Income Tax Return is a form which is used to file the income tax with the Income Tax Department. Income tax is a tax imposed by the Central Government on income of a person. Filing income tax is every citizen’s responsibility. The IT department verifies these declarations of income and if any amount has been paid in excess, the department refunds the amount to the assessee’s bank account. All entities are required to file the taxes on time to avoid penalty.
The form that contains information of income and tax paid of an assessee is called Income Tax Return. The Income Tax Department of India has various forms for it such as ITR 1, ITR 2, ITR 3, ITR 4S, ITR 5, ITR 6 and ITR 7.
Who is required to file Income Tax Return?
Anybody who is less than 60 years of age and has an annual income more than Rs2.5 lakh has to file income tax returns, according to the Income Tax Act. For senior citizens, the cut-off is Rs3 lakh, and for those who are more than 80 years old, the cut off is Rs5 lakh.
However, there are several other criteria for an individual or a company to fulfil for filing income tax returns. They are as follows:
It is mandatory for a company to file income tax returns if the company has incurred an income or a loss during the financial year.
Return filing is compulsory if you want a refund.
You have to file your income tax return if you are a resident of India but have property or financial interest in an entity outside India. The same is true is you are a resident of India but have signing authority in a foreign account.
The return has to be filed for any income from property under a charitable trust, religious purposes, research or for a political party, medical institution, hospital or any other institution.
You must file a return if you have entered into any transaction under the Annual Information Return.
Benefits of Filing Income Tax Return
Easy Loan Approval
Claim Tax Refund
Income & Address Proof
Quick Visa Processing
Carry Forward Your Losses
Documents required for Income Tax Filing
Proof of investments
T.D.S. Certificates in Form 16 or 16A as applicable
Documents on purchase and sale of investments/assets
Challan of tax paid such as advance tax or self-assessment tax
For businesses - a copy each of the audit report, balance sheet, trading, profit and loss account, personal account of proprietor or partners
Statement of receipts and payments when no regular books are maintained
Receipts of payment of insurance premium, provident purchase of NSCs, new equity shares, mutual fund, NSS, donations, etc. to support claimed deductions