Income earned from business or profession
• Income earned from being a partner in a firm
• Income earned through salary, pension, capital gains, and other sources.
• Investments in unlisted equity shares
• Individual director in a company

1. ITR-4 or Sugam

These forms are to be filed by individuals, Hindu Undivided Families, and firms with incomes up to Rs.50 Lakh from businesses or professions. Additionally, individuals who have chosen the presumptive income scheme under section 44AD, section 44ADA, and Section 44AE of the Income Tax Act are eligible to file their ITR using the ITR 4 form.

2. ITR-5

This form is to be filed by firms, bodies of individuals, cooperative societies, Limited Liability Partnerships, Associations of Persons, local authorities, Artificial Judicial persons, estates of insolvent, estates of deceased, and business trusts, except individual citizens.

3. ITR-6

This is a type of ITR form that businesses must file to report revenue from industry or occupation and all other forms of income, except income from religious or charitable property.

4. ITR-7

These forms are to be filed by businesses, partnerships, and trusts that continue to be excluded from paying income tax.

Importance of Filing Income Tax Returns

Every citizen and business must file income tax returns every financial year to avoid any legal complications in day-to-day business operations. Given below are the list of importance of filing Income tax Returns in India:

1. Demonstrate Accountability

This e-filing of income by people who make a certain amount of money annually file an IT return within the timeframe as per the Income Tax Act demonstrates the responsibility of citizens to ensure accountability to the income tax department by recording the incomes after deducting any applicable tax of the taxpayer.

2. Filing Returns Serves as Proof of Evidence

Though individuals don't need to file IT returns if their total annual income is low, it might still be a great idea to do so voluntarily. This IT return filing serves as evidence when registering immovable property in India.

3. Income Tax Return Filing helps in Loan Sanction.

It is recommended that individuals or businesses maintain a consistent record of income tax return filing, as it serves as proof of income history. For example, while applying for a home loan, the lender will probably insist on it.

4. Claiming of Adjustment for Past Losses

A regular income tax filing within the specific deadline in each financial year upholds several benefits. This IT return filing will showcase the considerable losses and thus provide a complete view to individuals to request a reduction for prior losses.

5. Revisions to returns may make filing returns useful

The taxpayer cannot file a revised return unless the original return has not been filed. Subsequently, the Income Tax Act imposes a fine of Rs.5,000/- for failure to file returns.

What are the Eligibility Criteria for filing an ITR?

Only those categories of income earned by an individual and businesses shall file the IT return as per mentioned in the Income Tax Act of 1961. Given below is the list of eligibility criteria to file ITR in India:

• Individuals below 60 years old earn Rs 2.5 lakh as their annual total income.
• For individuals above 60 years but below 80 years earning Rs 3.0 lakh as annual total income.
• For individuals above 80 years earning Rs 5.0 lakh as annual total income
• Any company or entity operating in India, regardless of whether it is in profit or loss
• Any Indian resident who owns an asset or has any financial ties to an international entity
• Any individual who wishes to carry forward losses that have been incurred
• High-value transactions

Who Should File Income Tax Returns?

Filing an income tax return in India is a legal duty and a financial responsibility that applies to various categories of individuals and businesses under different circumstances. Given below is the list of who should file income tax returns in India:

1. Salaried Individuals

Any individual whose annual total salary or income exceeds the tax exemption limit is compulsory for income tax return filing.

2. Firms or Businesses

Regardless of profit or loss, all businesses, firms, LLPs, etc., have to file income tax returns mandatorily.

3. Directors & Partners

Any individuals who serve as directors or partners in a private limited company or LLP are required to e-file income taxes, which reflect their income and financial activities within the company.

4. Dividend Earners

Suppose an individual receives dividends from sources like mutual funds, bonds, equities, fixed deposits, and interest. In that case, such individuals need to file income tax returns electronically to ensure that all sources of income are diligently reported and taxed if applicable.

5. Charity & Religious Trusts

Income received from managing charity funds, religious trusts, or voluntary contributions also requires income tax return filing to maintain transparency and adherence to tax laws.

6. Tax Refunds

Both individuals and businesses eligible for tax refunds must file their returns through the e-filing income tax return portal.

7. NRIs & Tech Professionals

NRIs and tech professionals whose income is earned or derived in India and exceeds the exemption limit must file an income tax return.

Benefits of E-Filing Your ITR

In India, filing an online income tax return is also commonly known as e-filing income tax. Some of the major benefits of e-filing ITR returns are as follows:

1. Fast Processing

Compared to the traditional method of filing income tax returns, e-filing income tax has increased the speed of ITR filing in India, and more importantly, refunds.

