What is Income Tax Return: How to file ITR (FY 2022-23)

It is necessary to understand what is Income Tax Return (ITR). ITR is a mandatory filing process in India, where individuals, and businesses, declare their taxable income, claim deductions, and report their tax liability. Filing an ITR is crucial for various reasons like claiming tax refunds, applying for loans, and complying with legal requirements, especially for those with foreign assets. The process involves gathering necessary documents, selecting the appropriate ITR form, and filing online or offline.

What is Income Tax Return?

ITR or Income Tax Return is a form used to declare the net duty liability, claim of tax deductions, and report the gross taxable income. It’s obligatory for individuals who earn a certain amount of money to file IT Returns. The Income Tax Department of India receives ITRs from businesses, Hindu concentrated families (HUFs), and self-employed or salaried people.

Income Tax Return filing is the process by which a taxpayer has to file a report of his total income earned in a fiscal year.  Through the Income Tax Department’s official portal, an individual can complete their filing of returns. It has been notified with seven colorful forms- ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 and ITR 7. 

What are the documents required for ITR filing?

The main documents that are required for filing income tax returns are;

What are the documents required for  ITR filing
  • Aadhar and Permanant Account Number (PAN) card
  • Form 16
  • Salary Slips
  • Interest Certificates
  • Tax-saving Investment Proofs
  • Health Insurance Premium Receipts
  • Proofs of Capital Gains

Why should you file an ITR?

In India, those who meet any of the following criteria are required to file income tax returns. Those who fall under the different tax crossbeams. still, irrespective of the profit or loss made in a fiscal time, If it’s a Company or Firm. If a tax refund needs to be claimed. If there is a loss that must be carried forward under a head of income.

If someone is requesting a loan or a visa.  However, if one has an asset or fiscal interest in any entity located outside India and one is a signing authority in a foreign account If being a resident of India.  Still, that income is liable to be taxable in India, If an NRI derives any or all of his/ her income through sources in India.

What is the importance of IT Return filing?

Mentioned below are the significance of filing the income tax Return:

  • Your Capital Losses and Gains will still get an adjustment:
    • Timely filing of income tax returns will prove to be extremely satisfying for you If equity or share market investment has been your topmost investing agenda.  In case your total periodic salary is lower than the introductory exemption limit, also filing an ITR might not be needful, still, your capital losses can be acclimated against your capital gains.
  •  Easy to Claim Tax Refunds:
    • Once a deduction of a certain kind of tax takes place, one can only claim a tax refund if one is filing an income tax return, for that particular financial year.  Thus, if you’re an NRI who’s paying Tax Deducted at Source (TDS) on his rental amount, or if TDS is getting deducted from the fixed deposits of your bank accounts, it is very important that you file your returns to get eligible for the refund. 
  • Easy to Apply for Loans:
    • It is known that from being just another important fiscal document, your income tax return also acts as proof of your income as it reflects all the earnings that have been made in a single year.  As a result, NBFCs and other fiscal institutions laboriously seek this document once you request a particular loan amount. 
  • Easy to Claim Tax Deductions:
    • If you’re earning further than INR 3 lakhs (which is the introductory exemption limit), and are also seeking multiple exemptions to bring your income down to that level, you’ll need to file your ITR for that particular financial year.  Indeed, if you don’t have any tax liability, filing a tax return is still a mandate if you’re seeking any deductions for the future.
  • Owning foreign assets will be easier:
    • The law mandates any individual to directly file their income tax returns if they’ve possession of any foreign asset.  This provision also includes any immovable property that you might possess similar to a bank account. 
    • Failure to comply with this rule might attract consequences similar to a heavy penalty and it’s also considered a serious profitable offense. 

How to download the ITR Form?

  • Step 1:
    Visit the official portal for the income tax form. 
  • Step 2:
    If you’re an existing user, click on the ‘Login’ option. Click on the ‘Register’ option to register new account.
  • Step 3:
    Navigate to ‘My Account’ and choose the ‘Download Pre-filled XML’ option after logging in.
  • Step 4:
    Select the ‘Assessment Year’ for which you require a return. 
  • Step 5:
    Now, select the ITR Form Number that you downloaded from the Excel utility.
  • Step 6:
    Depending on the type of income listed in the description box, choose the applicable ITR Form.
  • Step 7:
    Download the form that is required in Microsoft Excel format and save it in the XML file.
  • Step 8:
    You’ll find the Excel and XML utilities in a folder on your computer.
  • Step 9:
    To import information from the pre-filled downloaded XML file into the Excel utility, click on the ‘Import from XML’ option.

