(ITR eFiling) Income Tax Filing

In India, filing a Personal Tax Return is essential for individuals to report their income and taxes to the government. The Income Tax Act of 1961 provides various forms, including ITR-1 (Sahaj) and ITR-2. ITR-1 is simple and meant for salaried individuals earning up to Rs. 50 lakhs annually. On the other hand, ITR-2 is for those with other income sources besides salary, like income from property or abroad, but do not earn from business or professional activities.

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Filing Income Tax Returns – ITR Filing in India

In India, individuals and businesses must submit their income tax returns when their Gross Total Income (GTI) surpasses Rs. 3 lakhs, as incomes below this threshold are exempt. Submitting these returns is an annual requirement and must be completed by a set deadline. Several types of income tax return forms are designed to cater to the distinct requirements of various categories of taxpayers, including both individuals and corporate entities.

Individuals, NRIs, partnership firms, LLPs, companies and Trusts must file income tax returns annually. Individuals and NRIs must complete income tax filing if their income exceeds Rs.2.5 lakhs per annum. Proprietorship and partnership firms must make income tax returns – irrespective of the amount of income or loss. All companies and LLPs must file income tax returns, irrespective of turnover or profit.

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What is Personal Tax Return Filing in India?

Personal tax return filing in India is when individuals submit their annual income details and information on deductions and taxes paid to the Income Tax Department. This is done using specific forms, known as Income Tax Returns (ITRs), which vary based on the individual’s income sources, such as salary, business income, capital gains, and other sources. Filing a tax return is to report your income and pay the appropriate taxes to the government. It’s mandatory for those whose income exceeds the basic exemption limit set for the financial year. The income tax filing process can be completed online via the e-filing portal.

Who Should File a Personal Tax Return?

Personal income tax return filing need to be filed by following persons:

• Salaried Individuals: Those who earn a salary and whose income exceeds the tax-exempt threshold. Personal income tax filing need to be filed by following persons:
• Individuals and Hindu Undivided Families (HUFs): Those not involved in business or professional pursuits but with other sources of income, such as investments, property, or capital gains, that bring their total income above the tax-free limit.

ITR Forms For Personal Tax Filing

As mentioned above, the Income Tax Department of India provides a range of ITR forms, from ITR-1 to ITR-7, designed to cater to different taxpayers based on their income sources, amount, and complexity. The following two forms need to be submitted for Personal Income Tax Filing:

• ITR-1 (SAHAJ)
• ITR-2

ITR-1 Sahaj Form

The ITR-1 Sahaj Form is designed to simplify the tax filing process for individual taxpayers in India, particularly aimed at residents with a total income of less than Rs. 50 lakhs. This form accommodates income from specific sources such as:

• Salary or Pension
• A single-house property
• Other miscellaneous sources

Eligibility for Filing ITR-1

ITR-1 income tax filing is intended for Resident Individuals under the following conditions:

• Income Limit: The individual’s total income during the financial year should be Rs. 50 lakh.
• Applicable Income Types: Eligibility for ITR-1 includes individuals earning income from:

• Salary
• One house property
• Family pension (up to Rs. 5,000)
• Other sources, such as:

• Interest from Savings Accounts
• Interest from Deposits (Bank/Post Office/Cooperative Society)
• Income Tax Refund Interest
• Interest on Enhanced Compensation

• Other Interest Income
• Family Pension

• Income Aggregation: Income can be combined with that of a spouse or minor only if it aligns with the specified categories above.

ITR-2

ITR-2 is used in India by individuals and Hindu Undivided Families (HUFs) with income that does not include profits and gains from business or professional activities. It’s specifically designed for those with diverse income sources, excluding business or professional earnings.

Who Should File ITR-2?

You’re eligible to file ITR-2 income tax filing if you have income from the following sources:

• Salary or Pension: This includes all earnings from employment or post-retirement benefits.
• Multiple House Properties: Income from renting out or owning more than one property.
• Capital Gains: This includes profits or losses from selling assets like stocks, bonds, or property, covering both long-term and short-term transactions.
• Other Sources: This category includes various incomes such as lottery winnings, bets on racehorses, and other legal gambling earnings.
• Agricultural Income: If you earn more than Rs 5,000 from farming or similar agricultural activities.
• Foreign Income or Assets: This applies if you have earnings from abroad or own assets outside India.
• Residential Status: It’s suitable for either Resident Not Ordinarily Resident (RNOR) or Non-Residents.
• Directorship: If you hold a directorial position in any company, whether listed or unlisted.

Documents Required for ITR Filing

When income tax filing in India, ITR-1 and ITR-2 forms are designed to be annexure-less, meaning you’re not required to attach any supporting documents during submission. However, having the right documents is crucial for a smooth and accurate filing experience.

• Aadhaar Card
• PAN Card
• Bank account details
• Form 16 (salary and TDS information)
• Form 26AS (tax credit statement)
• Receipts for tax exemptions or deductions (if applicable)
• Bank interest statements
• Capital gains statements (for asset sales)
• Documents related to foreign assets and income (if applicable)

Due Date for ITR Filing in India

For personal tax return filing in India, the general deadline for individuals filing ITR-1 and ITR-2, without needing a tax audit, is 31st July of the assessment year that follows the financial year in question.

Penalty for late ITR filing

A late filing fee of Rs 5,000 will be charged for income tax filing between 31 July 2023 and 31 December 2023. Small taxpayers whose total income is below Rs 5 lakh will benefit from a reduced penalty of Rs 1,000 for late filing within this period.

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