2. Better Accuracy

The method of e-filing income tax software has considerably reduced the chances of errors, ensuring seamless and error-free services in ITR filing.

3. Convenience

Unlike the traditional system, which meets the official timings, there is no time limitation for filing an ITR through an online platform. Therefore, the e-filing income tax facility is available 24/7.

4. Confidentiality

Proper and systematic security is provided compared to paper filing, which allows access to anyone either by design or by chance.

5. Past data accessibility

The e-filing income tax return facility provides easy access to past data by securing individuals' or businesses' history of ITR filing.

6. Proof of receipt

Immediately, proof of receipt shall be sent to the applicant who filed the ITR through the e-filing portal via registered email id.

7. Ease of use

It is easy to file an ITR through an online platform, as the website is customer-friendly and provides detailed instructions to make it simpler.

8. Electronic banking

The e-filing portal offers the option to file now and pay later, where individuals or businesses can decide on a date on which income tax will be debited from their account. Additionally, they provide direct deposit for refunds and direct debit for tax payments.

Documents Required to File ITR

In income tax return filing, several documents must be attached with specific forms based on the tax filer's earning sources. However, documents required to file e-filing income tax may differ accordingly, irrespective of that some of the common documents required to file ITR in India are as follows:

• PAN Card
• Aadhaar Card
• Form 16
• Form-16A/Form-16B/Form-16C
• Bank account details
• Bank statement or Passbook
• Form 26AS & AIS/TIS
• Home Loan Statement
• Tax Saving Instruments
• Capital Gains Details
• Rental Income
• Foreign Income
• Dividend Income
• Interest Certificate

How to File ITR?

In India, ITR filing can be accomplished through two primary methods, namely online ITR filing and offline ITR filing through the official website of the e-filing portal. Here given below is the step-wise procedure for both online and offline income tax e-filing in India:

Online ITR Filing Process

E-filing of income tax return is a seamless and straightforward process; here given below are the steps for the online ITR filing process:

• Visit the official government website or Income tax portal for income tax India e-filing and proceed by clicking on login at the top right corner.
• Next, create a registered username for login credentials. Usually, PAN and password are to be inserted mindfully in the designated fields.
• After login , click on the e-file, tap on the dashboard, and select "File Income tax Return' from the dropdown menu to start e-filing the income tax return.
• Now, specify the assessment year for ITR filing and remember to select online as a mode of income tax filing.
• Select the taxpayer category, whether filing income tax as an individual, HUF, or other type of entity.
• After selecting the taxpayer category, the e-filing portal will suggest a specific ITR form. Such as ITR-1, ITR-2, ITR-4 etc. Choose the one that aligns with the income sources.
• Select the reason behind the Income tax India e-filing filing, such as regular assessment, claiming a refund, or filing a revised return.
• The e-portal for income tax returns will pre-fill the details in certain sections based on data from employers, banks, etc. However, the taxpayer must review and verify the same to maintain accuracy by editing the incorrect details before proceedings.
• Review and check the ITR displayed in the dashboard, such as income, deductions, tax liability, etc., to ensure that all data are correct before proceeding further.
• Make a payment of any tax dues via the e-payment gateway if applicable.  

Process for e-filing Offline ITR

Here, given below is the process for e-filing offline ITR through the e-filing portal:

• Firstly, visit the Income Tax Department's official website to download the appropriate ITR form. Then, download the correct category of ITR form using the Excel or Java utility available on the e-filing portal.
• Secondly, fill out the specific form downloaded on your computer. This filing of details regarding income tax does not require an internet connection.
• Once you have completed the form and entered the details, save it in XML format. This format is the official one required for uploading to the e-filing portal.
• Lastly, upload the XML file to the e-filing portal by login into the account on the e-filing portal. Thus, follow the appropriate section to upload and file your ITR.

Steps for E-Verification

After completing ITR filing through the e-filing portal, the next step is to e-verify the return you have filed before the Department of Income Tax through the e-filing portal. This is an essential part of the e-filing income tax process, as it gives confirmation or authenticity in submission to the Income Tax department. The steps for e-verification of ITR are as follows:

1. Log in to your respective income tax e-filing account by visiting the official income tax department e-filing portal.
2. Select the option for the e-verification process, such as Aadhar card otp, electronic verification code, or sending a signed ITR-V.
3. Thus, enter the 6-digit OTP number sent to the registered mobile number to validate the same. On successful submission, the ITR will be verified.

