|Taxpayers (other than a company) not eligible for tax audit||31st July (For FY 20-21, the date is extended to 30th Sep)|
|Taxpayers eligible for tax audits||31st October (For FY 20-21, date is extended to 30th Nov)|
|Taxpayers who have undertaken international transactions and is liable to report under 92E||30th November (For FY 20-21, date is extended to 31st Dec)|
Who Should File Income Tax Returns (ITRs)?
- Individuals whose annual income exceeds the basic exemption limit (Rs 2.5 lakh/ Rs 3 lakh/ Rs 5 lakh)
- A resident individual having an asset or financial interest in an entity located outside of India
- A resident individual having signing authority in a foreign account
- Individuals whose total income is below exemption limit (Rs. 2.5 lakh/ Rs. 3 lakh/ Rs. 5 lakh) but
- has spent more than Rs 100,000 on electricity in a financial year or
- has deposited more than Rs 1 crore in one or more current accounts maintained with a bank or co-operative bank in a financial year or
- has incurred foreign travel expenditure of more than Rs 200,000 for himself or any other person
- Individuals who wish to claim income tax refunds from the department
- Individuals who want to apply for a visa or a loan
- Resident individuals who are earning from investment in foreign assets
- In case the taxpayer is a company or a firm, irrespective of profit or loss
Which Income Tax Return (ITR) to File?
Here are the 7 different ITR forms that different categories of taxpayers can file. The same has been explained below –
|ITR Form||Applicable to|
|ITR 1 or SAHAJ||
Resident individuals or Hindu Undivided Family (HUF) who have total income less than Rs 50 lakh from these sources –
Individuals (Resident or Non-resident) or HUFs who have total income greater than Rs 50 lakh from these sources -
Individuals (Resident or Non-resident) or HUFs who have income from proprietary businesses or profession, and this income comes from –
ITR 4 or SUGAM
Resident Individuals or HUFs or Partnership Firms (other than LLPs) having income from business or profession under presumptive taxation scheme (Section 44AD, Section 44ADA & section 44AE)
Artificial Juridical Person (AJP), Association of Persons (AOPs), Body of Individuals (BOIs), Limited Liability Partnership (LLPs), Estate of deceased, Estate of insolvent, Partnership Firms, Business trust and investment fund.
Companies other than companies claiming exemption under section 11 (exemption of income from property held for charitable purposes)
Persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) or section 139(4E) or section 139(4F) of Income Tax Act, 1961.
How to Prepare Income Tax Returns (ITRs)
Taxpayers can follow these steps to prepare and file their ITRs correctly.
- Collect TDS Certificates (Form 16/16A), Capital Gains Statements, Salary Slips, Interest Certificates & other requisite documents, and validate the details therein
- Download Form 26AS from the income tax portal and cross-verify the details from TDS certificates. In case of any disparity, inform the employer or the deductor and get it rectified at the earliest
- Select the correct ITR form in accordance with the sources and amount of income earned during a financial year
- Compute taxable income and fill out the details required in the ITR form using the documents mentioned above
- Based on the information, the ITR form will automatically calculate tax liability on the total income. In the case of tax payable, ensure that the tax liability is paid before filing ITR. And, in case of refunds, ensure that the preferred bank account is pre-validated
- At last, file the ITR and verify it within 30 days (electronically or physically). Post verification, the income tax department will send an ITR acknowledgement
Mistakes to Avoid While Preparing ITR
These are some of the common mistakes that taxpayers should avoid while filing ITR -
- Filling wrong ITR form
- Filling in incorrect personal details, such as name, date of birth, etc. or not having one’s PAN mapped to Aadhar card
- Not filling according to the details mentioned in Form 26AS and TDS Certificates (Form 16/ Form 16A)
- Selecting incorrect assessment year
- Non-disclosure of income sources and claiming incorrect deductions
- Providing incorrect bank details in ITR or failing to prevalidate bank account
- Not verifying ITR after filing( E-verify or physically verification) within the specified time, which is equal to non-filing of ITR
Frequently Asked Questions (FAQs)
Q1. What is usually taxed under “income from other sources”?
Interest earned from bank deposits, dividends earned from mutual funds & securities, lottery winnings, race winnings, royalty income, gifts received, etc., are taxed under income from other sources.
Q2. Are deductions and exemptions to be disclosed in the income tax returns?
Yes, without fail. Deductions and exemptions availed under the Act, such as Section 80C, 80U, must be disclosed in the ITR.
Q3. On what income are NRIs taxed under the income tax law in India?
NRIs are taxed only for the income originating in India, according to the Income Tax Act 1961.
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