Tax Services Simplified Way of e-filing

What is ITR?

Taxpayers like you and me declare our tax liability, claim tax deductions, and report gross taxable income through an Income Tax Return or ITR. You file that with the Income-Tax Department as an assessee. If you have more than a certain amount of money in a financial year (1st April through 31st March), you must file Income Tax Returns to the department. You could be self-employed or salaried. You may run partnership firms or companies or Hindu Undivided Families (HUFs). All need to file the ITR with the Income Tax Department. An assessee is required to report the income in the form of a salary, business profits, income from house property or through dividends received, capital gains (both short-term and long-term), interests income received through any other source.

Tax returns need to be filed by an individual or a business before a specified date. Individuals can file their Income Tax Returns earned during FY 2020-21 by 30th September, thanks to the government’s decision to extend the deadline as per May 2021 updates. The Central Board of Direct Taxes (CBDT) has also extended the deadline for filing ITRs for businesses by one month, until 30th November. If a taxpayer fails to obey the deadline, they have to pay the penalty as specified in the Income Tax Act.

Eligibility to file ITR

According to the Income Tax Act, income tax is only required to be paid by individuals or businesses who fall into specific income brackets. Entities or companies that are required to file their ITRs in India are listed below-

• Individuals with a total income of more than Rs.2.5 lakh in a financial year.
• All registered businesses that generate revenue, whether or not they have made a profit during the year.
• Those who wish to receive a refund for any excess tax deducted from their income.
• Individuals with assets or financial interests in companies based outside of India.
• Treaty-advantaged foreign companies that conduct business in India.

Documents required to file ITR

If you are a salaried individual, you must keep certain documents handy before you sit to file ITR. Those include your salary slips, savings bank account passbook, details of investments made in a year, and capital gains caused, if any, along with your Aadhar card and PAN card. In addition, you also need to understand the usage and purposes of certain forms connected with filing ITR. Those include:

Form 16
This form is provided by your employer and contains information about your salary and the TDS (tax deducted at source) on it.

Form 16A
This form contains information on the TDS deducted on interest received from fixed or recurring bank deposits.

Form 16B
This form contains the information on TDS deducted by the property buyer when you sell a property.

Form 16C
Details of the TDS of the rent paid to you by your tenant are recorded on Form 16C.

Form 26AS
This form is your comprehensive tax statement based on your PAN number. Your employer or anyone who pays you is included in this category. Self-assessment taxes or advance taxes paid, as well as proof of tax-saving investments like deductions as per Sections 80C to 80U, are all listed in form 26AS.

Why should you file an ITR?

According to the Income Tax Act, income tax is only required to be paid by individuals or businesses who fall into specific income brackets. Entities or companies that are required to file their ITRs in India are listed below

Responsibility
Filing tax returns is a yearly activity that every responsible citizen of the country is expected to do. It serves as a foundation for the government to determine the amount and means of citizens’ expenditures and a platform for assesses to claim refunds and other forms of relief as needed. Filing income tax returns demonstrates that you are accountable. Not just that, it also makes it easier for individuals and businesses to engage in subsequent transactions because their earnings are recorded by the tax department, with any applicable tax paid.

Utility
Even though your income does not qualify you for mandatory filing, it may still be a good idea to file income tax returns voluntarily. In most states, registering immovable property necessitates submitting three years’ worth of tax returns as proof. It’s easier to record a transaction if you file returns.

Easy access to credit
If you plan to take a loan like a home loan in the future, it is a good idea to keep a consistent record of filing ITRs because the borrower will almost certainly require you to show. Credit card companies, too, require proof of filing ITR before issuing a card to you.

Necessary for claiming adjustment against previous losses
It is important to note that losses incurred by an individual or a business, including short- and long-term capital losses, which are not recorded in the ITR in a relevant year, cannot be used to set off against the capital gains or business gains in subsequent years. Therefore, it’s best to file ITR regularly.

Useful for revision of ITR
If you haven’t filed the original Income Tax Return during the specified time, you won’t be able to file a revised return later, even if you wish to rectify the error in the ITR.

Why should you file an ITR?
According to the Income Tax Act, income tax is only required to be paid by individuals or businesses who fall into specific income brackets. Entities or companies that are required to file their ITRs in India are listed below

Responsibility
Filing tax returns is a yearly activity that every responsible citizen of the country is expected to do. It serves as a foundation for the government to determine the amount and means of citizens’ expenditures and a platform for assesses to claim refunds and other forms of relief as needed. Filing income tax returns demonstrates that you are accountable. Not just that, it also makes it easier for individuals and businesses to engage in subsequent transactions because their earnings are recorded by the tax department, with any applicable tax paid.

Utility
Even though your income does not qualify you for mandatory filing, it may still be a good idea to file income tax returns voluntarily. In most states, registering immovable property necessitates submitting three years’ worth of tax returns as proof. It’s easier to record a transaction if you file returns.

Easy access to credit
If you plan to take a loan like a home loan in the future, it is a good idea to keep a consistent record of filing ITRs because the borrower will almost certainly require you to show. Credit card companies, too, require proof of filing ITR before issuing a card to you.

Necessary for claiming adjustment against previous losses
It is important to note that losses incurred by an individual or a business, including short- and long-term capital losses, which are not recorded in the ITR in a relevant year, cannot be used to set off against the capital gains or business gains in subsequent years. Therefore, it’s best to file ITR regularly.

Useful for revision of ITR
If you haven’t filed the original Income Tax Return during the specified time, you won’t be able to file a revised return later, even if you wish to rectify the error in the ITR.

Why should you file an ITR?
According to the Income Tax Act, income tax is only required to be paid by individuals or businesses who fall into specific income brackets. Entities or companies that are required to file their ITRs in India are listed below

Responsibility
Filing tax returns is a yearly activity that every responsible citizen of the country is expected to do. It serves as a foundation for the government to determine the amount and means of citizens’ expenditures and a platform for assesses to claim refunds and other forms of relief as needed. Filing income tax returns demonstrates that you are accountable. Not just that, it also makes it easier for individuals and businesses to engage in subsequent transactions because their earnings are recorded by the tax department, with any applicable tax paid.

Utility
Even though your income does not qualify you for mandatory filing, it may still be a good idea to file income tax returns voluntarily. In most states, registering immovable property necessitates submitting three years’ worth of tax returns as proof. It’s easier to record a transaction if you file returns.

Easy access to credit
If you plan to take a loan like a home loan in the future, it is a good idea to keep a consistent record of filing ITRs because the borrower will almost certainly require you to show. Credit card companies, too, require proof of filing ITR before issuing a card to you.

Necessary for claiming adjustment against previous losses
It is important to note that losses incurred by an individual or a business, including short- and long-term capital losses, which are not recorded in the ITR in a relevant year, cannot be used to set off against the capital gains or business gains in subsequent years. Therefore, it’s best to file ITR regularly.

Useful for revision of ITR
If you haven’t filed the original Income Tax Return during the specified time, you won’t be able to file a revised return later, even if you wish to rectify the error in the ITR.