Filing income tax returns (ITR) is a crucial duty of every taxpayer in India, ensuring adherence to the nation’s tax regulations. It involves detailing all sources of income, deductions, and tax liabilities for a comprehensive report to the Income Tax Department. The last date to file your Income Tax Return for the Financial Year 2023-24 (Assessment Year 2024-25) without incurring a late fee is July 31, 2024.

Early ITR filing helps avoid errors and last-minute technical glitches, ensuring a smoother submission process.  At IndiaFilings, we streamline the ITR e-filing process, enabling you to submit your ITR returns online with ease. Our service simplifies each step, ensuring a faster, more efficient, and secure Income tax filing experience.

With expert assistance available throughout the process, IndiaFilings ensures that your ITR efiling is hassle-free, allowing you to fulfil your tax obligations effortlessly.

Income Tax Return (ITR)

An Income Tax Return (ITR) is a form that taxpayers use to report their income details and tax payments to the income tax department. There are seven different ITR forms available for ITR filing: ITR 1 through ITR 7. The appropriate form for a taxpayer depends on various factors, including their sources of income, the total amount earned, and the type of taxpayer they are (such as individuals, Hindu Undivided Families (HUFs), companies, etc.). Each taxpayer must accurately complete and submit their income tax ITR filing by a specified deadline to comply with tax laws.

Who Needs to eFile an Income Tax Return?

Income tax return filing is not only a legal duty but also a financial responsibility that applies to various groups under different circumstances. Here’s a detailed look at who is required for ITR filing:

Salaried Individuals

If your total income before deductions under Sections 80C to 80U exceeds the basic exemption limit, you are mandated for income tax filing.

Firms

All corporate entities, including private limited companies, LLPs (Limited Liability Partnerships), and traditional partnerships, must file their ITR filing annually, regardless of profit or loss.

Directors and Partners

Individuals serving as directors in private limited companies or partners in LLPs are required to efile taxes reflecting their income and financial activities within the company.

Dividend Earners

If you receive dividends from sources such as mutual funds, bonds, equities, fixed deposits, and interest, you need to done the ITR efiling. This Income tax ITR filing ensures that all sources of income are properly reported and taxed if applicable.

Charity and Religious Trusts

Income received from managing charity funds, religious trusts, or voluntary contributions also necessitates the Income tax return filing meant to maintain transparency and adherence to tax laws.

Tax Refunds

Those eligible for tax refunds, including individuals and businesses, should file taxes online to claim refunds on taxes previously overpaid.

NRIs and Tech Professionals

Non-resident Indians (NRIs) and technology professionals must file an income tax return if their income derived from India surpasses the exemption limit or involves specific financial transactions.

Eligibility for Income Tax Filing

In India, the obligation to file an Income Tax Return (ITR) arises under certain conditions. One of the primary criteria for Income tax filing is when your gross total income exceeds the basic exemption limits, which are age-dependent:

• Individuals under 60 years: Rs 2.5 lakh
• Individuals between 60 and 80 years: Rs 3.0 lakh
• Individuals over 80 years: Rs 5.0 lakh

However, there are other specific circumstances that required for an efile ITR, even if your income is below these thresholds:

High-value Transactions: You must file an ITR if you have:

• Deposited Rs 1 crore or more in one or more current bank accounts.
• Deposited Rs 50 lakh or more in one or more savings bank accounts.
• Spent over Rs 2 lakh on foreign travel.
• Incurred electricity expenses exceeding Rs 1 lakh during the financial year.
• Had TDS (Tax Deducted at Source) or TCS (Tax Collected at Source) exceeding Rs 25,000 (or Rs 50,000 for senior citizens).

Business and Professional Income:

• Businesses: Mandatory if your total sales, turnover, or gross receipts exceed Rs 60 lakh during the financial year.
• Professionals: Mandatory if gross receipts exceed Rs 10 lakh during the financial year.

Income Tax Return Forms in India

In India, the process of efile Income Tax Returns (ITRs) is streamlined through various forms, each designed to cater to different types of taxpayers. Here’s a comprehensive overview of these income tax retun forms:

ITR-1: SAHAJ

This Income tax return form is designed for individuals whose annual income from salary or pension is below Rs. Fifty lakhs who own just one house property.

