Introduction
A lot of buzz gets explode during a particular month of a year forcing you to file your income tax return and so on. Infect now a days even government also telecasts advertisement that every citizen should file income tax return. So in this blog we will focus on what is income tax return, how you can file income tax return, what type of ITR is applicable to you, what the last of filing income tax return is and why you should file ITR.
What is Income Tax Return?
An income tax return is basically the declaration of your income. This is the statement where you are supposed to report how much have you earned during a particular financial year, what are your expenses and what are the investments you had made. The form of ITR consist of various details such as bifurcation of income in different heads, deductions to be claimed under various schemes/categories, tax already deducted as TDS, tax payable or refund to be claimed, any life insurance policies or mediclaime taken and so on. The details mentioned here are very basic details which is applicable to almost everyone. Apart from this, the details of ITR depends upon the form of ITR applicable to you and your business.
There are various types of Income tax returns. So first you have to identify that what kind of ITR is applicable to you and your business. Here’s a list of types of income tax returns.
ITR-1 OR SAHAJ– This Return Form is applicable to a resident individual whose total income includes: -Income from Salary/ Pension; or – The income from one house property (excluding cases where loss from previous years is carried forward); or -Income from other sources (excluding Lottery winnings and Race Horse earnings); -Agricultural income up to Rs.5000.
ITR-2– This form is applicable to individuals and Hindu Undivided Families (HUFs) who fall under the below-mentioned categories: Income of the individual must be more than Rs.50 lakh. Pensions and salaries can be used to generate income. Income that is generated from house property. If you win the lottery or win a horse race, you will receive a lot of income. When the individual is the Director of a company. The agricultural income for the individual is over Rs.5, 000. Income has been generated from capital gains. There were any investments in equity shares that were not listed during the year. Foreign assets and foreign income generate income.
ITR-3- An individual or Hindu Undivided Family who has income from a proprietary business or is engaged in a profession is required to complete this form. ITR 3 may be filed by individuals who generate income from a profession or business. During the reporting period, any investments in equity shares that were unlisted were taken into account. Suppose the person is a partner in a firm. When the individual is a Director of an organization. When income comes from a pension or salary, a property, or any other source. The business generates a turnover greater than Rs.2 crore.
ITR-4 OR SUGAM– The form is required for individuals, HUFs and Partnerships (except LLPs) having an income from a business or profession who are residents. According to Section 44AD, Section 44ADA and Section 44AE of the Income Tax Act, this is applicable to those who have elected the presumptive income scheme. The taxpayer will, however, be required to file ITR-3 if the business has an annual turnover exceeding Rs 2 crore.
ITR-5– This form is applicable to Investment funds, Business trusts, Estates of insolvents, Estates of deceased persons, Artificial Juridical Persons (AJPs), Bodies of Individuals (BOI), and Associations of Persons (AOPs), Limited Liability Partnerships (LLPs), and firms.
ITR-6– This form is applicable to any companies that are not claiming exemptions under Section 11. If a company files an electronic return under this section, then it must do so electronically.
ITR-7- It may be used by individuals or companies who have furnished returns under Section 139(4A), Section 139(4B), Section 139(4C), Section 139(4D), Section 139(4E), or Section 139(4F).
Upon identifying which Income tax return form is applicable to you, you can move forward to collect required data or information in order to file the income tax return.
The last date of filing income tax return is 31st July 2022 for individual taxpayers and HUF tax payers. For Company/LLP/Partnership firms/Individual audited cases, the due date of filing income tax return is 30th of Sept-2022.
Now, everyone should know why it is important to file your income tax returns.
We have shortlisted few reasons why you should file your ITR.
- To avail loan or finance from financial institutions/banks
- To get visa for studying abroad or for travel visa also in some countries
- To claim refund of tax already deducted
- To carry forward the losses of your business
- To avail credit card facility from banks
- To establish your incomes’ proof
- To get policies with higher cover
- To make huge investments
- To avoid penalties and interest to be imposed on those who do not file income tax returns.
To read the above benefits in details please move to our blog section https://onlinechartered.com/10-reasons-why-you-should-file-income-tax-return/.
Conclusion
Now a days the government is insisting every citizen to file their income tax returns by themselves by simplifying the forms of income tax returns. But in our view, one should always consult a professional to file their income tax returns.
