Filing your income tax return at the end of each year can be quite an exhaustive procedure that needs to be carried out all the same. For someone who is not well-versed with the entire process, filing income tax returns can be quite overwhelming owing to all the necessary documentation and rules involved.
If you also get nervous each time the income tax filing season nears and want more clarity with the process, here’s everything you need to know about the income tax return.
What is income tax return?
An income tax return (ITR) is essentially an official form that you use to file information about your income and tax liability to the Income Tax Department of India. In simpler terms, it is an overall summation of your incomes from different sources in a given financial year, your tax liabilities and any tax deductions that you are eligible for. So, an income tax return, essentially, is the full disclosure of your annual income.
The Income Tax Act, 1961, makes it obligatory for Indian citizens to file their income tax returns at the end of each fiscal year (a fiscal year in India is from 1st April to 31st March). Moreover, these returns have to be filed before the specified due date each year, and there is a penalty for late filing.
Is it mandatory for everyone to file income tax returns?
All Indian citizens with an annual income exceeding ₹2.5 lakh are legally mandated to file income tax returns each year. The income tax rates differ based on the age of the respective taxpayer and their respective taxable income slab.
The importance of filing your income tax return
An income tax return serves as legal proof of your income. Firstly, it is important to file an income tax return if you have paid more taxes than you owe and are eligible for a tax refund.
Furthermore, you can also be required to submit your most recent ITR documents when applying for a loan or a credit card. Therefore, it is generally advisable to file your income tax returns even if it is not mandated for you as there are many direct and lateral advantages to it.
How to file an income tax return?
Income tax returns can be filed offline as well as online, depending on your convenience and personal preference.
The ITR form is available for download on the official Income tax e-filing website once you’ve created an account. It bears mentioning here that there are different kinds of ITR forms for different income groups and your returns are liable to get rejected if you choose the wrong form. So, ensure that you identify the right ITR form for your particular situation.
Once you have filled and submitted the respective form, you will receive the ITR-V acknowledgement form which needs to be verified within 120 days from the date on which you filed your return. Once again, verification can either be done online or offline.
Documents required for filing your income tax return
To ensure that there are no hiccups while filing your income tax return, you should the documents that are required. Here’s a complete list:
Interest certificate from banks and post office
Tax-saving investment proof documents
Besides helping you provide your financial history in the future, your ITR return also assists in the progress and development of India as a whole. Therefore, as a responsible citizen of the country, you should make it a point to file your income tax returns even if you are not legally required to.
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