ITR-2: Beyond Business

Ideal for Non-Resident Indians (NRIs), directors of companies, and shareholders of private companies. This ITR form is used if you have capital gains income or foreign income or own two or more house properties and if your income exceeds Rs. 50 lakhs.

ITR-3: Professionals and Proprietorships

This ITR form Suitable for professionals and individuals running a proprietorship business in India.

ITR-4: Presumptive Taxation Enrollees

This Income tax return form is for individuals opting for the presumptive taxation scheme, where business income is below Rs. 2 crores or professional income is below Rs. 50 lakhs.

ITR-5: Partnerships, LLPs, and More

This income tax form must be filed by partnership firms, Limited Liability Partnerships (LLPs), associations, and bodies of individuals.

ITR-6: Companies

This form is Applicable to companies that are registered in India.

ITR-7: Special Entities

The Income tax form is Used by entities such as charitable/religious trusts, political parties, scientific research institutions, and colleges/universities.

Due Date for ITR Filing

For the Assessment Year (AY) 2024-25, the last date to file ITR (Income tax returns) under section 139(1) is July 31, 2024, unless extended by the government. It’s important for taxpayers to note that merely paying taxes does not fulfil all obligations; timely filing of the ITR is also mandatory to avoid penalties. Starting from the financial year 2017-18, a late ITR filing fee is imposed for returns filed after the deadline.

Here’s a summary of the key Income tax filing last dates or due dates for various categories of taxpayers for the Financial Year (FY) 2023-24:

• ITR Filing for Individuals and Entities Not Liable for Tax Audit: Due by July 31, 2024.
• ITR Filing for Taxpayers Under Tax Audit (excluding those involved in transfer pricing): Due by October 31, 2024.
• ITR Filing for Taxpayers Covered Under Transfer Pricing: Due by November 30, 2024.
• Due Date for Revised/Belated Return of Income for FY 2023-24: December 31, 2024.

Advantages of Income Tax Filing

Filing your Income Tax Return (ITR) provides a range of financial and legal benefits. Here are some key advantages of ITR  filing:

Legal Documentation

Your ITR serves as an official record of your income and taxes paid, acting as crucial proof for:

• Identity Verification: It is accepted as valid identity proof by various government and financial entities.
• Income Verification: It details your financial earnings and deductions, essential for major financial transactions like buying property or applying for a loan.

Claim Tax Benefits

Filing ITR allows you to claim tax deductions and exemptions under various sections of the Income Tax Act, effectively reducing your tax liability.

Essential for Financial Transactions

ITRs are often required for:

• Loan Applications: Banks and financial institutions typically require the last few years’ ITRs as proof of income.
• Visa Applications: Many countries require proof of financial records, such as ITRs, for visa applications to ensure the applicant’s financial stability.

Avoid Penalties

• Failing to file an ITR can result in penalties and fines, especially if you are liable to pay tax. Timely Income tax filing helps avoid these unnecessary costs.

Carry Forward Losses

If you incur any financial losses, these can be carried forward to subsequent years to be offset against future profits. This benefit is only available if you file your ITR.

Quick Loan and Card Approvals

Demonstrating a consistent tax record through file taxes online can speed up the approval process for loans and credit cards by showcasing financial reliability and regular income.

High-Value Investments and Transactions

For transactions involving high values, such as the purchase of property or high-premium insurance, having a filed ITR is often mandatory.

Refund Claims

If you’ve paid more tax than you owe (through TDS, etc.), Income tax filing is necessary to claim a refund. The refund process is straightforward and generally swift in efile taxes.

Compulsory If Meeting Certain Criteria

In some cases, like if your electricity bills or foreign travel expenses exceed a specified limit, ITR filing becomes mandatory regardless of your income level.

By filing your ITR, you not only comply with the law but also solidify your financial footprint, which can aid in many aspects of financial planning and obligations.

Documents Required for ITR eFiling

When preparing for your e Filing of Income Tax Return in India, it’s important to have all necessary documents handy to ensure a smooth and accurate submission process. Here’s a comprehensive list of the documents you may require for Income tax filing:

General Documents for ITR filing

• PAN (Permanent Account Number): Essential for every kind of financial transaction and tax-related activity.
• Aadhaar (Linked to PAN): Required for verification and linking to your tax records.
• Bank Account Details: We need to process any potential refunds or verify financial details.

