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ITR(Income Tax Returns) - What is ITR, Documents Required, Types, How to File & Why to File ITR?

ITR(Income Tax Returns) - What is ITR, Documents Required, Types, How to File & Why to File ITR?

1. What is ITR

The Income Tax Return or ITR is a form in which the taxpayers submit information about their income and tax payments to the income tax department. A taxpayer should file an ITR on or before the due date specified. The ITR form applicable to a taxpayer depends on the type of taxpayer, whether individuals, HUF, company, etc., and you choose the ITR based on the nature and type of income and total income. Every taxpayer should also calculate the tax payable and make payments before filing the ITR. You should file an ITR in case of a carry forward of losses and set off of brought forward losses.  
While filing your ITR, you should check the form 26AS for details of TDS and other income such as FD interest. You should also have your form 16 to enable filling the details of salary and tax saving deduction claims.

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2. Documents Required to File ITR

Depending on the tax bracket the individual falls under, the list of documents that are needed will differ. Some of the common list of documents that are needed to file ITR are mentioned below:

  • Pan card
  • Form 26AS
  • Form 16A, 16B, 16C
  • Salary Pay slips
  • Bank statements
  • Interest certificates
  • TDS certificate
  • Proof of Tax Saving Investments

3. Types of ITR

The department prescribes seven types of ITR forms based on the type of taxpayer and income:

  1. ITR-1 for individuals resident in India and with total income up to Rs 50 lakh. An individual having income from salary, house property and other sources can file ITR-1. An NRI cannot file ITR-1. Salaried taxpayers can use their form 16 to file ITR. Form 16 or if you have multiple Form 16s  can be directly uploaded to Cleartax Portal to file your income tax return.
  2. ITR-2 for individuals and HUF for their income other than income from business or profession. Individuals and NRIs having income from salary, more than one house property, capital gains and other sources can file ITR-2. Salaried individuals who have gains or losses from buying and selling shares should file ITR-2.
  3. ITR-3 for individuals to report their income from a business or a profession. Salaried individuals who have income from intraday trading in shares or income from futures and options should file ITR-3. Individuals can report income from salaries, house property, capital gains, business or profession (including presumptive income) and other sources in ITR-3.
  4. ITR-4 for individuals, HUF and partnership firms for their income under presumptive scheme. ITR-4 is for income from a business whose turnover is up to Rs 2 crore and taxed under section 44AD. Also, ITR-4 is for income from a profession whose turnover is up to Rs 50 lakh and is taxed under section 44ADA. A freelancer carrying out a notified profession can file ITR-4.
  5. ITR-5 for partnership firms, LLP, AOP and BOI. Business entities such as LLP, partnership firms, AOP and BOI can file ITR-5 for reporting income from business and profession and any other source of income.
  6. ITR-6 is the income tax return for companies to file income from business or profession and any other sources of income.
  7. ITR-7 is the income tax return for companies, associations and trusts claiming income tax exemption.

4. How to File ITR

You can e-file your ITR for the FY 2023-24 corresponding to the AY 2024-25. The filing is mandatory for all types of taxpayers except in the following cases 

  • Taxpayers aged 75 or above and satisfying the following conditions:
    • Pension and interest income are the only sources of total income. Interest income can be from any account maintained with the same bank in which they receive pension.
    • They have submitted a declaration to the bank.
    • Such bank deducts TDS under Section 194P.
  • Taxpayers with an income less than the applicable basic exemption limit.

The income you report falls under income from salary, house property, business or profession, capital gains and income from other sources. You calculate the aggregate income and claim tax deductions for tax savings and others. From the income tax payable, you reduce TDS on your income, TCS, advance tax and other tax credits. You can claim a tax refund of excess tax or TDS paid. In a case where you have a balance tax payable, you should pay the same before filing the ITR.

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4. Types of Forms for ITR E-filing

Form 16:  
Form 16 is a salary TDS certificate an employee receives from the employer. Form 16 provides the details of gross salary and exemptions such as HRA and LTA. The form also contains the details of the net taxable salary, any other income/loss reported by the employee, tax saving deductions and salary TDS.

Form 26AS:  
Form 26AS contains details of tax deducted at source or TDS on various incomes such as salary, interest, and the sale of immovable property. The form also contains details of self-assessment tax, advance tax paid by a taxpayer, and specified financial transactions.

Form 15G and Form 15H:  
Form 15G and Form 15H enable you to receive income without TDS. You can submit Form 15G in case you are below 60 years of age and where your annual taxable income is below the basic exemption limit. You can submit Form 15H in the case where you are a senior citizen and the tax due on your total income is nil. You need to submit form 15G or form 15H to the person paying you income.

