Income Tax

Income Tax: Tax is one of the main revenue earning system of the Indian Government. Apart from various taxes that are present in the country, Income Tax is only the tax that is linked with the taxation of earning of an individual, firm or any organization in the financial year. Here, you can check your Pan Card Status

Income Tax

Income Tax

Income Tax

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There are mainly two types of Income Tax

1. Direct Taxes: Direct tax is the tax you directly pay to the government.
2. Indirect Taxes: Indirect Tax is a tax which is collected by restaurants, theaters and e-commerce websites for their service. Later, the indirect tax is being passed to the government. Indirect Taxes can be of many types such as service Tax on restaurants bills and movie tax, VAT on various clothes as well as electronic items.

In July 2017, Government of India rolled out the Good & Service Tax which has replaced all the indirect taxes that all the business owners have to manage.

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What is Income Tax Return?

Income Tax Return is the main proof which shows that you have paid Income Tax. IT-Department contains details of your income and the total income tax you have paid. All the Citizens in India, who earn a Taxable income have to file an Income Tax Return. Also, filing ITR will be beneficial to you for getting a refund if you have paid more Income Tax. However, if you don’t pay tax, you might have to pay a certain penalty and also you face certain legal issues.

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Income Tax Slab

In India, all the Citizen’s Income Tax is being grouped into various blocks such as Tax Slabs. Here all the Tax Slabs have a different Tax Rate.

For all the Individuals and HUF (Below 60 years of age):

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Income Tax Tax Rate
Upto Rs 2,50,000 NIL
Above Rs 2,50,00 and upto Rs 5,00,000 5%
Above Rs 5,00,000 and upto Rs 10,00,000 20%
Above Rs 10,00,000 30%

For all the Individuals and HUF (Age is 60 or above but less than 80):

Income Tax Tax Rate
Upto Rs 3,00,000 NIL
Above Rs 3,00,000 and upto Rs 5,00,000 5%
Above Rs 5,00,000 and upto Rs 10,00,000 20%
Above Rs 10,00,000 30%

For all Senior Citizens (Age- 80 years or above):

Income Tax Tax Rate
Upto Rs 5,00,000 NIL
Above Rs 5,00,000 and upto Rs 10,00,000 20%
Above Rs 10,00,000 30%

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Is it necessary to file the Income Tax Return?

Following are the main reasons to file the Income Tax Return:

  • If your total gross income is Rs. 2,50,000 (below 60 years),
    Rs. 3,00,000(between 60 to 80 years), Rs. 5,00,000(for 80 years and above).
  •  If you have to claim the tax refund.
  • when you want to carry forward a loss under the head of income.
  • If it’s a company or any Firm, regardless of whether it has made profit or loss in that financial year.
  • If you are a resident of India, but you hold assets or any financial interest in another country.
  • when you receive an Income which is being obtained from a property which is held by a trust or charitable organization or political party or any research organization, news agency, trade union, etc.
  • If you are applying for a loan or a visa.

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For NRI

If any NRI is gaining his Income from India, then Income is liable to be taxable in India. and he/she has to compulsory pay Income Tax.

When an NRI, falls under any of the cases described below, then he/she has to pay tax.

  • If he/she wants a refund
  • If the Gross Total Income is more than Rs 5,00,000
  • when he/she wants an Income Tax Refund
  • All the ITR-3, 4,5,6,7 are to be e-filed compulsory.

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Income Tax Returns Forms

Here we will provide you the list of forms along with their main purpose:

ITR-1: It is also known as SAHAJ, which mainly deals with the income of an Individual with a salary or pension or one house property or any other sources.

ITR-2: This form is only applicable to all Individuals or Hindu Undivided Families getting an income other than “Profit and gains of business and profession”.

ITR-3: This form is applicable for all the Individuals or Hindu Undivided Families who income sources are “Profit and gains of business and profession”.

ITR-4S: It is also known as SUGAM, it is mainly applicable for all the Individuals or HUFs who are opting for a presumptive section scheme under the section 44AD/ 44AE.

ITR-4: This is applicable for all the Individuals or profession who are holding a proprietary business or profession.

ITR-5: All the entities having a Firm, LLP, AOP, BOI, artificial juridical person, co-operative society, and local authority. However, all the political parties, institutions, colleges, and institutions have to file a return under the Section 139(4A), 139 (4B), 139(4C) or 139(4B).

ITR-6: This is applicable for all the companies other than who claim a deduction under the section 11.

ITR-7: This is applicable for all the entities who want to provide a return of income under the Section 139(4A), 139 (4B), 139(4C) or 139(4B).

ITR- V: It is the acknowledgment form of filing a return of income.

