Does income tax filing scare you out because you are clueless about how to file it? Here’s a complete guide to ease the process of filing.
Income tax return sounds like a tricky word for many. In simple words, an income tax return is used to report your gross taxable income for a given financial year.
The ITR or income tax return comprises the income from all sources. It is mandatory for people who earn a certain amount to file income tax returns. The IT returns are helpful in claiming the deductions and determining annual tax liability.
Companies, HUF, and self-employed people have to file income tax returns at the Income Tax Department of India. The last date of filing an income tax return is 31 December 2021 and 15 February 2022. If the Assessee doesn't file an ITR by the due date, then one might have to face heavy penalties.
Is it necessary to file an ITR?
According to the laws, filing an ITR in India is mandatory if an individual income is more than the exemption limit. Income tax rate is pre-decided for the taxpayers. A delay in filing ITR will cause you a heavy penalty as well as deprive you of getting a visa or loan.
Latest Update:
The timelines for certain direct tax compliances has been extended by CBDT according to the circular issued on 9th September 2021 for AY 2021-22.
1. Due Date Extension of ITR Filing
i) ITR filing not covered under audit by a taxpayer is extended from 30th September 21 to 31st December 21
ii) Tax audit and corporate Assesse cases ITR filing is extended to 15th February 22
iii)Transfer pricing ITR filing is extended to 28th February 22
iv) ITR filing of revised return for is extended from 31st December 21 to 31st March 22 for year 2020-21
1. Audit Report Furnishing
i) Due date for audit report furnishing is extended to 15th January 22
ii) Due date for audit report furnishing for transfer pricing cases is extended to 31st January 22
Documents Required to File Income Tax Return
The documents required to file an Income Tax Return are:
• Pan card
• Statement of Bank
• Certificate of TDS
• Form 26AS
• Form 16A, 16B, 16C
• Salary Payslips
• Interest certificates
• tax-saving investments proof
Different Types of ITR Forms
For filing income tax returns, seven types of forms are required.
ITR 1
Individuals who earn upto Rs.50 lakh from a salary, pension, house property, interest, etc., are eligible to use this form.
ITR 2
An individual whose income is not from the profit of a business is eligible to use this form.
ITR 3
An individual whose income is from the profit of a business is eligible to use this form.
ITR 4
Individuals who earn less than Rs.50 lakh from a profession or under Rs2 crore from the income of a business are eligible to use this form.
ITR 5
Associations, limited liability partnerships, or partnerships must use this form for reporting their income.
ITR 6
Any company that is filing tax for the financial year in India is supposed to use this form.
ITR 7
Entities, including charitable trusts, universities, political parties filing income tax returns, are supposed to use this form.
What is 26AS Form and its Importance?
Form 26AS is essential as it shows the proportion of tax deducted on payments made by individuals. It enables the taxpayer to claim refunds for overdue or additional tax payments.
The new FORM 26AS has been updated to ease filing income tax returns online.
1. Statements of financial transactions is a key feature of 26AS form. It denotes the list of statements where the taxpayers recall all the major financial transactions they have made, which would be beneficial to them while filing ITR.
2. The 26AS new format displays Aadhar card details, date of birth, email and house addresses, and mobile number.
3. It indicates the history of tax proceedings whether they are pending or completed with the tax authorities.
Who Should File an ITR?
It is necessary to file an income tax return in India. Reasons, why you should file an ITR, is given below:
• Individuals falling within the respective tax slabs
• If it's an Enterprise or Firm, irrespective of the profit or loss they made in the financial year.
• If you are a resident of India having an asset or financial interest in business outside India.
• If a person applies for a loan or a visa
• If you are a resident of India and have signing authority in a foreign account.
• If you need to claim a tax refund
• If you are an NRI and derive income through sources in India, you are liable for Income Tax and Income tax returns.
• If an individual receives income from property under charitable or religious purpose, news agency, educational or medical institution, trade union, a not-for-profit university or educational institution, a hospital, anybody or authority.
How to File an Income Tax Return?
Income tax returns can be filed by visiting the official website of the Income Tax Department. But firstly, the registration process must be completed before filing an ITR online.
