Income Tax Return Filing

Income Tax Return Filing

Tax Pain: Nothing hurts more than paying income tax, except when you don't have to pay it.

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The Income Tax Return (ITR), refers to the form that taxpayers use to provide details about their income earned and the applicable taxes to the income tax department. We have seven different forms established by the Income Tax department: ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7) which are designed to accommodate various types of taxpayers, including individuals, HUFs, and companies.

The specific ITR form that a taxpayer should use depends on factors such as the:

File ITR in India If:

Additionally, file ITR even if income is below exemption limit, but meet these conditions:

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What are the types of Deductions under Income Tax?

Section 80C – Deductions on Investments

Section 80C is a popular provision that allows taxpayers to reduce their taxable income by investing in specified schemes or incurring eligible expenses. Individuals and HUFs can avail a maximum deduction of Rs 1.5 lakh per year from their total income under this section. However, companies, partnership firms, and LLPs are not eligible for this deduction. Section 80C includes subsections such as 80CCC, 80CCD (1), 80CCD (1b), and 80CCD (2). It’s important to remember that the overall limit for claiming deductions under these subsections is Rs 1.5 lakh, except for an additional deduction of Rs 50,000 allowed under section 80CCD(1b).

Section 80TTA – Interest on Savings Accounts

Individuals and HUFs have the option to claim a maximum deduction of Rs 10,000 on interest income earned from their savings account with a bank, co-operative society, or post office. However, it’s important to include the interest from a savings bank account in the category of other income. Please note that Section 80TTA deduction cannot be availed on interest income from fixed deposits, recurring deposits, or interest income from corporate bonds.

Section 80TTB – Interest From Deposits Held by Senior Citizens

Under Section 80TTB, senior citizens (age 60 or above) who hold deposits with banks, post offices, cooperative societies, or similar institutions can claim a deduction of up to Rs 50,000 on the interest income earned. Additionally, the TDS deduction limit under Section 194A for senior citizens has been increased to Rs 50,000. It is important to note that no deduction under Section 80TTA is allowed in such cases. Furthermore, senior citizens aged 75 and above who solely receive pension and interest income are exempt from filing an income tax return (ITR) as tax is deducted at source by banks.

Section 80GG – Income Tax Deduction on House Rent Paid

Deduction available is the least of the following:

Section 80E – Interest on Education Loan

Individuals can claim a deduction for the interest paid on loans taken for higher education. This deduction applies to loans taken for themselves, their spouse, children, or a student for whom they are a legal guardian. Under section 80E, the deduction is available for a maximum of 8 years, starting from the year of repayment of interest or until the entire interest is paid off, whichever comes first. There is no limit on the amount that can be claimed.

Section 80EEA – Interest on Home Loan For First-Time Home Owners

Section 80EEA offers an additional deduction for interest paid on a home loan. While Section 24 allows an exemption of up to Rs 2 lakh on home loan interest, this section provides an extra deduction of Rs 1.5 lakhs for homebuyers who have taken a home loan and pay interest on it. FY 2017-18 and FY 2016-17: Taxpayers can claim this deduction if they have taken a loan in FY 2016-17. The deduction under section 80EE is applicable to individuals who own only one house property at the time of loan sanction. The property’s value should be below Rs 50 lakh, and the home loan amount should be less than Rs 35 lakh. The loan must have been sanctioned between 1 April 2016 and 31 March 2017. FY 2013-14 and FY 2014-15: Taxpayers could claim a deduction under this section for a first-time house valued at Rs 40 lakh or less. The maximum deduction allowed under this section is Rs 1 lakh.

Section 80D – Deduction on Medical Insurance Premium

As an individual or HUF, you can claim a deduction of Rs. 25,000 under section 80D for insurance covering yourself, your spouse, and dependent children. Additionally, you can claim an extra deduction of up to Rs. 25,000 for insurance of parents who are below 60 years of age. If your parents are 60 years or above, the deduction amount is Rs. 50,000. In the case where both the taxpayer and parents are 60 years or above, the maximum deduction available under this section is Rs. 1 lakh. For preventive health check-ups, a cumulative additional deduction of Rs. 5,000 is allowed.

Section 80DD – Deduction for Medical Treatment of a Dependent with Disability

Section 80DD provides a deduction to resident individuals or HUFs for expenses related to the medical treatment, training, and rehabilitation of a handicapped dependent relative. It also includes payments or deposits made to specified schemes for the maintenance of the handicapped dependent relative.

Section 80DDB – Deduction for Specified Diseases

Section 80U – Deduction for Disabled Individuals

A resident individual with a physical disability (including blindness) or mental retardation can claim a deduction of Rs. 75,000. For severe disabilities, the deduction limit is Rs. 1,25,000.

Section 80G – Income Tax Benefits Towards Donations for Social Causes

Donations specified under Section 80G are eligible for deductions of either 100% or 50%, with or without restrictions. Starting from FY 2017-18, cash donations exceeding Rs 2,000 are not allowed as deductions. To qualify for an 80G deduction, donations above Rs 2,000 should be made using non-cash modes.

Section 80GGB & 80GGC – Donations to Political Parties

Section 80GGB: Indian companies can claim a deduction for contributions made to political parties or electoral trusts via non-cash modes. Section 80GGC: Individual taxpayers can claim a deduction for contributions made to political parties or electoral trusts (not available for companies, local authorities, and artificial juridical persons funded by the government).