NOTE:To e-verify ITR filing through the Aadhar card, one must ensure that the mobile number is linked to Aadhar along with the PAN card.

How to Download an Income Tax Return?

After completing the income tax return filing, one should download the income tax return from the e-filing portal by following the given below steps:

1. Visit the official website of the income tax department, i.e., the e-filing portal.
2. Next, log in with your ID to reach your income tax return filing dashboard.
3. Select the e-file, click on the Income Tax Returns button, then view filed returns to see e-filed tax returns.
4. Click the download button for the relevant assessment year to download income tax return filing.

Due Dates for Filing ITR

The due dates for filing ITR in India are on or before 31^st July of each financial year. However, taxpayers filing their return after exceeding the due date or last date will have to pay interest under Section 234A and a penalty under Section 234F.

Income tax return filing due dates for 2023-24 (unless extended) are as follows:

1. The due date for individuals/HUF/AOP/BOI is 31^st July 2024.
2. For businesses that require auditing, the due date is 31 October 2024.
3. For businesses that require the transfer of pricing report, the due date is 30^th November 2024
4. The revised return due date is 31^st December 2024.
5. The belated or last return due date is 31^st December 2024.

Penalty for Filing of ITR After Due Date

Failure to file an income tax return after the due date has several consequences, such as a penalty for late filing of income tax. The penalties for late income tax return filing vary from income to income earned by individuals and businesses.

However, if the ITR is filed after the statutory deadline, an interest of 1% per month on unpaid tax will be liable. In case of late filing, according to section 234F of the Income Tax Act, a late fee of Rs.5000/—shall be charged if net taxable income exceeds Rs.5 lakhs for the respective financial year. Whereas, if the total income is below Rs.5 lakh, the late fee will be limited to Rs.1000/-.

Note: Individuals with taxable income below the basic exemption limit who file an ITR solely to claim a refund are exempt from penalties for late filing.

Old and New Tax Regime Comparison

Below is a comparison between the old and new tax regimes from the perspective of individual total annual income.

1. Under the old tax regime, annual income up to Rs. 2.5 lakh is exempt from tax. In the new tax regime, this exemption is increased to Rs. 3 lakh.
2. For annual income between Rs. 2.5 lakh to Rs. 5 lakh, the tax rate is 5% in the old regime. In the new regime, income between Rs. 3 lakh to Rs. 7 lakh is taxed at 5%.
3. Annual income from Rs. 5 lakh to Rs. 10 lakh is taxed at 20% in the old regime. In the new regime, income between Rs. 7 lakh to Rs. 10 lakh is taxed at 10%.
4. In the old regime, annual income above Rs. 10 lakh is taxed at 30%. In the new regime, income between Rs. 10 lakh to Rs. 12 lakh is taxed at 15%.
5. In the new tax regime, annual income between Rs. 12 lakh to Rs. 15 lakh is taxed at 20%, and income above Rs. 15 lakh is taxed at 30%.

Easily efile your ITR via Enterslice

Stay ahead of the curve and ensure financial compliance by e-filing your income tax return via Enterslice. Avoid penalties and interest by filing income tax on time through our expert professionals. Choosing Enterslice to e-file your income tax return in India will provide a hassle-free experience. We provide a user-friendly platform to simplify the ITR filing procedure, making it quick and efficient.

We have a seasoned tax professional who provides expert assistance in filing income tax returns accurately and maximizing deductions. Additionally, we prioritize the security and confidentiality of customers' data, ensuring that personal and financial data are well protected.

Our services offer affordable pricing and transparent fees compared to the market, plus we don't have any extra hidden charges. Thus, experience the convenience and reliability of e-filing income tax returns with Enterslice.

Services Offered by Enterslice

Enterslice offers comprehensive tax services, covering everything from income tax return filing to advisory under one roof. Here given below is the list of services offered by Enterslice:

• ITR Filing for Income from Capital Gains
• ITR Filing for Small Taxpayers
• ITR Filing for Business Owners
• ITR Filing for Non-resident Indians
• ITR Filing for F&O Traders
• Income Tax Consultation
• ITR Filing for Trusts/Societies
• ITR Filing for Cryptocurrency Gains
• Online ITR Form Filing and Submission
• Tax Appeal and Litigation
• Tax Audit and Assessment
• Handling Tax Demand
• Tax Demand Intimation and Response Assistance
• Foreign Income and Asset Disclosure Guidance
• Error Rectification in Filed ITR
• Tax Filing and Optimization Consultation
• Post-filing Support and Consultation
• Deduction and Exemption Claim Assistance