Filing of Income Tax Returns

ITR stands for Income Tax Return. It is a prescribed form through which the particulars of income earned by a person in a financial year and taxes paid on such income are communicated to the Income-tax Department. It also allows carry-forward of losses and helps to claim a refund from the income tax department. Different forms of returns of income are prescribed for filing of returns for different Status and Nature of income.

Who is Required to File Income Tax Return in India?

The following persons are required to file their Return of Income

  1. Every person, who is less than 60 Years, if his total income (before allowing any deductions under Section 80C to 80U) during the previous year exceeds the maximum amount which is not chargeable to tax i.e. Rs.2,50,000/-, required to file Income Tax Return in India. For Senior Citizens, the maximum amount which is not chargeable to tax is Rs3 lakh, and for those who are more than 80 years old, the maximum amount which is not chargeable to tax is Rs5 lakh.
  2. If a person has Long term Capital Gain or Short-Term Capital Gain on Sale of Immovable Property or Investments (Shares, Mutual Funds etc)
  3. If a person has an amount of TDS Deducted or Taxes Withheld in India, Such Taxes Withheld is more than his Income Tax Liability, then he can claim the excess amount as Refund only by filing Income Tax Returns
  4. If a person has losses to be carried forwarded (Loss may be due to Sale of assets, Investments etc)
  5. If a person being a resident have property or financial interest in an entity located outside India.
  6. If a person had entered into any transactions which is or to be reported under Annual Information Return (AIR) under Section 285BA
  7. In Case of LLP, Firm and Companies filing of Income Tax return is mandatory
  8. Applying for Visa or Loan from Bank/Financial Institutions require ITR to be produced.
  9. If a person is in receipt of income derived from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust.
  10. If a person being Resident have signing authority in a foreign account. (Not applicable to RNORs)

Under the Income Tax Law, different forms of returns are prescribed for different classes of taxpayers. The return forms are known as ITR forms (Income Tax Return Forms).

Even if the assessee had paid all taxes by way of TDS or Advance Tax ITR Filing is required because the amounts paid as advance tax and withheld in the form of TDS or collected in the form of TCS will take the character of your tax due only on completion of self-assessment of your income. This self-assessment is intimated to the Department by way of filing the return of income. Only then the Government assumes rights over the taxes paid by you. Filing of return is critical for this process and, hence, has been made mandatory. Failure will attract levy of penalty.

Consequences of Non-Filing of Income Tax Returns

As per section 234F (as inserted by Finance Act, 2017 with effect from Assessment Year 2018-19), a fee shall be levied on a person who is required to furnish a return of income under section 139 of the return of income is not filed within the due dates prescribed under section 139(1). The amount of fee is as follows: -

  1. Rs. 5,000, if the return is furnished on or before the 31st day of December of the assessment year;
  2. Rs. 10,000 in any other case;

Provided that if the total income of the person does not exceed Rs. 5,00,000, the amount of fee shall not exceed Rs. 1000.

Our Team Consisting Chartered Accountant and Professionals will assist in Filing Income Tax Returns and also advises our clients on Tax Planning and other related Services.