Income Tax Return in India
Is this your first time for filing an income tax return? Or are you someone who’s left everything for the accountants till now and think it is high time to learn a thing or two? Let’s take a look at the various basic elements that your income tax return revolves around.
Who files an Income Tax return?
The government has now made provisions to bring a lot more people under the income tax net and to curb tax evasion. Section 139 of the Income Tax Act 1961 states that a company or any person other than a company must file an Income Tax Return if:
- Their total income has exceeded the maximum threshold for nil income tax under the Income Tax Act 1961
- They own an immovable property that exceeds a specified floor area whether by way of ownership, tenancy or otherwise.
- They own a motor vehicle, other than a two-wheeler
- They are a member of a club whose membership is Rs. 25,000 or more
- They have incurred expenditure for foreign travel, whether for themselves or for any other person.
- They have a credit card which is not an ‘add-on’ card.
- They have subscribed to a telephone service.
Where do you get the forms?
To file your return, you will need one of the following forms, which are available on the Income Tax Department’s website.
- SARAL II (ITR – 1): If you are an individual having income from salary/pension/housing property or from other sources.
- ITR 2: You will need the ITR – 2 form if you are an individual or HUF not having income from business or profession.
- ITR – 3: ITR – 3 is for individuals/HUF who are partners in firms and not carrying out business or profession under their proprietorship.
- ITR – 4: You will need the ITR – 4 if you are an individual/HUF with income from business or proprietorship.
- ITR – 5: ITR – s is for firms, AOPs and BOIs.
- ITR – 6: Companies except for ones claiming exemption u/s 11 can use the ITR – 6 forms for their income tax return.
- ITR – 7: If you are an individual or company wishing to lodge returns u/s 139(4A), 139(4B), 139(4C) or 139(4D).
- ITR – 8: For lodging FBT returns
- ITR V: Should you wish to transfer data electronically without a digital signature in forms ITR – 1, ITR – 2, ITR – 3, ITR – 4, ITR – 5 and ITR – 6, you may use ITR V.
- Acknowledgement: This form is an acknowledgement for electronic or non-electronic returns.
Income Tax Return – E-filing
Moving with the times and for the first time in AY 06-07, the Indian Government introduced e-filing of income tax returns. Today, it is compulsory for companies and firms that require a mandatory audit u/s 44AB to do an e-filing of their returns.
In year 2011-12, it is expected that majority of all Tax filings will be done through Internet, especially in the urban areas.
The Income Tax Return process has been simplified and made user friendly over the years. Maybe it’s time you went through the steps yourself to file own tax return by yourself? Give it a go!
[Suggested Reading: Income Tax Return Filing – 7 Formulas for Error Free and easy filings]