‘Income tax return (ITR)’ is a form in which taxpayers declare details of income, deductions, exemptions, and taxes payable on their taxable income. ITR are governing by the Rules of Income Tax Act, 1961. ITR must be filed in a prescribed format and should be submitted to the Income tax department on or before the due date to avoid the penalties. For filling returns first have to register in https://portal.incometaxindiaefiling.gov.in with the help of valid PAN card.
Different types of ITR forms which a taxpayer has to file:
|ITR-1||Individuals having income from salary, House property & other sources Total income upto 50 lacs.|
|ITR-2||Individuals/HUF not carrying business or profession under proprietorship.|
|ITR-3||Individuals/HUF earning income from proprietorship|
|ITR-4||Opting for Presumptive tax scheme|
|ITR-5||LLP, Firm, Trust, Co-operative society etc. Those covered under ITR-7 shall not fill this form.|
|ITR-6||Companies other than those claiming exemption under section 11 of Income tax act.|
|ITR-7||Requires to furnish details u/s 139 [4A, 4B, 4C, 4D, 4E] of Income tax act, 1961|
- Improve your loan documentation process:
Filing ITR will help you in your loan application, Banks asks for ITR prior to review your application for any kind of loan. Banks ascertain your loan repayment capacity with the help of ITR.
2. Carry forward of Losses:
If anyone has suffered losses in a year, then by filing income tax return he can carry forward that loss for next eight subsequent years to set off the same by the future income as per the provision of Income Tax Act, 1961.This can help reduce the burden of tax in future years.
3. Processing of VISA:
If you are traveling overseas, foreign embassies ask you to furnish ITR return of the last couple of years at the time of the visa interview. Some embassies may ask for ITR receipts of previous three years, while some others may ask for the most recent one. ITR receipts VISA processing team to assess your income and ascertain that you will be able to looking after of the expenses on the trip.
4. Avoid Interest and penalties by Tax Authority:
Any person liable to file tax returns does not file returns within the due date, and then he is liable to pay penalty of up to Rs. 10,000 for non-filing the return within the due date. If you don’t file ITR, then belated return could be filed with extra cost to you lead to extra interest on monthly basis for the remaining tax payable.
5. Claim Income Tax Refund:
There are various banks and Companies do tax deducted at source (TDS) in a financial year. So in order to claim TDS refund, one will have to file the ITR to claim refund of the same.