What is Income Tax Return?
Income tax is the necessary contribution that is levied by the government on people that varies with the yearly income. Every citizen should file returns with the tax department at the end of each financial year. Income Tax Return is a form for coverage of gross subject financial gain from completely different sources, claiming tax deductions and declaring net tax liabilities to the income tax authority. ITR is filed to the income tax department by a salaried or freelance individual, Hindu Undivided Family (HUF), firms or corporations. The method of filing the ITR is noted as ITR filing. Once you file an unpunctual return, you’re not allowed to hold forward bound losses.
Who is required to file ITR?
Any individual whose total financial gain within the financial year exceeds taxation exemption limit (Rs. 2.5 lakhs for FY 19) is prone to file the taxation come. Except that any non-public or public company primarily based out of India or doing business in India, firms, Hindu Undivided Family (HUFs), Association of Persons (AOP), Body of Individual (BOI) etc. are prone to declare web profits/losses of the year and pay their liabilities by filing ITR.
The Taxation Department of India has created it mandatory for people to file taxation returns. People are required to file tax returns as follows:
• A person with an age of less than 60 years has a financial gain bigger than Rs.2.5 lakh.
• A person with age between 60 years to 80 years and has an annual financial gain of Rs. Rs. 3 lakh or additional.
• A person higher than the age of 80 years has an annual financial gain of over Rs. 5 lakh.
• A company or organisation is sure to file for taxation come regardless of if the corporate is in loss or profit.
• If there’s a loss that you would like to hold forward underneath the head of financial gain.
• If a resident Indian has an asset or any monetary interest in an entity set outside the geographic territory of the country.
• If a person applies for a loan or a visa, a symbol of filing tax returns could be needed.
• If a person receives financial gain from property that command underneath any reasonably trust for charitable functions or any analysis association, instructional Centre or any medical Centre, brotherhood or any non-profit university.
If a non-resident Indian has his/her financial gain sources from India, then he/she is additionally prone to pay the taxes and also to file taxation Returns.
Types of ITR Forms:
There are different types of forms that can be used to file income tax returns based on different income sources and types of taxpayers (resident/non-resident/individual/non-individual, etc.).
ITR-1 – This type is additionally known as SAHAJ. ITR-1 or SAHAJ is supposed to be filed by a personal WHO gets financial gain from wage, pension, one house property, interest or financial gain from different sources (excluding winning from lottery winnings and financial gain from racehorses) and having the entire financial gain of up to Rs. 50 lakh. In case of clubbed taxation Returns, wherever a better half or a minor etc. is enclosed within the tax returns, this will be done provided that their financial gain too is prescribed to the specifications set down higher than.
ITR-2 – This type is for people or the Hindi Undivided Families (HUFs) WHO have a financial gain that isn’t from the profits and gains of a business or otherwise profession. The Income tax returns, if clubbed alongside that of a spouse, minor kid etc. must make sure that their sources of financial gain are just like those stated above. Solely then will their returns be filed along. A distinction of earnings in even one class makes the assessee at risk of fill separate and applicable taxation Returns kind.
ITR-3 – This type is for various persons or the HUFs whose supply of financial gain is from the profits and gains of a business or profession. If the partner of a firm solely earns financial gain from the firm as a share within the profits and not by the other means that like interest, bonus, salary, remuneration, or commission etc. then such a private or Hindu Undivided Family ought to file Income tax returns mistreatment solely the ITR-3 kind.
ITR-4 – This type is for those that have presumptive financial gain from a business or profession as per Section 44AD, Section 44ADA and Section 44AE and whose income is not more than Rs 50 lakh.
ITR-5 – This type is for firms, Limited Liability Partnership, Association of persons and Body of Individuals, Artificial Juridical Person, Estate of deceased, Estate of insolvent, Business trust and investment fund.
ITR-6 – This type is for all those firms that aren’t claiming exemption beneath Section 11 of the Income Tax Act.
ITR-7 – This type has relevancy for all folks as well as those enterprises who are needed to file tax returns beneath the Section 139(4A), Section 139(4B), Section 139(4C), Section 139(4D), Section 139 (4E) or 139 (4F).
Due Date for filling ITR Returns:
The due date for filing ITR returns for the current financial year are:
|Taxpayer Category||Due date|
|Body of Individuals||31st of July 2019|
|Hindu Undivided Family||31st of July 2019|
|Association of person||31st of July 2019|
|Businesses (Requiring Audit)||30th of September 2019|
|Businesses (Requiring TP Report)||30th of November2019|
Note: The due date for filing ITR returns for the current financial year for Taxpayer Category, Body of Individuals, and Hindu Undivided Family have been extended to August 2019.
Penalty on Late Filing of ITR Returns:
People can be compelled to pay the late fee after the due date of ITR returns:
• Rs 5000, if tax is filed, is after the due date that is 31st July but before or on 31st December of that assessment year (in this case 31st of December 2019).
• Rs 10,000 if tax is filed when 31st of December however on or before 31st of March of the relevant assessment year (in this case 1st January to 31st of March 2020).
But, there’s a relief to the little payer, IT Department has expressed if your total financial gain doesn’t exceed 500,000, then a most penalty of Rs 1000 is going to be levied on the delay of ITR filing.