Income Tax Return (ITR) Filing
Filing an ITR is an annual obligation for every individual and business earning income above a certain threshold. The ITR is a form used to report income, claim deductions, and pay the applicable tax to the Income Tax Department.
The 5-Step Process of Income Tax Computation and Filing:
- Determine Residential Status: This is crucial as it determines whether your global income is taxed in India.
- Compute Total Income: Aggregate income from all five heads: Salary, House Property, Business or Profession, Capital Gains, and Other Sources.
- Claim Deductions: Reduce your tax liability by claiming eligible deductions under sections like 80C.
- Compute Tax Liability: Calculate the tax on your net taxable income based on the applicable slab rates.
- Pay Advance Tax: If your total tax liability exceeds ₹10,000, you must pay advance tax in installments throughout the year.
Penalty for Late Filing:
A late filing fee under Section 234F can be up to ₹10,000. For small taxpayers with a total income not exceeding ₹5 lakh, the maximum penalty is ₹1,000.
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Do You Have Any Questions?
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Who is required to file an Income Tax Return (ITR)?
Filing is mandatory for any individual whose gross total income exceeds the basic exemption limit. It is also mandatory for all companies and LLPs, regardless of profit or loss.
What is the due date for filing ITR?
For individuals and businesses who do not require an audit, the due date is typically July 31st. For companies and businesses requiring an audit, it is October 31st.
What is Form 26AS or Annual Information Statement (AIS)?
These are your tax passbooks. They show all taxes deducted on your behalf (TDS), advance tax paid, and high-value transactions, all linked to your PAN.
I missed the ITR filing deadline. What should I do?
You can still file a “Belated Return” before December 31st of the assessment year. However, you may have to pay a late filing fee and interest on any tax due.