How to file IT Returns online?

The Income Tax Department has updated the online portal for filing of income tax returns.  The updated portal makes the e filing process indeed easier and can be filed by following the steps mentioned below; 

  • Step 1:
    As per the provisions specified by the Income Tax rules, you can find out your income tax liability.
  • Step 2:
    You can relate to your Form 26AS to get a summary of your TDS payment for the different quarters of the assessment year.
  • Step 3:
    Based on the eligibility criteria, you’ll have to determine the category that you’ll fall under.
  • Step 4:
    Visit the official e-filing portal of the income tax department e-Filing Home Page 
  • Step 5:
    In case you’re a new user, you can register yourself using the’ Register’ button, differently, Click on the Login button. 
  • Step 6:
    Click on the ‘File Income Tax Return’ option under the-file’ tab. 
  • Step 7:
    From the various list provided on the website, you have to choose the category.
  • Step 8:
    Choose the suitable ‘ITR Form’ that applies to you. 
  • Step 9:
    You’ll be required to enter the details of your bank account as well. However, you’ll be required to re-validate the details, if you have formerly provided the same preliminarily. 
  • Step 10:
    After this, you’ll be redirected to a new web page where you’ll be able to check the pre-filled details of your ITR. Check the details and make changes if required. Once you’re sure that all the details provided in the form are correct, confirm the same and validate it. 
  • Step 11:
    Once the process is completed, check and verify the returns and send a hard copy of the same to the Income Tax Department without fail. 
ITR Filing service in Bangalore

How to file IT Returns offline?

These are the steps to file ITR offline

  • Step 1: Log on to the income tax e-filing portal.
  • Step 2: Under the Downloads > IT Return Preparation Software’ section, download the applicable ITR utility. 
  • Step 3: From the extracted folder, extract the utility ZIP file and open it
  • Step 4: Enter the required requested details in the ITR form. 
  • Step 5: Before calculating the tax, review all of the ITR form’s tabs.
  • Step 6: Save the generated XML file. 
  • Step 7: Enter your user ID (PAN), password, and captcha code, and click on ‘Login’ to the filing portal.
  • Step 8: In the File menu, select the ‘Income Tax Return’ link. 
  • Step 9: It should be kept in mind that on the Income Tax Return page, your registered PAN will be automatically filled in.
  • Step 10: Be careful while choosing the right Assessment Year and the ITR Form Number. 
  • Step 11: Choose the ‘Filing Type’ as Original/Revised Return.
  • Step 12: Upload XML option for Submission.
  • Step 13: Select the applicable Verification option and submit the ITR. 

Is there any penalty for late filing of ITR?

In case the returns aren’t filed by the due date, huge penalties are levied on the taxpayer. Apart from penalties, there could be other nuisances and consequences that the individual would face in case the returns aren’t filed. It completely depends on when the returns are filed after the due date, individuals could face penalties between INR 1,000 to INR 10,000.

Conclusion

In conclusion, what is Income Tax Return, and filing Income Tax Returns is a crucial financial responsibility for individuals in India, serving as a comprehensive declaration of their income, tax liabilities, and deductions. It not only facilitates adjustments for capital gains and losses but also enables individuals to claim tax refunds, apply for loans, and validate their income for various purposes.

24efiling provides a streamlined and user-friendly platform for individuals to file their income tax returns electronically. With intuitive interfaces and step-by-step guidance, it simplifies the often-complex process of tax filing, reducing errors and saving time for taxpayers.

FAQs
1. What is income tax return?

A paper filed with the government that details an individual’s or entity’s income and any taxes paid or returned is called an income tax return.

2. Who needs to file an income tax return?

Along with businesses and other entities that meet certain requirements, individuals whose income surpasses certain thresholds set by the government are also required to file a tax return.

3. When is the deadline to file an income tax return?

While it varies from nation to nation, the deadline for filing an income tax return in the US is usually around April 15th.

4. What documents are needed to file an income tax return?

W-2 papers for employees, 1099 forms for contractors, investment income statements, receipts for tax-deductible spending, and any other pertinent financial records are frequently required.

5. What are the consequences that will be faced for not filing an income tax return?

Tax authorities may apply penalties, fines, and interest charges for failure to file an income tax return. Legal repercussions like tax liens or, in extreme circumstances, criminal prosecution, may also result from it.

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