5. Why Should You File ITR?

It is mandatory for one to file income tax returns in India if he comes under any of the following conditions:

  • Individuals who fall within the respective tax slabs.
  • If it's a Company or Firm, irrespective of the profit or loss made in a financial year.
  • If a tax refund needs to be claimed.
  • If a loss under a head of income needs to be carried forward.
  • If one is applying for a loan or a visa.
  • If being a resident of India, one has an asset or financial interest in any entity located outside India & one is a signing authority in a foreign account.
  • If an NRI derives any or all of his/her income through sources in India, that income is liable to be taxable in India.
  • If one receives 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.

Other Related Articles:
1. Which ITR Should I File    
2. How to file ITR Online    
3. What is ITR 2 Form & How to File ITR-2    
4. What is ITR 3 Form & How to File ITR-3    
5. Who and How to File ITR 4    
6. What is ITR-5 Form, Structure & How to File ITR 5    
7. ITR 6    
8. How to File and Download ITR-7 Form    
9. ITR 3 vs ITR 4    
10. ITR 1 vs ITR 4    
11. ITR 1

Frequently Asked Questions

The TDS on the income may differ from the actual tax liability on the income earned. In general, TDS rates are a fixed percentage of the payments, while your income gets taxed at slab rates. In case the TDS is lower, you may need to pay the balance tax due. In case the TDS is high, you may claim a refund. In any case, while filing your ITR, you should aggregate the annual income from all sources and calculate the tax due/claim refund.

In a case where your tax payable before claiming TDS exceeds Rs 10,000, you may have an interest liability. The interest liability is 1% per month calculated on the balance tax. You can reduce the interest liability by an early payment of tax dues. You need to pay the balance tax along with any interest dues before filing the ITR.  
You can avoid the interest liability by planning your tax payments under ‘advance tax’ within the financial year.

In case your total income after claiming tax deductions and exemptions is up to Rs 5 lakh, you can claim a rebate on the tax payable. The maximum rebate is Rs 12,500. In such a case, you can claim a refund of the TDS paid on your income.

Yes, you should file an ITR in case of losses, which may be from business or sale of shares or interest paid on a home loan. An ITR filing helps you to set-off the loss and also carry forward the loss to the future years. Do note that you should file ITR on or before the due date.

The late fee is Rs 5,000 for a return filing after the due date but before 31 December 2020. For the AY 2020-21, a late fee of Rs 5,000 is payable for a return filing from 1 December 2020 to 31 December 2020. The late fee is Rs 10,000 for a return filing from 1 January 2021 to 31 March 2021.  
However, the late filing fee shall not exceed Rs 1,000 if the total income of a taxpayer does not exceed Rs 5 lakh.

You can check the status of your ITR and about ITR processing status at https://www.incometaxindiaefiling.gov.in/e-FilingGS/Services/ITRStatusLink.html?lang=eng using your PAN and ITR acknowledgement number.

You can check your IT refund status at https://tin.tin.nsdl.com/oltas/refund-status-pan.html

You can apply for PAN card online. To know the step wise procedure to apply for PAN card, refer https://easytax.live/s/how-to-apply-for-pan

You can get an instant PAN using Aadhaar through an Aadhaar based OTP received on your mobile number.

You can link PAN to Aadhaar in a simple two-step procedure and also through your e-filing login on the income tax portal.

Yes, it is useful to file your tax returns. In case you wish to apply for a loan, the ITR may be considered as a mandatory document that must be submitted.

You can file a NIL-ITR when your total salary is less than the exemption limit, yet you want to go ahead and file an income tax return. In a case like this, since you do not owe any taxes to the Government, your liability will be NIL, and hence your return will be NIL-ITR.

There are 7 types of ITR forms depending on income sources and categories of taxpayers. It is mandatory to file ITR if income exceeds certain limits or under specific conditions.

  • Submitted and pending for e-Verification / Verification: This status signifies that you have filed your ITR but have not e-Verified it, or your duly signed ITR-V has not been received at CPC yet.
  • Successfully e-Verified / Verified: This status signifies that when you have submitted and duly e-Verified / Verified your return, but the return has not been processed yet.
  • Processed: This status signifies that your return is successfully processed.
  • Defective: This is the status where the department notices some defect in the filed return due to lack of certain essential information as required under law, or some inconsistencies. 
  • Case transferred to Assessing Officer: This is the status when the CPC has transferred your ITR to your jurisdictional AO. If your case is transferred to your AO, you will be contacted by the officer to provide necessary details.