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How to file Income Tax Return Online?

Following documents are required:

– Bank Statements
– Form 16
– Copy of the last year’s return

Now follow the simple steps given below:

  1. Visit the Official Income Tax Portal and login with your details.
  2. Check the Tax Credit Statement (Form 26AS) – All the taxes that are deducted are actually deducted from the IT Department.
  3. Verify TDS of Form 16 with Form 26S.
  4. Now, select “Tax Return Forms” under the Download menu and choose Tax Return for the current financial year. Here, you have to download the proper ITR file. Then you have to click on the link which shows “Quick e-file ITR”.
  5. Then you have to fill the file by considering the details given in form 16.
  6. Now calculate Tax by clicking on “Calculate Tab”. Then fill the tax if applicable and then fill all the required details of the challan.
  7. Verify all the details and then click on the “Confirm” tab.
  8. Now, you have to generate the XML file save it on the computer.
  9. Then you have to select the current financial year in the “Upload Return” link and upload the XML File. Later they will ask you for Digital Signature, select “YES” if you have or else select “No”.
  10.  If you have filed the return, you will be view message on your screen. Now, you have to download the ITR-V acknowledgment form.
  11. Then you have to send the copy of ITR-V acknowledgment form to the nearest IT-Department office via post. Please send the copy within 120 days of filing the Income Tax Return.

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Benefits of filing Income Tax Return Online

In this process, you will have to maintain various things in order to file the Income Tax Return Online. But, due to this, you can file the Income Tax Return before the deadline.

  • As we all know, the filing of Income Tax Returns end on the July 31st Every year. If you file the Return before two months then there will be less traffic and also you will be able to complete process smoothly.
  • Due to any reason, if you are not able to file the Income Tax Return till July 31st, then your penalty will increase. Therefore, it is advisable to file the Income Tax Returns in advance.
  • If you file online, all the records of financial history will be saved with the IT-Department this history of financial records is helpful for a lot of organizations, with whom you might like to have a business relationship in future.
  • You will have a proof of ITR – V always ready with you which is useful to you in the case of any financial liability or opening a line of credit.

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How to e-file the ITR Offline?

In order to e-file ITR Offline, follow the steps

  • First of all, visit the official website of Income Tax and choose the option of e-filing.
  • Then you have to select the ITR which is suitable for you.
  • For the year 2016-17, the government has launched two utility options such an Excel Utility and Java Utility.

For Excel Utility

  • After downloading it, open and fill the form
  • Verify details, calculate Tax and generate XML
  • Save the form and then upload it to the Income Tax E-filing portal.

For Java Utility

  • After downloading the utility, open and then click on “Prefill”.
  • Enter your UserID, password, DOB and select Prefill address.
  • Enter and verify all the details, calculate Tax and save the XML File.
  • Lastly, click on submit.

Besides this, you can also submit the following documents:

  • Bank Details
  • Copy of last year’s ITR
  • TDS Certificates
  • Deductions or any saving certificates
  • Interest statement which shows your Interest in the particular financial year
  • Balance Sheet, Profit and loss account statement.

Frequently Asked Questions on Income Tax Return’s

I have already paid the advance taxes and I don’t have any dues or refunds, can I skip filing the Income tax return?

Even if you have paid advance taxes, it is compulsory to fill the ITR. Using ITR, the government will be able to track the record of how and where your income is placed. This is also helpful to avoid any case of fraud.

Where is ITR useful in my daily life?

A duly filed ITR is very much useful as a proof of income when you apply for a visa, when you apply for a bank loan, at the time of accident claims in third party insurance, etc.

How much time will it take to get back Income Tax refund?

You can only get back the refund when ITR is fully processed. Sometimes, it may take 1 year after you have filed your ITR. Even if you are claiming the refund, but the taxman may have determined that you are not liable due to an error in calculation from your part. If you think, the calculation is correct, then you can send a letter to IT-department. Also, you will not be able to get a refund due to wrong PAN, bank account number on the ITR. Also, the refund doesn’t reach to you due to an incorrect address or you are not available at home.

Can I file ITR after the due date?

Yes, you can file ITR after the due date. Due to some unpredictable situations, some people are not able to file the ITR on time. All such people can file the ITR under Section 139(4) before the end of the assessment year or before the assessment is completed.

How to check the Status of Income Tax Return?

After you have filed the Income Tax Return, you can check the Income Tax Return Status on the Income Tax e-filing portal. You will be able to check the Income Tax Return status after 10 days since the day you have filed the ITR.

We hope that you got all the Essential Information about the Income Tax. If you like this article then please share it with your Friends and Family members.

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