An Income Tax Return is a form where taxpayers have to declare their taxable incomes from all sources, eligible deductions, and tax payments if any. This is called ITR Filing Procedure.
If you have paid more taxes than “payable”, you are entitled to Income tax refund. If the reverse is the case, you should pay remaining amount before filing your Income tax return. Cases, where more taxes have been paid beforehand, are TDS or Advance Tax paid by you. In such a scenario, you should show correct incomes and taxes in your Tax Returns.
Income Tax Return forms range from ITR 1 to ITR 7, used for different types of income and different types of entities. Depending on the type of forms, there are various disclosure requirements.
Filing ITR in India is completely online and paperless. There is no need for you to submit physical return at the local income tax offices. All documents, wherever necessary need to be submitted online. Income tax return is to be filed for a particular Financial Year (i.e. April to March) irrespective of Accounting Year adopted by you.
If you have taxable Income in India, you must file your ITR in India. This is applicable for an individual if his/her taxable income exceeds INR 2.50 Lakh. In case you are a Company. LLP or Partnership Firm, it is mandatory for you to file ITR irrespective of your income or loss.
Filing Income tax Return enhances your credibility and your credit availing capacity from the bank perspective. Even if you are not liable for ITR filing for any reason, it is a good practice to file the same. Your ITR serves as a proof of your Income. No other document does this job.
If you have incurred any losses in your business on account of expenses or depreciation, you must file your return in order to carry forward those. The benefit of this can be availed once you have taxable income. Such losses, then, can be set off against taxable profits.
A good track record of regular ITR Filing shows your financial strength and is indicative of your regularity. This helps you to obtain quick bank loans and also visa. Hence, it is advisable to file ITR on regular basis.
For any reason, if your TDS has been deducted and the same is higher than your actual tax payable, such a claim of refund can only be done by filing a correct IT return in time. You won’t get your refunds if you don’t file your ITR.
There are many criteria defined under the Act, in which you may be served legal notice if you have not filed your ITR. Filing your ITR correctly and in time can ensure that you don’t have to face any of these.
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