As a salaried individual, you must have heard about Income Tax Returns from one or the other source. With the year ending, everyone begins their tax planning and looks for lucrative investment options that shall help reduce their tax liability. So, what is Income Tax Returns and is it applicable to you? The tax slabs are available online on the Income Tax Department’s website, enabling you to check if you fall under the exemption limit. So, let’s understand everything about Income Tax Returns.
Income Tax Return
Income Tax Return or ITR is a type of form that you must submit with the Income Tax Department within a specified period. Based on the kind of taxpayer, there are several ITR forms available and the one you need to fill may vary depending on your income. Such a form contains details regarding your income and the taxes you need to pay during the financial year. So, what sources of income are considered under the ITR? Find out below:
- Income from salary
- Income from one or more properties
- Income from business or other professions
- Income from capital gains
- Income from sources like interest earned on deposits, dividends, lottery winnings, etc.
But is it mandatory to file your Income Tax Returns every year? If your income is more than the basic exemption limit, then it is compulsory to file ITR every year. Failing to submit your Income Tax Returns can attract a penalty and thus, it is recommended to check the tax slab applicable to you to file ITR.
Types of ITR Forms
There are seven types of forms available to file your Income Tax Returns.
ITR 1 or SAHAJ
Such an Income Tax Return form, also called as Sahaj, is only applicable to individual taxpayers having a total income of INR 50 Lakh.
ITR 2
The ITR 2 form is applicable to taxpayers earning an income of more than INR 50 Lakh from a pension, salary, property, or other sources.
ITR 3
The ITR form 3 is for individual taxpayers who earn an income from a business or through a profession.
ITR 4 or SUGAM
This ITR form is for individuals, partnership firms (other than LLP), Hindu Undivided Family (HUFs), etc. earning an income of up to INR 50 Lakh from a business or profession.
The ITR form 5, 6 and 7 are suitable for companies, universities, NGOs, political parties, Limited Liability Partnership (LLP), and others.
How to File Your Income Tax Return?
Follow the below-mentioned procedure to learn how you can submit your ITR without any hitches:
- Visit the official Income Tax Department’s website and register yourself if you are a first-time user. In case you have registered previously, you can log in to your account.
- Click on the ‘e-file’ option and then on the ‘File Income Tax Returns’ option visible on the screen
- Select the correct ‘Assessment Year’ for which you are filing the ITR and choose the individual type from the available options
- Proceed with the applicable ITR form based on your income
- You will then have to select some options for certain questions that you must answer correctly and proceed
- Now, you will be required to input your bank details to get any tax refunds and pre-validate the bank account
- Some of the information shall be pre-filled in the form and thus, it is advised to check these before submitting the ITR form
- Confirm the return summary and verify the ITR as the filing process won’t be complete without verifying it.
Documents Required to File ITR
Here are some crucial documents that will help you file your Income Tax Return:
- Salary slips
- Aadhar card
- PAN card
- Form 16 – a certificate of TDS issued by the employer to the employee
- Form 16A
- Form 16B
- Form 16C
- Form 26AS – an annual tax statement with details about your taxes
With this, you must have learnt about ITR filing and the form applicable to you. To reduce your tax liability, it is advised to invest in some tax-saving financial instruments that enable you to claim deductions. Some popular investment options are Public Provident Fund, term insurance plans, health insurance, ULIP plans, National Pension Scheme, etc. Understand your tax liability by making use of the online Income Tax calculator now and plan your investment accordingly!
