Filing of income tax returns is mandatory for every responsible national who earns an income. Here is what you must know.
Filing ITR is necessary for the individuals who are earning a particular annual income, not beyond a fixed due date. Although it can be a tiresome task, it comes with a lot of advantages:
Benefits of filing the tax returns:
- Filing IT returns forges you to become a responsible civilian of your country.
- This can increase the chances of getting a satisfactory home loan, in case you want to apply for it in the coming future.
- A few credit card companies ask for a valid proof of income tax returns before they issue a card for you.
- As the tax department records an income, it is very easier for the individuals to immigrate into transactions of future with slightest complications.
- In case if you want to claim adjustments against previous losses, income tax return is necessary. Filing IT returns might prove useful when you are required to file an amended return. You cannot file an amended return unless you have filed an original return.
Despite the fact that the level of your income is not eligible for the necessary filing of returns, it might still become a wise choice to deliberately do so. The question is why? For example, the IT returns can minister to prove your income if you have applied for any loan as a co-borrower. If you have an international expedition on your wish list, income tax returns can be beneficial while you apply for a visa. Furthermore, in many states, the registration of fixed or immobile properties needs advancing as a proof of tax returns for the previous three years.
Who must file an ITR?
A person is compelled to file an ITR if the gross taxable income (before the exemption for long-term profit on listed securities and other exemptions under Income Tax Act, 1961’s Chapter VI-A) during a certain financial year outpaces the maximum sum which is not liable to tax. For the fiscal year 2016-17, if the total income is up to Rs. 2.5 lakh, it is not liable to be subjected to tax for a citizen along with non-resident persons. For local senior citizens who have attained an age of more than 60 years, such brinks of total income are Rs. 3 lakhs and for the local super senior civilians who have attained an age of 80 years, it is Rs. 5 lakhs. No different limits get along for female tax payers. As a resident and an ordinary local person, you might also have an income tax return filing accountability heedless of the income you earn, if you are the owner of overseas assets.
- For the current year, i.e. FY 2016-17/AY 2017-18, IT Returns should be filed before July 31, 2017 for individuals, and by September 30, 2017 for businesses. Below is the list of people for whom the filing of returns is a must.
- Evaluates whose gross total income is above the limit of exemption for the year. The limit is Rs. 2.5 lakhs for the ones who have not attained an age of 60 years; Rs. 3 lakhs for the ones who are between an age group of 60 and 80 years, and Rs. 5 lakhs for the ones who have attained an age above 80 years.
- Non-resident Indians except the ones covered under section 115AC having a taxable income.
- People who have suffered any loss from business, or profession, or risky business or capital losses.
- A local who has a signing authority in any international account situated outside India.
- BOI, AOP, HUF and individuals who have a taxable income or taxable income before you make any deduction under section 10BA or 10B or 10A or under the chapter VI-A excelling the basic limit of exemption.
- An individual who claim for relief under section 90A or 90 deductions u/s 91.
- Persons who do not have any taxable income and deposited Advance Tax or TDS, payment must file ITR to claim income tax refund.
- An individual can file ITR even if they do not have taxable income
You can file income tax returns in an online mode, making the procedure an easier task and lesser time consuming than before. There are several forms that are made available to file returns, depending on various criteria. Hence, make sure that you understand them and follow these rightly to prevent of getting into any trouble.
Income Tax Returns Forms:
The IT return forms were announced for the fiscal year 2016-17 that are applicable to the individuals are:
ITR-1 is for the individuals who earn a salary, income, or pension from one house source or property other than a lottery without any losses to move ahead and no relief from the foreign tax is to be claimed. This ITR form will not be applicative of the total income of the person is more than Rs. 50 lakhs.
ITR-2 is for the ones who do not have any income from profession or business under any proprietary businesses.
ITR-3 is for the business owners and professionals; persons involved in analytical businesses.
ITR-4 is for those taxpayers whose income has assessed on the assumptive basis.
How to file an income tax return?
The individuals who have a total income not more than Rs. 5 lakhs have the advantage to file their tax return in physical form in lieu of electronic filing of returns. On the other hand, all the other tax payers together with the ones who wish to claim a refund of the taxes have to necessarily file their ITR in electronic mode.
Before you file your tax return, the individuals who have both Aadhaar number, as well as PAN number, should have linked these two. The last date to link was July 31, 2017 according to the newly-introduced requirement by the Finance Act 2017 (except for the foreign civilians, individuals who have attained an age of more than 80 years, individuals, and non-residents who stay in some specified states). Aadhaar number must also be quoted on the income tax return.