Common Questions While Filing Income Tax Return

July 28, 2023

Understanding Income Tax Return (ITR) Filing

An Income Tax Return (ITR) is a form that taxpayers file with the tax authority to report their income and tax payments. The ITR form is used to calculate the taxpayer’s tax liability, schedule tax payments, or request refunds for the overpayment of taxes.

In India, the Income Tax Act, 1961, and the Income Tax Rules, 1962, obligate citizens to file returns with the Income Tax Department at the end of every financial year. These returns should be filed before the specified due date. Every Income Tax Return Form is applicable to a certain section of the Assesses. Only those Forms which are filed by the eligible Assesses are processed by the Income Tax Department of India.

Different types of ITR forms and their applicability

India’s Income Tax Department categorizes taxpayers based on their income sources and assesses the category. There are seven types of ITR forms for individuals: ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, and ITR 7. ITR 1 is for residents with income from salaries and other sources, ITR 2 for those without business income, and ITR 4 for those using the presumptive taxation system. ITR 3 is for individuals or Hindu Undivided Families with income from proprietary businesses or professions, ITR 5 for firms, LLPs, AOPs, and BOIs, and ITR 6 for companies not claiming exemption under section 11. ITR 7 is for persons including companies required to furnish returns under sections 139(4A), 139(4B), 139(4C), or 139(4D).

In India, the due date for filing ITRs is usually July 31st of the assessment year. However, for the financial year 2022-23, the due date for filing ITRs has been extended to September 30th, 2023.

It is important to note that the due dates for filing ITRs can vary depending on the type of taxpayer and the country of residence. Taxpayers should consult with their best Income Tax Return Filing Agency in Kochi, Kerala, Chennai, India, to determine the specific due dates that apply to them.

Here are some general FAQs which are useful in uploading ITR:

Do I need to file an income tax return even if my taxable income is below the threshold limit?

Yes, you do. If your total aggregate income is up to ₹2.5 lakhs, you don’t have to file a return. However, if your income exceeds ₹2.5 lakhs, return filing becomes mandatory. Even if, after deductions and rebates, your taxable income is reduced to an amount below ₹2.5 lakhs, you will have to e-file an income tax return stating your income, its sources, the available deductions, and rebate. Though you will not have to pay tax, return filing is mandatory

Which income tax form should I use for filing income tax?

The form to be used for filing income tax returns depends on the source and amount of income. For example, ITR-1 (Sahaj) is for individuals having income from salary, one house property, family pension income, agricultural income (up to ₹5000/-), and other sources, which include interest from savings accounts, deposits, income tax refund, enhanced compensation, and any other interest income.

What are the types of income that shall not form part of the total income?

Some types of income that are exempt from tax and do not form part of the total income include agricultural income up to ₹5,000, long-term capital gains on sale of equity shares or units of equity-oriented mutual funds, dividend income up to ₹10 lakhs, and interest income up to ₹50,000 for senior citizens.

What precautions should I take while filing the return of income?

Some precautions to take while filing the return of income include downloading AIS and Form 26AS and checking the actual TDS / TCS / tax paid, reconciling any discrepancies with the employer / tax deductor / bank, and carefully studying the documents to be referred to when filing the ITR, like bank statement / passbook, interest certificates, receipts to claim exemptions or deductions, Form 16, Form 26AS (Annual Information Statement), investment proofs, etc.

How can I e-verify my income tax return?

There are several ways to e-verify your income tax return, including using Aadhaar OTP, net banking, bank account-based validation, and demat account-based validation.

What are the consequences of not filing an income tax return?

If you are required to file an income tax return but fail to do so, you may be liable to pay a penalty of up to ₹10,000. Additionally, you may not be able to carry forward losses or claim refunds in future years.

Filing an Income Tax Return is an important obligation for taxpayers to fulfill. Taxpayers should be aware of the different types of ITR forms and their applicability, as well as the due dates for filing ITRs, to avoid any penalties or fines. We are the best Income Tax Consultants in Kochi, Kerala, Chennai, India, we are a team of professional who can help you with all your Income Tax Return related queries.