Under the Income Tax Act 1961, an individual who generates an income in the country, will have to pay taxes to the Indian Government collected by the Income Tax Department. The taxable amount is dependent upon the income generated by the individual. The Income Tax should be filed by every individual or business (MNCs, retail shops, etc) in every financial year.
Earnings in the form of Rent, business profits, salary, interest, etc are accountable in Income Tax. An individual has to file an Income Tax Return every year before a specific date. In case, an individual fails to file an ITR before the deadline, there are penalty charges to be paid accordingly. Thankfully, with the introduction of e-filing services, filing ITR has become easier than ever, you can even use an income tax calculator to know your tax liability.
Who all will have to Compulsorily File an ITR in India?
Sections 80 C-80 U mention the exemptions to Income Tax Return filing. Apart from that everyone including –
- Officially registered companies that generate revenues are liable to pay taxes irrespective of the profit they made in a year.
- Entities who want to claim a refund of the excess Income Tax paid by them in a financial year.
- The Income Tax Act 1961, also covers tax on the income generated by the citizens globally.
- Foreign Companies operating and generating revenues under the Treaty signed.
- A non-resident of India who is generating income of more than 2.5 Lakhs in a year.
An individual who earns less than 2.5 Lakhs per annum is exempted by the government from the Income Tax. The Income Tax Act also specifies exempted income limit according to the age of an individual –
| Up to age 59 | 2.5 Lakhs per annum |
| 60-79 years | 3 Lakhs per annum |
| 80 years and above | 5 Lakhs per annum |
How to File an Income Tax Return?
Filing an Income Tax Return is considered a stressful and tiring activity by every tax-paying individual. A lot of citizens pay penalties on taxes, not because they don’t want to abide by the taxation rules but because of the process of filing for a tax.
Here is a quick checklist that will ensure a smooth sail in Income Tax Return filing –
1. Documents – To file an Income Tax Return, you will be required to have certain documents in hand. It is advisable for you to collect these documents beforehand.
- PAN Card – The PAN card number will be used as a User ID on the Income Tax portal.
- Aadhar Card – It will act as an Identity Proof
- Tax Return Copy – The entities who have been religiously filing ITR for more than a year will also need a copy of the tax return of the previous year.
- Bank Statements – You will require bank statements of all your bank accounts that are actively operating.
- Form 16
- Bank statement of interest earned on your savings accounts in a year
- Tax Deducted Source Certificates (if applicable)
2. Prerequisites – To file an Income Tax Return, one should complete the primary procedure –
- Go to the official website of the Income Tax Department. http://incometaxindiaefiling.gov.in
- Create your account on the portal by registering your mobile number and email address.
- On the next page, Enter your Aadhar Card number and click verify.
- Select the application form like ITR – 1’s (SAHAJ) for salaried employees.
- Click ‘done to complete this process.
3. Filing the ITR – Income Tax e-filing has made the lives of tax-payers comfortable and convenient.
- It is advisable to click ‘save details’ on every page to eliminate the risk of losing data.
- Download Excel or Java Utility from the left-hand corner of the screen, to work on ITR filing in offline mode as well. Once connected to the Internet, the prefill option will automatically update your information on the portal.
- Download the 26AS form from the portal. The 26AS form includes details like tax already paid, tax credit, etc.
- For salaried individuals with no additional source of income, Form 16 declared by the employer will be the format for Income Tax Return.
- Mention additional sources of income and deduction to be claimed.
4. Verification of ITR – The Income Tax Return procedure isn’t completed and valid, until and unless you verify the ITR. The verification of Income Tax Return can be done physically or virtually.
- To verify Income Tax Return physically, you will have to get a printout of ITR-V acknowledgment, sign the document (in blue ink) and submit it to the Centralized Processing Centre based in Bangalore. The document has to be submitted within 3 months of ITR filing.
- Virtual verification of Income Tax Return can be done on the official portal of the Income Tax Department.
