Overview of Income Tax Return (ITR) Filing in India

Income tax in India is regulated under the Income Tax Act, 1961, and managed by the Central Board of Direct Taxes (CBDT) under the Ministry of Finance. Every person or entity earning income - whether salaried, self-employed, a business, or even a Hindu Undivided Family (HUF) is required to file ITR. ITR is the process of reporting your income, deductions, and taxes to the Government of India. It is filed online at the Income Tax portal. Not filing your ITR on time can lead to penalties or legal action.

Who is Eligible to File the ITR in India?

The following are eligible to file ITR in India:

Benefits of Filing the Income Tax Return (ITR) in India

Filing an income tax return (ITR) in India is beneficial for the taxpayer in many ways:

1. Mandatory requirement: Under section 139 of the Income Tax Act, 1961, filing the Income Tax Return for individuals and businesses earning above the exemption limit is mandatory.

2. Proof of Income: An ITR is an official record of your income. It shows how much you earned in the financial year, which makes you more credible for securing loans and applying for visas for foreign travel.

3. Claim Tax Refunds: If you have paid more tax than required through TDS, filing an ITR allows you to claim a refund from the government.

4. Carry Forward Losses: Filing an ITR allows businesses and individuals to carry forward losses, which reduces their future tax liabilities.

Documents Required to File the Income Tax Returns

1. Aadhaar and PAN Card of the taxpayer and the company

2. Bank Statements of the taxpayer/company/firm

3.Form 26AS: It is a summary of all the taxes that have been deducted from your income, such as TDS (Tax Deducted at Source).

4. Form 16: It is issued by your employer, which gives the details about the total salary + TDS deducted from it.

5. Investment and financial documents: If you have invested in shares, mutual funds, or fixed deposits, dividend statements, capital gains reports (if you have sold any assets), and interest certificates need to be attached.

6. Proof of other income: Other than your salary, if you have earned from different sources, such as from freelance work, rental income, or interest, you need to attach the documents, such as bonus receipts, interest certificates, rental agreements, and any freelance payment statements, to prove the same.

7. Deductions and tax-saving investments: To claim deductions under sections 80C - for investments in PPF, ELSS, etc., 80D - for insurance premiums, or 80G for the charitable donations, you need to attach the documents to prove the same.

8. Form 10E (If Applicable): If you have received salary arrears or any special bonuses, then you need to attach the Form 10E - it is used to claim tax relief for those payments under section 89(1) of the Income Tax Act, 1961.

9. TDS Certificates: If you have earned income from sources other than your salary, such as rent, interest, or professional fees, then your TDS might have TDS deducted. In this case, you need to attach the TDS certificates from those sources to show that tax has been deducted and deposited with the government.

10. Details of Foreign Income (If Applicable): If you have earned from abroad or own foreign assets, you need to disclose all the information in your ITR. Documents such as foreign bank statements, income certificates, or details of foreign investment are necessary to report this income correctly.

The Process of Filing the Income Tax Return Online in India

1. Aadhaar and PAN Card of the taxpayer and the company

2. Bank Statements of the taxpayer/company/firm

3.Form 26AS: It is a summary of all the taxes that have been deducted from your income, such as TDS (Tax Deducted at Source).

4. Form 16: It is issued by your employer, which gives the details about the total salary + TDS deducted from it.

5. Investment and financial documents: If you have invested in shares, mutual funds, or fixed deposits, dividend statements, capital gains reports (if you have sold any assets), and interest certificates need to be attached.

6. Proof of other income: Other than your salary, if you have earned from different sources, such as from freelance work, rental income, or interest, you need to attach the documents, such as bonus receipts, interest certificates, rental agreements, and any freelance payment statements, to prove the same.

7. Deductions and tax-saving investments: To claim deductions under sections 80C - for investments in PPF, ELSS, etc., 80D - for insurance premiums, or 80G for the charitable donations, you need to attach the documents to prove the same.

8. Form 10E (If Applicable): If you have received salary arrears or any special bonuses, then you need to attach the Form 10E - it is used to claim tax relief for those payments under section 89(1) of the Income Tax Act, 1961.

9. TDS Certificates: If you have earned income from sources other than your salary, such as rent, interest, or professional fees, then your TDS might have TDS deducted. In this case, you need to attach the TDS certificates from those sources to show that tax has been deducted and deposited with the government.

10. Details of Foreign Income (If Applicable): If you have earned from abroad or own foreign assets, you need to disclose all the information in your ITR. Documents such as foreign bank statements, income certificates, or details of foreign investment are necessary to report this income correctly.

Frequently Asked Questions