What is income tax returns? Briefly explanation in easy way.

Income tax return

According to the Income Tax Act of 1961, both the Indian State and Central Governments tax both personal and business income. Such taxes are viewed as the main source of money for a variety of citizen- and development-focused initiatives.

The taxpayer is solely responsible for determining whether any taxes are owed to the government. Taxpayers are required to file an income tax return (ITR) each financial year to determine whether any taxes are owing.

What Is An ITR(Income tax return)?

Simply explained, an ITR is a government-issued form that asks you to report all of your taxable income. As you claim tax deductions, this declaration is subsequently utilized to determine your overall tax liability.

ITR forms in India typically come in a spectrum from ITR 1 to ITR 7, each with a distinct purpose. These consist of:

1. ITR – 1 – For residents who earn up to 50 lakh rupees a year through salaries, pensions, investments, or other comparable sources.
2. ITR – 2 – For anyone whose annual income exceeds 50 lakh rupees and comes from the mode of entry, capital gains, overseas assets, or equity shares.
3. ITR- 3 – For income coming from a job, a business, a partnership, a directorship, or any other alleged source that is more than Rs. 50 lakh.
4. ITR – 4 – Every revenue from ITR- 1 and other presumed sources of a like nature.
5. ITR – 5 – Firms, LLPs, AOPs, and BOIs can all formally use this form.
6. ITR – 6 – Businesses that do not assert any exemption under Section 11 of the IT Act must fill out this form.
7. ITR – 7 – For those people or companies covered by sections 139 (4) (a) through (4) (d).

You can only file an ITR if and when:

• Below 60 years – INR 2.5 lakh
• 60-80 years – INR 3 lakh
• Above 80 years – INR 5 lakh

– If you receive income from multiple sources.

– If you own property abroad.

– If you are a company, business, or firm.

You can file your income tax returns either online or offline after your ITR eligibility has been established.

Read also: How do I get knowledge about tax system of India?

Documents required to fill ITR;

Prior to beginning your e-filing procedure, it is crucial to have all the necessary documents close to hand.

• Bank and post office savings account passbook, PPF account passbook
• Salary slips
• Aadhar Card, PAN card
• Form-16– TDS certificate from your employer, which outlines the pay you were given and any TDS that was withheld from it. Interest certificates from banks and the post office.
• Form-16A, – the existing tax rules, you must receive proof from the buyer if you have sold a property, proving the TDS deducted on the amount paid to you.
• Form-16B – if you have sold a property, from the buyer, demonstrating the TDS withheld from the amount received to you.
• Form-16C – for supplying information about any TDS that was taken from the rent you received from your tenant.
• Form 26AS – your annual tax statement that is combined. It contains all the details regarding the taxes that were deposited against your PAN.

1. TDS deducted by banks
2.  TDS deducted by your employer
3. TDS taken from payments made to you by any other organisations
4. Advance taxes deposited by you
5. Self-assessment taxes paid by you
6. Tax saving investment proofs
7. Evidence needed to support deductions under sections 80D to 80U (health insurance premium for self and family, interest on education loan)
8. Home loan statement from bank

Hope this was useful,

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