Income Tax Return

An income Tax Return is filed by every person with taxable income whose accounts are not liable to audit. There is a specific limit of total income which exceeds then a mandatory return needs to be filed.

It has various uses such as claiming tax deductions, investment in foreign assets, application for a visa or a loan, reporting gross taxable income and net tax liability.

The companies, partnership firms, Hindu Undivided Family (HUF), entrepreneurs or sole proprietors, employees, etc. must file a return on Income tax to the Income tax department. There are seven forms of ITR which are denoted to a specific head for every section of individuals and organizations.

Process of Filing Income Tax Return

There are two ways in which ITR can be filed i.e., either online or offline mode. The following are the steps for online return filing as given below:

Step 1 : Visit the Income tax E Filing Portal

Step 2 : Income tax login with help of user ID, password, displayed captcha code and then click on the ‘login’ button.

Step 3 : Click on the ‘E-File’ option in the menu and then click on the ‘Return of Income tax’ link.

Step 4 : After clicking on the ‘Return of Income tax’ link, it will display the following points:

• PAN is filled automated
• Select the ‘Assessment Year’ option
• Select the ‘Income Tax Return Form Number’ option
• Select ‘Filing type’ where the ‘Original/Revised Return’ option is there.
• Select ‘Submission Mode’ to the option given as ‘Prepared and Submitted Online’.

Step 5 : Click on the ‘Continue’ option

Step 6 : There is an instruction given to file ITR with the applicable fields relating to the mandatory details of the ITR form.

Step 7 : Select the verification option in the ‘Taxes Paid and Verification’ tab.

Step 8 : In the next step; there are three options given as follows:

• I want to E-verify
• I want to E-verify later but within 120 days from the date of filing.
• I don’t want to e-verify and send the Income Tax Return i.e., ITR-V by normal or speed post to the ‘Centralised Processing Centre’.

Step 9 : Click on the ‘Preview and Submit’ button with verification of all the data entered in the ITR.

Step 10 : Submit the ITR.

Step 11 : After choosing the option ‘I would like to e-verify’ then an e-verification can be completed through the following methods with help of the OTP entered:

• EVC generated through a bank or generated under My Account
• Aadhar OTP
• Prevalidated Bank Account
• Prevalidated Demat Account

Step 12 : : The OTP or EVC must be entered within 60 seconds or an ITR will be automatically submitted. The ITR should be verified by the ‘My Account>E-verify return’ option by sending ITR-V with a signature to CPC.

Types of Income Tax Returns Forms

The Central Board of Direct Taxes (CBDT) has made the list of forms which include the following:

• ITR 1 or Sahaj
  The form is applicable to individuals who are residents of India having a total income of Rs. 50 lakhs from salary, house property, pension or other sources and agricultural income up to Rs. 5000. This form doesn’t apply to the directors or holding unlisted equity shares in the company.
• ITR 2
  The form is applicable to individuals and HUFs who do not income from profits and gains of business or profession. An individual who is a director of the company having capital gains or losses from the sale of assets can report gains or losses to the Income Tax Return department through this form. The person having an agricultural income of more than Rs. 5000
• ITR 3
  The form is applicable to individuals and HUFs who have income from business or profession. It also applies to an individual holding a position of director in the company.
• ITR 4 or Sugam
  The form is applicable to individuals and HUFs and Firms (excluding LLPs) who are residents of India with a total income of up to Rs. 50 lakhs income from the head of business or profession.
• ITR 5
  The form is applicable to individuals and HUFs and Companies and persons filing Form ITR 7.
• ITR 6
  This form is applicable to companies’ excluding companies' claims exemption under section 11. The income tax return last date for the financial year 2022-2023 for individuals is 31st July 2023.
• ITR 7
  The companies who are required to file returns under section 139 (4A) section 139 (4B) or section 139 (4C) or section 139 (4D).

Eligibility Criteria to File Return of Income Tax

The following are the ITR filing for individual taxpayers who can choose the existing tax system or a new tax system with a lower rate of taxation. The taxpayer can choose concessional rates in the new tax system which doesn’t allow certain exemptions and deductions which are allowed in the existing tax system:

When Gross Total Income Exceeds Basic Exemption Limit

Income Tax Return must be filled when gross total income received from any of the five sources of income such as salary, house property, capital gains, etc exceeds the limit. The basic exemption limit depends on the income tax as chosen by the taxpayer for filing ITR. When an individual for a financial year the basic exemption limit is up to Rs. 250000. An additional 4 percent on the Health and Education cess is applicable to the amount calculated and a surcharge where income exceeds Rs. 50 lakhs up to Rs. 1 crore.

Deposits in Current Bank Account Exceeds 1 crore

When a total amount exceeds the limit of Rs. 1 crore deposited in a single or more current account then an individual has to file Income Tax Returns.

Expenses on Travel to Foreign Country

In case an individual crosses an expenditure of Rs. 2 lakhs for himself or another person then ITR is applicable.

Consuming Electricity

In case an individual exceeds more than Rs. 1 lakh for payment of electricity bill then ITR is applicable.

Turnover of Business

When turnover exceeds Rs. 60 lakhs in a previous year then ITR is applicable.

Receipts by Professional

In case the receipts exceed Rs. 10 lakhs for a professional in a previous year then ITR is applicable.

Tax Deducted at Source (TDS)

In the case of an individual collecting Rs. 25000 or more tax deducted at source or tax collected at source and for senior citizens the limit is Rs. 50000 or more then Income Tax Return is applicable.

Deposits in Bank Account (Savings)

When a person has deposited more than Rs. 50 lakhs in a single account or more then ITR is applicable.

• Visit the official E-Filing Portal
• Click on the ‘Return of Income Tax Demand Status’ option
• Enter the Acknowledgment number with a phone number then click on the ‘Continue’ button.
• Enter the 6-digit OTP which is sent to the phone number and then click on the ‘Submit’ button.
• When it is successfully validated, the Income Tax Return status can be viewed as; ‘Processed with Demand Due’.

The steps involved in the process to check the Income Tax Refund Status in case of filed return but not yet received the refund are as follows:

• The return is not processed and a refund may be received. For checking the status of the return, log in and go to e-file and; Return of Income tax and then ‘View Filed Returns’.
• The return is processed and there is no refund.
• The return is processed and a refund is not credited to the account.