Income Tax Return

Income Tax Return (ITR) is a form that a person is supposed to submit to the Income Tax Department of India. It contains information about the person’s income and the taxes to be paid on it during the year. Income from salary, Profits, and gains from business and profession. Income from house property.

Income Tax Form:-

Types of Income Tax Return Forms: – To file tax returns Income Tax Department issued a series of forms applicable to different types of assesses:

ITR 1: For Individuals having Income from Salaries, one house property, other sources (interest, etc.) and having a total income up to Rs.50 lakh.
ITR 2: This form is applicable For Individuals & HUFs not carrying out business or profession under any proprietorship.
ITR 3: This form is applicable For Individuals & HUFs having income from a proprietary business or profession.
ITR 4: This form is applicable For presumptive income from Business & Profession.
ITR 5: This form is applicable for For persons other than – (i) individual,(ii)HUF, (iii) company, and (iv)person filling ITR-7
ITR 6: This form is applicable For Companies other than companies claiming exemption under section 11
ITR 7: This form is applicable For persons including companies required to furnish returns under section 139(A) or section (1394B) or section 139(4C) or section 139(4D) or section 139(4E)

Benefits of Income Tax Return

Save interest. Not filing ITR on time may lead to an interest in the tax payable.
Avoid penalties up to Rs 10,000. There is a cost of filing a belated ITR.
Avoid notice from the Income Tax department.
Loan approval becomes easy.
Carry forward losses.

Documents for Income Tax Return:-

Pan Card
Aadhar Card
Address Place of Business
E-mail ID
Mobile No.
Bank Statement
Business Details

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FAQ of Income Tax Return

What is Income-tax?

It is a tax levied by the Government of India on the income of every person. The provisions governing the Income-tax are covered in the Income-tax Act, 1961.

What is the administrative framework of Income-tax?

The revenue functions of the Government of India are managed by the Ministry of Finance. The Finance Ministry has entrusted the task of administration of direct taxes like Income-tax, Wealth tax, etc., to the Central Board of Direct Taxes (CBDT). The CBDT is a part of Department of Revenue in the Ministry of Finance. CBDT provides essential inputs for policy framing and planning of direct taxes and also administers the direct tax laws through the Income-tax Department. Thus, Income-tax Law is administrated by the Income-tax Department under the control and supervision of the CBDT.

What is the period for which a person’s income is taken into account for the purpose of Income-tax?

Income-tax is levied on the annual income of a person. The year under the Income-tax Law is the period starting from 1^st April and ending on 31^st March of next calendar year. The Income-tax Law classifies the year as (1) Previous year, and (2) Assessment year.

The year in which income is earned is called as previous year and the year in which the income is charged to tax is called as assessment year.

e.g., Income earned during the period of 1^st April, 2021 to 31^st March, 2022 is treated as income of the previous year 2021-22. Income of the previous year 2021-22 will be charged to tax in the next year, i.e., in the assessment year 2022-23.

Who is supposed to pay Income-tax?

Income-tax is to be paid by every person. The term ‘person’ as defined under the Income-tax Act under section 2(3) covers in its ambit natural as well as artificial persons.

For the purpose of charging Income-tax, the term ‘person’ includes Individual, Hindu Undivided Families [HUFs], Association of Persons [AOPs], Body of individuals [BOIs], Firms, LLPs, Companies, Local authority and any artificial juridical person not covered under any of the above.

Thus, from the definition of the term ‘person’ it can be observed that, apart from a natural person, i.e., an individual, any sort of artificial entity will also be liable to pay Income-tax.

How does the Government collect Income-tax?

Taxes are collected by the Government through three means: a) voluntary payment by taxpayers into various designated Banks. For example, Advance Tax and Self Assessment Tax paid by the taxpayers, b) Taxes deducted at source [TDS] from the income of the receiver, and c) Taxes collected at source [TCS]. It is the constitutional obligation of every person earning income to compute his income and pay taxes correctly.

What are the applicable tax rates?

The rates of Income-tax and corporate taxes are available in the Finance Act passed by the Parliament every year.

In the Challan there are terms like Income-tax on companies & Income-tax other than companies. What do they mean?

The tax that is to be paid by the companies on their income is called as corporate tax, and for payment of same in the challan it is mentioned as Income-tax on Companies (Corporation tax)-0020. Tax paid by non-corporate assessees is called as Income-tax, and for payment of the same in the challan it is to be mentioned as Income-tax (other than Companies)-0021.

How is advance tax calculated and paid?

Advance tax is to be calculated on the basis of expected tax liability of the year. Advance tax is to be paid in instalments as given below:

a) In case of all the assessees (other than the eligible assessees as referred to in section 44AD and 44ADA

i) Atleast to 15 per cent – On or before 15th June

ii) Atleast to 45 per cent – On or before 15th September

iii) Atleast to 75 per cent – On or before 15th December

iv) Atleast to 100 per cent –On or before 15th March

section 44AD

44ADA

100 per cent – On or before 15th March

Note: Any tax paid on or before 31st day of March shall also be treated as advance tax paid during the same financial year.

The deposit of advance tax is made through challan ITNS 280 by ticking the relevant column, i.e., advance tax.

What is tax on regular assessment and how is it paid?

Under the Income-tax Act, every person has the responsibility to correctly compute and pay his due taxes. Where the Department finds that there has been understatement of income and resultant tax due, it takes measures to compute the actual tax amount that ought to have been paid. This demand raised on the person is called as Tax on regular assessment. The tax on regular assessment-400 has to be paid within 30 days of receipt of the notice of demand .

What is exempt income and taxable income?

An exempt income is not charged to tax, i.e., Income-tax Law specifically grants exemption from tax to such income. Incomes that are chargeable to tax are called taxable incomes.