Know Everthing About Income Tax Return

Income Tax Return (ITR) is a document which an individual needs to submit to the Income Tax Department of India. It consists of the details about the income of the individual and the taxes to be paid during the year. Details filed in ITR should pertain to a particular fiscal year, i.e. beginning on 1st April and ending on 31st March of the next year.

Income tax is a type of tax that the government of India charges on the income earned during a financial year by individuals and businesses. Taxes offer revenue to the government which they utilize for developing infrastructure, subsidies to the farmer or agriculture sector, offering healthcare, education, and other welfare schemes of the government. There are mainly two types of taxes which are direct taxes and indirect taxes. The tax calculation is done on the basis of the income slab rates applicable during that fiscal year.

Advantages of filing income tax returns

There are various benefits of filing income tax returns on time which are as follows:

Filing the income tax return on time will help the individual to easily get their loan approved. They can easily get a vehicle or home loan. All major banks may need you to submit a copy of ITR as proof of income statement. This is a compulsory document for any kind of loan approval.
The individual can claim a tax refund when tax has been deducted (TDS) from your income even when your total taxable income is less than the necessary exemption limit and you have zero tax liability for that year. To claim a TDS refund, an income tax return file is mandatory
ITR can also be used as an individual’s income and address proof.
Most embassies and consultants ask you to provide copies of your tax returns for the past couple of years at the time of applying for a visa. Since income tax return files are mandatorily required documents, it is always recommended to file your ITR timely.
Individuals will be able to carry forward losses to subsequent years if they file the return within the original due date, which can be exercised to set off against the income of the following years. This means you can remove certain losses from the relevant income which will assist you to decrease your tax liability of the future income. This is not possible without filing ITR.

Filing the income tax return on time may avoid penalties. If the individuals did not file their tax returns according to the income tax act then the tax officer has all the right to impose a penalty.

Frequently Asked Questions

Who should file the income tax return?

• Income tax has to be paid only by individuals or businesses that fall within certain income brackets, as per the Income Tax Act. Mentioned below are businesses or entities that are needed to compulsorily file their ITRs in India are as follows: • Individuals up to 59 years of age, whose total income for a financial year surpasses Rs 2.5 lakh must pay tax. In the case of senior citizens whose age limit ranges from 60-79 years, the income limit exceeds 3 lakh and for super senior citizens (aged 80 and above) the income limit exceeds Rs. 5 lakhs are liable to pay taxes. • All registered companies or business establishments that make income, despite whether they have made any profit or not through the year must pay tax. • Individuals who want to claim a refund on the excess tax deducted or income tax they have paid. • Persons who have financial interest entities or assets that are situated outside India are liable to pay tax. • Foreign companies or businesses establishment that enjoy treaty benefits on transactions made in India must pay income tax. • Non-resident Indians (NRIs) who earn more than Rs. 2.5 lakh in India in a single fiscal year must pay tax. It is compulsory to file your income tax returns if your income is more than the basic exemption limit, according to the tax laws approved in India. The rate for income tax is pre-decided for taxpayers.