All about Income Tax Return (ITR)
July month of every year is the high time, being the last month, of filling of Income Tax Return. The IT Return filed after 31st July 2018 would attract a penalty which may be extended up to Rs. 10,000/-. It is pertinent to note that even with the late penalty Income Tax Return can be filed only up to 31st March of the forthcoming year. Thereafter it would not be possible for the person/ assessee to file his/ her return. So it is vital for the person to file their return within the stipulated time period before it is too late.
But before filling of Income Tax Return, it is necessary to understand its Meaning, Necessity, Applicability, Basic Requirement, Time of Filling and Mode of Filling of Return.
Let’s check out them step by step.
Every person who earns income is required to pay a small amount out of his total income to the Government for the welfare and betterment of society. The Government collects this sum and uses it for the welfare of the people by constructing Schools, Hospital, Roads, providing Subsidy Scheme, Health and Welfare Schemes etc. The small amount so paid directly by the person to the Government against his/ her Income is called Tax. Income Tax Return is a form by which a person intimates to the government about his income during the particular financial year. The applicability of tax is governed by the provision of Income Tax Act, 1961 and is applicable to the whole of India.
Percentage of Tax to be payable by any person is elaborated below:
|Minimum Limit (in Rs.)||Individual less than 60 years of age||Individuals who are of 60 years or more||Individuals who are of 80 years or more||HUF||Association of Person||Artificial judicial person|
- Rebate under Section 87A is available to a resident individual if his total income does not exceed Rs. 3,50,000. The amount of rebate shall be 100% of income-tax or Rs. 2,500, whichever is less.
- The surcharge is applicable only if:-
- total income is Rs. 50,00,001-1,00,00,000 @10% of such tax
- total income exceeds Rs. 1,00,00,000 @15% of such tax
- However, this surcharge shall be subject to marginal relief, i.e. the total amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax on the total income
- Education Cess (EC) shall be charged @2% of Tax and Surcharge
- Secondary and Higher Education Cess (SHEC) shall be charged @1% of Tax and Surcharge
The provision of Section 139A of the Income-tax Act state that the following personnel are required to file an Income Tax Return:
- Earning of Individual: Person having total income(i.e. gross income without any deduction) more than the amount chargeable to tax (the current limit is Rs. 2,50,000/- P.A.)
- Earning of Business: Person carrying on a business/profession whose total sales/turnover/receipts is likely to exceed Rs. 5,00,000/- P.A.
- A person covered under Section 139 (4A): Every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes if the total income exceeds the maximum amount which is not chargeable to Income Tax.
- The person covered under Section 115WD: Every Employer who during a previous year has paid or made provision for payment of fringe benefits.
*Person herein includes natural as well as an artificial person.
Filling of Income Tax is necessary, as a copy of ITR helps to get the following additional/ luxurious facility to the person who discloses the income earned by filling ITR:
- Availing Personal loans from Banks/ Financial Institution: The limit of loan sanctioned depends on the Total Income of the person availing the loan. Therefore, a copy of the latest Income Tax Return is necessary to avail Loans.The loan is sanctioned on the basis of the creditworthiness of the person.
- Legal Proof of your Income: ITR is a legal Proof of the income earned as the individual has legally disclosed his income and has also paid taxes on the same. Therefore, even if it is a nil return i.e. income does not exceed amount chargeable to tax, it is advised to file nil return.
- Adjustment of carry forward losses in subsequent years: In case of losses incurred by a business, the same can be adjusted with future income, provided the return is filed before the due date.
- Eligible to claim various deduction: The benefit of filling return on time is that the assessee is eligible to claim various deduction and exemption which might not be available if the return is filed after the due dates.
- Avoidance of late fee:e.f. 01.04.2018, any return filed after the due date will attract additional fees which may extend to Rs. 10,000/-.
- No Belated Return: e.f 01.04.2018, the assessee can file its Income Tax Return at any time before the end of the relevant assessment year. That means for the previous year 2017-18, a person can file his return up to 31.03.2019, only after paying a late fee. After that he/ she will not be allowed to file any return.
The Basic Requirements to file Income Tax Return is:
- A person must have a PAN card for the purpose of filing of his/ her IT Return.
- There is good news for the persons not having PAN Card, that Income Tax Department has launched a Beta version of online allotment of PAN for individual free of cost for a limited period. The same can be accessed at www.incometaxindiaefilling.gov.in
- Aadhaar Card: Aadhaar number is a 12 digit numeric unique number allotted to an individual and can be applied at Aadhaar centre of the Government.
- Valid Bank Account Number: Bank account of a person needs to be linked with the PAN and Aadhaar to avail the benefits of the Government scheme. All the refund related to ITR shall directly be credited to the Bank account mentioned in the ITR
- Valid Email ID and Mobile Number: OTP shall be sent for registering the PAN with the Income Tax Department and creating the login ID and Password for filling of ITR. All the communication related to Income Tax Return shall be done vide registered E-mail ID and mobile number.
Time of Filling
Every person is required to file his/her return before the following dates in the Assessment year:
|Nature of Person||Due Date||Fee for the delay in furnishing of return up to the 31st day of December of the assessment year||After 31st day of December of the assessment year|
|Individuals having Salaried Income||31st July||Rs. 5,000/-*||Rs. 10,000/-*|
|The person other than Company having whose accounts are not liable for audit||31st July||Rs. 5,000/-*||Rs. 10,000/-*|
|The person other than a company whose accounts are liable for audit||30th September||Rs. 5,000/-*||Rs. 10,000/-*|
|A working partner of Firm whose accounts are to be audited||30th September||Rs. 5,000/-*||Rs. 10,000/-*|
|30th September||Rs. 5,000/-*||Rs. 10,000/-*|
|Assesse required to furnish return under 92B i.e. having an international transaction or specified domestic transaction||30th November||Rs. 5,000/-*||Rs. 10,000/-*|
*Where the total income does not exceed Rs. 5,00,000/-, fee payable under this section shall not exceed Rs. 1,000/-
Nature of Form to be filed
The following forms shall be filled, depending upon the nature and income of the person:
|S. No.||Nature of Person||Name of Form|
|1.||Individuals being a resident other than not ordinarily resident having Income from Salaries, one house property, other sources (Interest etc.) and having total income up to Rs.50 lakh||ITR-1 also called Form SAHAJ|
|2.||Individuals and HUFs not having income from profits and gains of business or profession||ITR-2|
|3.||Individuals and HUFs having income from profits and gains of business or profession||ITR-3|
|4.||Presumptive income from Business & Profession||ITR-4 also called Form Sugam|
For persons other than:
|6.||Companies other than companies claiming exemption under section 11||ITR-6|
|7.||Persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F)||ITR-7|
Filing of Income Tax Return within the stipulated time period i.e. 31 July 2018 has its own benefits. It not only protect us from the violation of stringent provisions of the Income Tax Act, 1961 but also provides us some additional benefits which have already been discussed above. So it is advisable not to wait for the last minute rush and file the return well in advance before the due date.
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