Income-Related Documents

• Salary Slips: To verify your income from employment.
• Rent Receipts: If you are claiming House Rent Allowance (HRA).
• Form 16: Issued by your employer, detailing the tax deducted at source on your salary.
• Form-16A: For TDS on Income other than salary.
• Form-16B: For TDS on the sale of the property.
• Form-16C: For TDS on rent.
• Form 26AS: Your tax credit statement, which shows all taxes that have been deposited against your PAN.

Deductions and exemptions-related documents

• Interest Certificates: These are from banks and post offices for savings accounts and fixed deposits.
• Home Loan Details: If you’re claiming deductions on home loan interest.
• Proof of Tax-Saving Instruments: Includes life insurance, health insurance, Public Provident Fund (PPF), National Savings Certificates (NSC), ELSS mutual funds, etc.
• Income from Capital Gains: Documents related to the sale of assets like stocks or property.
• Rental Income: Lease agreements and rent receipts if you have rental property.
• Foreign Income and Dividend Income Proofs: Documents verifying income from foreign sources and dividends.

Penalty for Late Filing Income Tax Returns

When filing your Income Tax Return (ITR), it’s crucial to meet the Income tax return filing last date to avoid penalties and maximise benefits:

• Interest: If you miss the deadline, under Section 234A, you will incur an interest charge of 1% per month or part thereof on any unpaid tax amount.
• Late Fee: As stipulated by Section 234F, a late filing fee is imposed if you missed the last date to file ITR. The fee is Rs. 5,000 but is reduced to Rs. 1,000 for those with a total income below Rs. 5 lakh.
• Loss Adjustment: Timely filing of your ITR allows you to carry forward losses from investments or business activities, which can be offset against future income tax liabilities. Failing to file your Income tax returns on time results in forfeiting this benefit.

Procedure for eFiling of ITR in India

Filing your Income Tax Return (ITR) in India can be accomplished through two primary methods: offline to online and entirely online. Here’s a step-by-step guide on how to file income tax return online and offline to online:

eFiling ITR Offline to Online Method:

• Download the Appropriate ITR Form: Visit the official Income Tax Department website. Based on your income sources and category, download the correct ITR form using the Excel Utility or Java Utility available on the portal.
• Fill Out the Form Offline: After downloading, fill out the form on your computer. This allows you to work through your tax details at your own pace without needing an internet connection.
• Save the Form in XML Format: Once completed, save the form in XML format, as this is the required format for uploading to the e-filing portal.
• Upload the XML File to the e-Filing Portal: Log into your account on the e-filing portal. Navigate to the appropriate section to upload the XML file and submit your ITR.

e-Filing of Income Tax Returns Online

E-filing your Income Tax Returns (ITR) is a straightforward process once you’ve registered at the Income Tax e-filing portal and gathered all necessary documents. Follow these steps for your e file Income tax return efficiently:

Step 1: Log in to the Portal

Visit the official Income Tax Department e-filing website and click on “Login” at the top right corner.

Step 2: Enter Login Credentials

Input your registered username (usually your PAN) and password in the designated fields. Be mindful of case sensitivity in the password. Click “Continue” to proceed.

Step 3: Access E-Filing Services

After logging in, navigate to the “e-File” tab on the dashboard and select “File Income Tax Return” from the dropdown menu to start e file income tax return.

Step 4: Choose the Assessment Year and Filing Mode

On the “File Income Tax Return” page, specify the Assessment Year (AY) for the return you are filing. For example, AY 2024-25 corresponds to income earned from April 1st, 2023, to March 31st, 2024.

Select “Online” as the Mode of Filing. An offline option using the “Income Tax Utility” is available for certain scenarios.

Step 5: Select Taxpayer Category

Indicate whether you are filing as an Individual, Hindu Undivided Family (HUF), or other entity types. Click “Continue” after making your selection.

Step 6: Choose the Right ITR Form

Based on your taxpayer category and income details, the portal will suggest appropriate ITR forms. Choose the one that matches your income sources:

• ITR-1 (Sahaj) for salaried individuals with income from salary, one house property, and other sources such as interest.
• ITR-2 for individuals and HUFs with capital gains or foreign income, but no income from business/profession.
• ITR-4 (Sugam) for individuals with business income and presumptive income from professions.

