Two types of taxes are levied in India, a direct tax, which is levied directly on the income of a person, and an indirect tax, which is levied indirectly. An example of direct tax is income tax, and an example of indirect tax is Goods and Services Tax, or service tax.
Income tax is payable by every individual who receives income in India under the Income Tax Act, 1961. There are five types of income under the Income Tax Act, including income from a salary, from a house, from capital gains, from a business or profession, and from other sources. The Income Tax Act taxes individual income, Hindu undivided families, associations, bodies of individuals, and companies.
How does an income tax return work?
In income tax returns, taxpayers, whether they are individuals, firms, or Hindu undivided families, disclose the amount of their income, claim applicable exemptions and deductions, and calculate the amount of tax they are liable to pay. Taxes paid by the taxpayer are also included in the Income Tax Return.
The income tax return is a form that a taxpayer uses to report his income and tax payable on it.
In what way does eFiling work with income taxes?
A person can file an income tax return in two ways, either online or offline. As per the government instructions, all returns must be filed electronically. Offline filing will no longer be available.
Therefore, ITR Online eFiling is mandatory from 1st April 2022 in the following cases:
- If you earn more than 2.5 lakh Rupees a year in taxable income
- In case you need to claim any TDS refunds
- If you want to ensure that your losses are carried forward
- In the case of overseas travel expenses exceeding 2 lakh rupees each year
- The electricity bill must exceed 1 lakh rupees a year.
- A business with annual sales or turnover over 60 lakh rupees is required to register
- In the event that you have a TDS of over 25000 rupees in a year.
E-filing deadline for income taxes
Individuals, groups of individuals, associations of people, and Hindu undivided families must file their income tax returns by July 31 every year. The deadline for E-filing income tax returns varies based on the taxpayer. Tax returns must, however, be filed by September 30 by businesses and companies that require an audit. In the case of persons required to file forms 32CEB under section 92E, the deadline for submitting income tax returns is November 30 every financial year. Taxpayers who fail to file their income tax returns on time will be required to pay both the late fee and the tax.
Income Tax Return Filing: Benefits and Advantages?
In addition to the benefits listed below, filing an Income Tax Return has the following disadvantages as well:
- One loan can be acquired by a person who has filed an income tax return. Many banks require a copy of the income tax return before issuing a loan.
- You will have to file a refund claim if any refund is due to you from the income tax department.
- Carrying forward losses: If you haven’t filed an income tax return, you cannot carry forward capital losses.
- During your visa interview, you might be required to present your income tax return receipt from the previous year if you are traveling overseas.
- A life insurance company like LIC might ask for your income tax returns from previous years if you’re planning to purchase a high-value life insurance policy, such as one for more than one crore.
- A few years’ worths of income tax returns are required to support your financial status when applying for government tenders in the future.
Income Tax Filing Documents
- A PAN card registration is the first step
- Two-digit Aadhar number
- Bank account information
- FORM 16
- A form 16A,
- The 26AS form Information on investment
- Receipts for claiming the house rent allowance
- Bank Passbook Fixed deposit statement
How to file an income tax return online
There are the following taxpayers who are able to file their tax returns online:
- Over Rs. 5 lakh in income taxpayers
- Residents of Hindu undivided families with assets outside India.
- Taxpayer required to furnish an audit report under sections 10(23C), 10(23C), 10(23C), 10(23C) (VI), 10(23C) (via), 10A, 12A (1) (b), 44AB, 80IA, 80IB, 80IC, 80ID, 80JJJAA, 80LA, 92E or 115JB.
- Companies (not under Section 44AB), associations, bodies of individuals, juridical persons artificially created, cooperative societies, and local governments.
- An income tax return online filed under section 139 (4B) by taxpayers
- A resident who is the signatory on any account outside of India.
- An individual claiming deductions under section 91 or relief under section 90 or 90A.
- The entire industry.
Tax Return Conclusion
In order to file income tax returns, all taxpayers, no matter if they are individuals, Hindu undivided families, associations of persons, or companies, have to do so. To file an income tax return, you can do so online as well.