Section 80RRB – Deduction on Income via Royalty of a Patent

Applicable for individuals who are resident Indians and hold a registered patent under the Patents Act 1970, granted on or after 1 April 2003. This allows for a maximum of Rs. 3 lakh or the actual income received from royalty, whichever is lower.

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What is a GST Certificate & GSTIN?

The GST Certificate is a must-have document that proves your business is officially registered under GST. It includes essential details such as your GST identification number, name, and address, and is required to charge and collect GST from your customers. This valuable document can also be used to avail input tax credits, apply for loans, and participate in tenders.

GSTIN, or Goods and Services Tax Identification Number, is a unique 15-digit alpha-numeric code assigned to each registered GST taxpayer in India. It serves as a distinct identification for the taxpayer for all their tax-related activities.

Income Tax Return Filing FAQ's

What is e Filing of income tax return (ITR)?

All non-senior citizens mandatorily need to file their income tax returns online. The Income Tax Department wants you to fill out the income tax return, which spills the beans on your income and taxes from April Fools’ to March Madness. There are seven different forms to choose from, depending on how fat your wallet is, your source of income and the category to which you, as a taxpayer belong to.

My company deducts TDS. Do I still have to file my ITR?

Yes, TDS and filing a tax return are like two separate legal buddies that need your attention. Paying income tax on your taxable income is a fundamental requirement, as dictated by the provisions of the Income Tax Act. However, alongside this obligation, there exists a distinct process known as filing a tax return. Consider it as a means to demonstrate compliance with tax regulations, ensuring that all applicable taxes have been duly paid.

Which income tax return should I select for e Filing?

And hey, if you’re e-filing with our awesome firm, we’ve got your back. We’ll automatically figure out the correct income tax return form for you. So, sit back, relax, and let us handle the tax form seamlessly!

How do I pay tax to the government?

The Income Tax Department provides a convenient option to pay directly through their website. Using either your net-banking account or debit card, you can utilize challan 280 for the payment. Here’s a breakdown of the payment types for different tax scenarios:

I am a salaried individual and don't have a Form 16. How can I file my tax return?

Not having a Form 16 doesn’t mean you’re out of luck. You can still file your tax return using an alternative method. Simply gather your payslips, as they contain important information about your salary, deductions, and taxes withheld. With this data in hand, you’ll be all set to proceed with filing your tax return.

What is ITR-V?

Once you’ve e-filed your tax return and it’s pending e-verification, you’ll get a one-page ITR-V document. Now, you have two verification options: online or offline. If you go online, there are various methods available. But if you choose offline, here’s the drill: print, sign, and send that ITR-V to the Income Tax Department within 120 days of e-filing.

Is it necessary to attach any documents along with the return of income?

Whether you file manually or electronically—you don’t need to attach any documents like investment proofs or TDS certificates. But hang on to those documents, alright? You might need to show them to the tax authorities if they ask for them during assessments or inquiries. So, keep ’em safe and handy, just in case.

Can I file ITR-1 with exempt agricultural income?

If your agricultural income is up to Rs 5,000, go ahead and file ITR 1. However, if your agricultural income exceeds Rs 5,000, you’ll need to file ITR 2.

If I have paid excess tax, how will it be refunded to me?

If you’ve paid more tax than you owe, you can claim a refund by filing your Income-tax return. The excess amount will be refunded to your bank account through ECS transfer. Just remember, it’s crucial to pre-validate your bank account details before filing your income tax return.

Is it necessary to file a return of income when I don’t have any positive income?

If you’ve experienced a financial loss during the year and want to carry it forward to offset future income, it’s important to file your return before the due date. You can only carry forward the loss if you’ve claimed it in your return by the due date. Here’s a smart tip: Even if you’re not legally obligated to file a tax return, it’s still a good idea to do so. Why? Well, an income tax return serves as proof of your income for various purposes. It can help with loan approvals, visa applications, credit card applications, claiming tax refunds, and even offsetting and carrying forward losses.

Who can file a tax return?

If your total income in the previous year goes beyond the tax-exempt limit, you need to file your income tax returns (ITR) as per Section 139(1) of the Income Tax Act, 1961. This applies to:

Is it mandatory for me to do the ITR e-filing or can someone else do it on my behalf?

Definitely! You can turn to the – chartered accountants and dedicated agencies – to get the help you need. They’ve got the know-how and expertise to navigate the ins and outs of ITR filing. So, why stress over it alone when you can have skilled hands guiding you through the process?

Why should I e-file my income tax return?

E-filing your income tax returns is a must if your income exceeds the basic exemption limit. But wait, there’s more! Even if your income is below the limit, you still need to file ITR if any of the following conditions apply:

What is the penalty for late Income tax e-Filing (ITR)?

Late filing of income tax returns can lead to penalties as per the Income Tax Act. According to Section 234F, if you file your ITR after the due dates, a maximum late fee of Rs 10,000 may apply. However, there’s good news for small taxpayers! If your total income doesn’t exceed Rs 5 lakh, the maximum penalty for late filing will be Rs 1,000. It’s important to stay on top of your tax obligations and file your returns on time to avoid these penalties and interest charges.

What are the documents required for filing ITR?

Who is eligible to file an income tax return?

Individuals/HUFs are required to file their income tax return if their total income exceeds the basic exemption limit, regardless of specified exemptions and deductions. If an individual is a resident and ordinary resident of India, they must file their ITR even if their income doesn’t exceed the maximum exemption limit if any of the following conditions apply:

For entities like companies, partnership firms, and local authorities, there is no basic exemption limit for filing ITR. They are required to file ITR for every financial year.