What is Income Tax Return Filing?
The income earned by the individuals and businesses are subject to tax. The tax levied on the income of a person is Income tax, which is levied and collected by the Central Government. Such tax on income earned is payable in the same financial year wherein it is accrued in the form of advance tax. But the intimation and calculation of the income as well the tax liability is provided in the Assessment Year. This intimation form is called Income Tax Return. The form and time limit for filing ITR are different for different taxpayers based on the criteria.
Income Tax Return forms are recently modified, to simplify the user experience. But through these new or modified schedules, it is apparent that taxpayers are responsible to prove a claim of expenses, exemptions and deductions. Hence, online filing of income tax returns requires assistance from experienced professionals to make sure the correct filing of your return.
Benefits of Income Tax Return Filing
Allows carry forward of losses
Most businesses in their initial years face losses from the business. The business loss or capital losses can be carried forward up to 8 years if the ITR is filed. This loss can also be adjusted against the future income that lowers taxable income in the future. If ITR is not filed, the taxpayer is deprived of this benefit.
Define financial worth
The ITR filed with the Government defines the financial worth of the taxpayer. The track of ITR shows the financial capacity and also increases the capital base of a person. Hence, the track of income and financial worth is decided by the previously filed ITR. The investors and institutions look forward for returns filed to know the capacity of the business.
Loan Processing and high risk cover
The numbers and the capital base defined by the income tax return is helpful for the loan processing. Higher the financial worth, easier the loan processing. The same applies to high-risk cover insurance. The ITR is a considerable document for making decisions in this regard
Claim refund of TDS paid from salary
Salaried personnel receive the income after deduction of applicable TDS. It may happen that after the eligible deductions, the tax liability is lower than the amount of TDS actually deducted. In such cases, the excessive payment can be claimed in the form of refund only if ITR is filed by the person.
Documents required for ITR filing
PAN Card of the taxpayer
Entities PAN Card
In case of company or firm, PAN card of all directors or partners is required
In case of company or firm, Aadhar card of all directors or partners is required
Cancelled cheque of the taxpayer’s bank account is required
Bank Account Statement
The statement for concerned Financial Year is required to assess other incomes
For business entities, except proprietorship, financial statements are required
Investment/ expenses u/s 80
Details about the investments made or expenditure u/s 80 must be provided
The salaried person should provide the TDS Certificate, known as Form 16
Types of ITR forms
Form for ITR filing are different based on type of income and business structure
ITR 1 (Sahaj)
For Income from Salary & Interest
For all incomes other than business income
For all incomes including business income
ITR 4S (Saral)
For Presumptive tax, 8% is deemed income of turnover
For Partnerships business, this ITR is used for all income
For Companies, this ITR is used for all the incomes
ITR filing Process
Day 1 - Collection
- Discussion and collection of basic Information
- Consultancy for appropriate ITR form
- Collection of required documents
Day 2 - Execution
- Computation of taxable Income Tax
Day 3 - Submission and Acknowledgement
- Online filing of income tax return
- Sharing ITR Acknowledgment
Whether NIL ITR is mandatory to be filed?
All the business entities (Company, LLP, Firm) must file ITR even if their total income or tax payable is zero. In the case of an individual, when income exceeds the basic exemption limit, it is recommended to file ITR to avoid scrutiny from the Income Tax Department. Also, if your tax liabilities are zero and have filed the ITR before, it is necessary to be filed. The same can be provided as a proof of income whenever required.
What are the due dates for IT return online filing?
The due dates for filing ITR online are mentioned below – let’s take an e.g. of (F.Y. 2017 – 18 & A.Y. 2018 – 19)
Up to 31st July of next year (31st July, 2018) – Individuals, HUF, BOI and AOP (who does not fall under the audit provisions)
Up to 30th September of next year (30th September, 2018) – Companies including other entities on which Audit provisions are applicable
Do I need to file return if there is a loss in my business income?
Yes, filing ITR in case of loss would be in your interest itself. With online ITR filing, you can carry forward the losses to a certain upcoming financial year to set off losses against the future profits
Whether payment of tax is made while IT returns filing?
No, the income tax is paid during the financial year in which the income is earned. While filing ITR, if the tax liability is more than the already paid advance tax, the due amount must be paid with interest, if applicable.
Can I file ITR once the last date of filing is gone?
In case you fail to file the return on a due date, there is a provision to file return up to a certain date, however with a late filing fee and reduced benefits, the belated return can be filed before the end of Assessment Year for the concerned financial year. That means, for F.Y. 2017-18, belated returns can be filed till 31st March, 2019.
What is the penalty for a delay in filing ITR?
Late filing fee will be levied based on the date of filing belated return. The late fee for filing depends on the period of filing:
- 1. For return filed after due date but till December – late filing fees of ₹ 5,000 will be charged
- Person exclusively supplying goods/ services not liable to tax or wholly exempted from Tax
- 2. For return filed after 31st December – late filing fees of ₹10,000 will be charged However, for small taxpayers with an income up to ₹ 5 Lakh, the fees are limited to ₹ 1,000 only.
What are taxable events under the GST Act?
The event of supply of Goods and/or Services i.e. transactions such as the sale, transfer, barter, exchange, license, rental, lease or disposal made, or agreed to be made for a consideration of taxable goods or services, is to be considered a taxable event under the GST Act.
Is it possible to revise the Income Tax return even after the acknowledgement is generated?
To revise the filed ITR, the deadline is 1 year from the end of the next financial year. Therefore, in the case of F.Y. 2017-18, the last date of filing would be 31st March, 2019.