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Overview of Income Tax Return

03 Aug 2021 0 COMMENT

An Income Tax Return (ITR) is a form that you as a taxpayer must file with the Income Tax Department. The information you put in the return pertains to a particular financial year (i.e. from 1st April to 31st March of the following year).  It is about your income/s and the applicable taxes paid on it, as per the prevailing slab, during the year. Click here to understand the benefits of filing tax returns.

Additional Read: Know more about Income Tax Basics, tax slabs and e-filing

For any individual, the various forms of income could be:

a)       Income from salary or profession, in case of self-employed

b)      Profits from business

c)       Income (such as rent) from a house or commercial property

d)      Income from capital gains (out of the sale of property, shares, mutual funds etc.)

e)      Income from other sources such as interest on deposits, dividends, royalties, lottery wins, etc.

There are seven types of ITR forms, i.e. ITR-1 to ITR-7, which depend on the nature and amount of income and the type of taxpayer, with different due dates.

You must mandatorily file tax returns before the due date specified under Section 139(1).  If there is a reason for the delay in filing the return, you can report it under Section 142(1). If you fail to do so, you may still file a belated return for any prior years, any time until the expiry of one year from the end of the assessment year. However, you stand the risk of being charged a penalty of Rs 5,000 (under Section 271F of IT Act 1961) in case the return is not submitted or submitted after the specified date. If the assessee's income is below the taxable limit, then a penalty is not applicable even if the ITR is filed after the deadline.

You can file an ITR online on the Income Tax e-filing portal or in physical mode at any of the designated offices of the Income-tax department.  India Post also offers ITR filing services at the Common Services Centres (CSC) counters in post offices.

After submitting the tax return, one can quickly check the status online easily on the e-filing website by creating their login account on the Income Tax website. Once the ITR is submitted, the Income-tax Department generates a verification form that allows you to e-verify the filing of your tax returns.  If you are an individual, you can e-verify using the Aadhar number without a digital signature.  For this e-verification, it is necessary to link your PAN and Aadhar.

Additional read: Benefits of filing ITR on time

Benefits of filing ITR

For individual taxpayers, especially self-employed professionals, the income tax returns (ITR) is the only authentic Proof of Income and helps to convey a solid financial position.  Filing ITR on time is a good practice if one intends to avail credit such as loans, credit cards, etc., from lenders. ITRs are also mandatory documents for children's higher studies and the processing of visa applications. Early filing of income tax returns also helps in the early processing of refunds, if any.

Additional read: How to check income tax refund status online

Disclaimer :

ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470.  The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  Investments in securities market are subject to market risks, read all the related documents carefully before investing. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents are solely for informational and educational purpose.