All you need to know about Income Tax Return

Tax is a central element to the revenue generation system of the Indian government. Among the multitude of taxes present in the system, income tax is the one that deals with the taxation of the earning of every individual, firm or organisation in a financial year. The earning or income could be in the form of regular wages, interest, dividends, capital gains or any other profits.

Income Tax Return is a proof that you have paid your income tax. It contains details about your annual income and the amount of tax you have paid. Every year, Indian citizens who earn taxable income have to file Income Tax Return (ITR). Filing ITR will help you in getting a refund in case you pay more tax than what you are required to pay. If you fail to file your ITR, you might have to pay penalty or face legal consequences.

Income Tax:

Income Tax is a kind of tax that is imposed by the government directly on the annual income of an individual. Income tax is imposed on both earned and unearned income. Earned income includes salary, wage, etc., and unearned income includes interest, rent, etc. Every Indian citizen earns an income have to pay income tax at the end of the financial year. The interest rate varies depending on the income tax slab.

Income Tax Slabs in India for FY 2017 – 2018

For Individuals below 60 years:

Annual Income Tax Rates Education Cess Secondary and Higher Education Cess
Upto 2,50,000 Nil Nil nil
2,50,001-5,00,000 5% 2% of IT 1% of IT
5,00,001 -10,00,000 12,500 + 20% 2% of IT 1% of IT
Above 10,00,000 1,12,500 + 30% 2% of IT 1% of IT

 

 For Individuals over 60 years and below 80 years:

Annual Income Tax Rates Education Cess Secondary and Higher Education Cess
Upto 3,00,000 Nil Nil nil
3,00,001-5,00,000 5% 2% of IT 1% of IT
5,00,001 -10,00,000 10,000 + 20% 2% of IT 1% of IT
Above 10,00,000 1,10,000 + 30% 2% of IT 1% of IT

 

For Individuals 80 years and above

Annual Income Tax Rates Education Cess Secondary and Higher Education Cess
Upto 5,00,000 Nil Nil nil
5,00,001-10,00,000 20% 2% of IT 1% of IT
Above 10,00,000 1,00,000 + 30% 2% of IT 1% of IT

 

Income Tax Return is a declared form which lists out the particulars of income and the taxes paid on the same by an individual, firm or organisation in a financial year. This in turn can be presented to the Income Tax Department. There are different forms designated to file the IT returns, depending upon the different status and nature of income. These forms are readily available on the online portal of the Income Tax Department of India.

Currently nine different forms are available for filing of income tax returns. They go from ITR-1 to ITR-7 and also include the ITR-4S and ITR-V.

Before filing his Income Tax Returns online, there are a few pre-requisites which an employee has to take care of. They are

  • Bank statements
  • Form 16
  • Copy of the previous year’s return
  • PAN Details
  • Aadhar Details
  • Investment Details

 

Having the documents ready, the following steps need to be observed to allow for a smooth filing of income tax return online. ITR – V – If the process of filing has been completed successfully, the website will flash an appropriate message and you will be able to download the acknowledgement form, the ITR-V

Apart from the official site operated by the Government of India, there are many private portals that allow filing of returns and charge a specific fee depending upon the service level they offer.

Steps to file Income Tax Returns Online;

  • Visit the IT returns filing web-link;

https://www.incometaxindia.gov.in/Pages/tax-services/file-income-tax-return.aspx

 

  • Download the ITR preparations software from the ‘downloads’ page on your laptop /PC for the assessment year.
  • Prepare the returns
  • Login to the above e-filing website with your login-id and password
  • Go to e-file and click on the option, ‘upload return’
  • Select the proper ITR and assessment year
  • Upload DSC (Digital Signature certificate) if applicable
  • Click on submit button to submit your returns. 

  

Filing of Income Tax returns on time is immensely beneficial. Especially when buying a land or property as it is often requested by the IT authorities to produce your IT clearance certificate. Though it might be a tedious process to keep a track of every nifty detail needed in order to file the proper details for the Income Tax Return, it actually helps a lot when it is done in the earnest and ahead of time, preferably, online

  1. Online filing of returns ends by July 31 or every financial year, and being a month or two in advance in filing the income tax returns actually ensures one saves time and anxious moments when the last date for filing IT returns approaches.
  2. In case one has missed filing tax returns for the previous year, every additional day till July 31 increases the penal interest. Thus, filing a tax return in advance is very advisable.
  3. Filing time returns creates that all important favourable financial history – Online filing of the income tax returns actually creates a history of your financial records with the tax department in a much faster and easier way. This history is favoured by a lot of organisations, be it financial or otherwise, which you might have a business relationship with in the future.
  4. Proof of financial record – Having an ITR-V form is always handy, since one can readily furnish the same as a proof for any kind of financial liability or opening a line of credit.

 

Income Tax Returns – Frequently asked Questions

Questions Answers
Should a self-employed professional, if whose income this year is comparatively lower, than the previous two years, file income tax returns? No, in this case, he need not have to file his IT returns
If an employee has paid advance taxes and has no dues or refunds, does he have to file IT returns? Yes. The employee still has to file his IT returns
How beneficial it is to file IT returns regularly? It is extremely helpful especially when buying your own land or accommodation to have paid your IT returns regularly.
How long would an income tax refund take? It may take close to 1 year to receive the IT refund, if any.
Can I file income tax return after the due date? Yes. IT returns can be filed after due date.