Everything About Income Tax Return Filing in India

Do you know over 8.18 crore Income Tax Returns (ITRs) filed for A.Y. 2023-2024? Looking at India’s population, this number is less. To encourage and educate the youth of India for filing ITR, we are writing this article on income tax return filing in India so that we can break this record in the upcoming assessment year.

Let’s learn more in detail

An Income tax return is a form of income tax department where you are supposed to furnish your income details. This form declares your taxable income, tax liability and tax deduction claims, if any. Salary employees, self-employed, corporations, and Hindu Undivided Families (HUFs) must file income tax returns every year before the due date. Otherwise, a penalty may be imposed.

Who is Responsible for Income Tax Return Filing in India

Following are the categories of individuals who are eligible for Income Tax Return Filing in India

An assessee whose annual income exceeds ₹ 300,000
Individual/HUF residents holding assets outside of India
An individual/organization comes under the purview of Section 139 (4B) (ITR 7)
An individual claiming relief under sections 90 or 90A
An individual who is a resident of India and has signing authority over any account situated abroad
Businesses exceeding 1 Crore of annual turnover
An assessee who is obliged by the Act to provide an audit report stated in sections 10(23C) (IV), 10(23C) (v), 10(23C) (VI), 10(23C) (via), 10A, 12A (1) (b), 44AB, 80IA, 80IB, 80IC, 80ID, 80JJAA, 80LA, 92E, or 115JB
AOP, BOI, Local Authority (ITR 5), Artificial Juridical Person, or Cooperative Society that does not fall under the terms of Section 44AB

Different Types of Income Tax Return (ITR) Forms for Income Tax Return Filing

In total, there are nine types of Income Tax Return forms, aka ITR forms, and each of the forms has a different purpose. Following are the details on all ITR forms along with their purpose:

ITR 1 or Sahaj

This form is for individuals who earn an annual income of less than Rs. 50 lakh from salary, pension, and one house property. The income in the agriculture profession is up to Rs. 5000.

ITR 2

If you have earned money from selling property or assets, then you should file a return form from ITR-2. You can also employ this form if you have income from foreign countries.

ITR 3

The ITR-3 is designed specifically for individuals and Hindu Undivided Families (HUFs) who are in business or any profession that requires maintaining books of accounts.

Under this category, individuals in the following professions are covered, whose income is calculated based on their actual profits.

Lawyers
Chartered accountants
Doctors
Engineers

Additionally, suppose you are engaged in full-time employment and have other sources of income, such as freelancing or part-time business. In that case, you can utilize the ITR-3 form to file income tax returns.

ITR-4

ITR-4 is for small business owners who maintain only a sales ledger expressed in approximate volume instead of books of accounts. This category includes online sellers, wholesalers, manufacturers, traders, and retailers

Besides, freelancers engaged in content writing, designing and vlogging must file ITR-4 forms.

If you are someone who is engaged in full-time employment as a freelancer or part-time business, then you are eligible to file an ITR with this form.

ITR-5

The ITR-5 form is particularly useful for Firms, Cooperative societies, Local authorities, Artificial Judicial bodies, and Bodies of individuals to file income tax returns.

ITR 6

ITR 6 is particularly for companies, except the companies that do not get exemptions under Section 11.

ITR 7

Form 7 of ITR is for entities claiming exemption. Colleges, universities, scientific research institutes, charitable organizations, religious trusts, and political parties can file income tax returns in India with this form.

Modes of Income Tax Return Filing in India

If you are wondering how to file an income tax return (ITR), the government has provided two options: online or offline mode.

Online Mode

To proceed with income tax return online, visit the official website of the income tax department for e-filing income tax. Calculate your tax liability before you visit the portal and start the e-filing process.

Fill in the required details, upload necessary documents, and then validate the filings.

Offline Mode

Download the relevant ITR form from the official income tax e-filing website. Open the downloaded ITR form on your computer and fill in the necessary details. Once you have done this, generate a JSON file of the ITR form and save it on your local disk. Submit your ITR form by uploading a JSON file on the official website.

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