Moreover, the Income Tax Department of India has recently updated its online e-portal for income tax returns. And this made the process of e-filing even easier. Steps to file an income tax return are mentioned step by step below.
• Stage 1: Income Tax rules prescribed the provision, and on that basis, you can find out your income tax liability.
• Stage 2: Get a summary of your TDS payment by referring to form 26AS for the different quarters of the assessment year.
• Stage 3: determine the category in which you belong on the basis of the eligibility criteria provided by the Income Tax Department (ITD),
• Stage 4: Visit the official website of the Income-tax department e-filing portal
• Stage 5: Register yourself using the 'Register' button in case you are a new user.
• Stage 6: If you have already registered, then you can just click on the 'Login' button.
• Stage 7: Then, tap on the button 'File Income Tax Return' option under the 'e-file' tab.
• Stage 8: Choose the category from the list under – individual, Hindu Undivided Family (HUF), and so on.
• Stage 9: Choose the form that is applicable to you in ITR.
• Stage 10: You will be required to enter the details of your bank account, and If you have already provided, you will have to pre-validate the details.
• Stage 11: Thereafter, you will be redirected to a new web page where you can check the pre-filled details of your ITR. Check the details, confirm the same, and validate it.
• Stage 12: Once you complete the process, verify the income tax returns and send a hard copy to the Income Tax Department.
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Penalty of Filing Late ITR Form
Huge penalties are levied on the taxpayer in case of late ITR filing or not filed by the due date. One can face penalties between Rs.1000 to Rs. 10,000 depending on when the returns are filed if your income is below 5 lakhs.
Whereas individuals with income above 5 lakh can be penalized between Rs.5000 to Rs.10,000.
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Due Date of ITR
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Income below 5 lakh
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Income above 5 lakh
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Between 1 September to 31 December
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Rs.1000
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Rs.5000
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Between 1 January to 31 March
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Rs.1000
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Rs. 10,000
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Benefits of Filing ITR on Time
There are multiple benefits of filing income tax returns on time. Some of them are:
Hassle-free Loan
It’s easy to get various kinds of loans like home loan, car loan etc by filing the income tax returns. As banks needs a copy of ITR to provide loan.
TDS Refund
To claim the return from Income Tax Department, you will have to file an ITR to claim it.
Processing of Visa
Visa application requires you to provide a copy of income tax returns for some past years. Without it, it gets difficult to acquire visa.
Additional Interest Rates can be Avoided
A consistent record of filing an income tax return will help you to avail home loans.
Shake off the Penalty
Filing an ITR on time will protect you from getting levied with the penalties which you can avoid it and save your hard earned money.
Key Takeaway
Individuals must pay tax who earn above a certain income. In addition, a certain limit is provided by the IT department for taxpayers. Late filing of ITR can cause you a penalty, so it’s better to file the returns on time.
FAQ’s
• Who are the Expert's who’ll be filing my return??
Easifyy taps into its Expert network and puts you in touch with a qualified CA. These Expert's bring a combined experience of 40 years in foreign taxation.
• What is the due date to file business returns??
In case a tax audit is applicable the due date is 31stOctober otherwise it is 31st July..
• I am running a business. I wish to know what is advance tax and when do i need to pay it??
The assessment of income of a year can be made only after the year has passed, advance tax is pre-payment of your tax liability in the year it is earned. If the tax liability is more than Rs 10,000 in a financial year then advance tax needs to be assessed of income of a year can be made only after the year has passed, advance tax is pre payment of your tax liability in the year it is earned. If the tax liability is more than Rs 10,000 in a financial year then advance tax needs to be paid by the assessee. The due dates are • 15th June(15%) • 15th September(45%) • 15th December (75%) • 15th March (100%) Under this plan, Easifyy experts will help you access your advance tax liability and assist you in its timely payment. e paid by the assessee. The due dates are.
• Can I file a revised return to correct a mistake in original return filed??
Yes, the return can be revised within a period of one year from the end of the relevant assessment year or before completion of the assessment whichever is earlier. Filing of revised returns is not part of the plan. Plan buyer is required to provide full and accurate details to avoid the need for any rectification in the originally filed return..