Step 7: Reason for ITR Filing

Select your reason for filing, which might include regular assessment, claiming a refund, or filing a revised return.

Step 8: Review and Edit Pre-Filled Information

The portal may pre-fill certain sections based on data from employers, banks, etc. Verify each entry for accuracy and edit any incorrect information before proceeding.

Step 9: Review and Confirm ITR Return Details

Review a detailed display of your ITR, including income, deductions, and tax liability. Ensure all data is correct before moving forward.

Step 10: Make Tax Payment

If applicable, settle any tax dues via the e-payment gateway. Select your bank and preferred payment method, such as net banking or debit/credit card.

e-verify your return

After you have done your the e filing of income tax return, the next crucial step is to e-verify your return. This is an essential part of the efile taxes process, as it confirms the authenticity of your submission to the Income Tax Department. You can e-verify your ITR in several ways:

• Electronic Verification Code (EVC): Generated through your bank account, Demat account, or registered mobile number and email.
• Aadhar OTP: A one-time password sent to the mobile number linked to your Aadhaar, used for verification.
• Sending a Signed ITR-V: If electronic verification isn’t possible, you can mail a signed copy of ITR-V (Income Tax Return Verification) form through normal or speed post to the Centralized Processing Center, Income Tax Department in Bengaluru within 120 days from the date of filing.

IndiaFilings experts are here to help you effortlessly file your ITR with comprehensive support and guidance.

Steps to Take If You Miss the ITR Filing Deadline

If you miss the Income Tax Return (ITR) deadline, there are still avenues available to address the oversight:

File a Belated Return

According to Section 139(4) of the Income Tax Act, you can file a belated return for the Financial Year 2023-24 (Assessment Year 2024-25) up until December 31, 2024. Be aware that filing late can result in penalties and interest charges. It’s also important to note that most types of losses (except those related to house property) cannot be carried forward if you file a belated e filing of income tax return.

File an ITR-U (Updated Return)

The Finance Act of 2022 introduced the ITR-U, which allows taxpayers to update their tax returns within two years from the end of the relevant assessment year. This is useful for correcting any omissions or errors in the originally filed or belated returns. However, filing an updated ITR return incurs additional tax liabilities: a tax and interest charge of 25% if filed within the first year and 50% if filed during the second year after the original deadline.

To avoid the stress and additional costs associated with these options, it’s best to start your ITR filing process early.

Common Mistakes While e-Filing Income Tax

Your e Filing of Income Tax Return (ITR) in India, several common mistakes can complicate the process or even lead to penalties. Being aware of these pitfalls can help ensure a smooth ITR filing experience:

• Choosing the Wrong Tax Form: Different ITR forms cater to various income sources and taxpayer statuses. It’s crucial to select the correct income tax return form based on your income types, as specified on the Income Tax Department’s website.
• Incorrect PAN or Personal Information: Errors in entering your PAN, name, address, or date of birth can lead to the rejection or delayed processing of your tax return.
• Incorrect Bank Account Details: Providing wrong bank details can delay your ITR refund. Make sure to accurately enter your bank account number, IFSC code, and other relevant information.
• Not Claiming All Eligible Deductions: Many taxpayers miss out on reducing their tax liabilities by not claiming all eligible deductions for savings, investments, and certain expenses allowed under The Income Tax Act 1961.
• Failing to Disclose All Income Sources: All income earned during the year must be disclosed. Failure to report all income sources can lead to penalties and is considered tax evasion.
• Not E-verifying the Return: After filing your ITR, it must be verified electronically within the prescribed time limit. An unverified return is treated as if it has not been filed at all.
• Filing After the Deadline: Late submissions can incur penalties and fines. It’s important to file your return before the due date to avoid these additional costs.
• Omitting Capital Gains from Mutual Funds: Both long-term and short-term capital gains from mutual funds are taxable. Ensure these gains are reported correctly to avoid issues with the tax authorities.

By avoiding these errors, you can ensure that your ITR filing process is error-free and compliant with the tax laws, ultimately securing your peace of mind. At IndiaFilings, our experts can help you navigate the complexities of the Income-tax efiling process with ease.