It’s that time of the year again when we need to file our income tax returns (ITRs) in India. While the process of filing ITRs may seem tedious and overwhelming, it is a crucial step in managing our finances and ensuring compliance with the law. However, we understand that the process can be confusing and stressful, especially for those filing for the first time.
That's why we are excited to bring you this comprehensive checklist to make the process of filing ITRs in India hassle-free and easy. Whether you are a seasoned taxpayer or filing for the first time, our checklist covers everything you need to know to file your ITRs accurately and on time.
So, sit back and relax as we guide you through the various steps involved in filing ITRs in India. From eligibility criteria and required documents to filing options and common mistakes to avoid, we've got you covered. We've also included some frequently asked questions to address any lingering doubts or concerns you may have.
Evaluate eligibility for ITR
The first step towards filing ITRs in India is to determine whether you are eligible to file an ITR. The Income Tax Department has laid down certain criteria for taxpayers to file their ITRs.
Individuals with an income exceeding the prescribed basic exemption limit are required to file ITRs. The Budget of 2023 has increased the threshold limit for individuals opting for the new tax regime. What this means is, the basic exemption limit in the new tax regime has been increased to INR 3 lakh, which was INR 2.5 lakh earlier.
Apart from the above criteria, individuals who earn income from sources other than their salary, such as rent, interest, capital gains, etc., are also required to file ITRs, irrespective of their income level. Additionally, individuals who have earned income from a business or profession or those who have losses to carry forward are also required to file ITRs.
Documents Required
Before filing your Income Tax Return (ITR) in India, it is crucial to gather and keep all the required documents ready. This ensures that you file your ITRs accurately and on time. Here is a comprehensive list of documents that you need to keep handy while filing your ITRs -
Permanent Account Number (PAN) Card
Aadhaar Card
Bank Statements
Form 16 issued by your employer
TDS Certificates
Proof of Investments
Capital Gains Statements
Rent Receipts
Types of ITR Forms
It is essential to identify which ITR form is applicable to you based on your sources of income and other factors. Filing the wrong ITR form may result in the rejection of your return, and you may have to re-file your ITR, which can lead to delays and penalties.
Here are the different types of ITR forms available for taxpayers in India:
ITR-1: This form is for individuals with a total income of up to Rs. 50 lakh, who have income from salaries, one house property, other sources (interest, etc.), and agricultural income up to Rs. 5,000.
ITR-2: This form is for individuals and Hindu Undivided Families (HUFs) with a total income of up to Rs. 50 lakh, who have income from salaries, more than one house property, capital gains, other sources (interest, etc.), and agricultural income exceeding Rs. 5,000.
ITR-3: This form is for individuals and HUFs who have income from proprietary businesses or professions.
ITR-4: This form is for individuals, HUFs, and firms with a total income of up to Rs. 50 lakh, who have income from a business or profession computed under the presumptive income scheme.
ITR-5: This form is for partnerships, limited liability partnerships (LLPs), associations of persons (AOPs), and bodies of individuals (BOIs).
ITR-6: This form is for companies not claiming exemption under Section 11 of the Income Tax Act.
ITR-7: This form is for persons, including companies, who are required to furnish returns under Section 139(4A), Section 139(4B), Section 139(4C), or Section 139(4D) of the Income Tax Act.
Common Mistakes to Avoid
Filing Income Tax Returns (ITRs) can be a daunting task, and it is common for taxpayers to make mistakes while filing their returns. Here are some of the most common mistakes to avoid:
Providing Incorrect Personal Details: Ensure that you enter the correct personal details, such as your name, date of birth, and PAN card number. Any incorrect information may result in the rejection of your ITR.
Mismatch of Income and Deductions: One of the most common errors made by taxpayers is the mismatch of income and deductions. Ensure that you accurately report your income from all sources and claim deductions only for the eligible expenses.
Missing Out on Exemptions: Taxpayers often forget to claim deductions or exemptions they are eligible for, such as HRA, LTA, or medical expenses. It is essential to keep track of all the exemptions and deductions and claim them while filing your ITR.
Not Verifying Your ITR: After filing your ITR, it is important to verify it either electronically or by sending a signed physical copy to the Income Tax Department. Failing to verify your ITR may result in its rejection.
Filing the Wrong ITR Form: Filing the wrong ITR form is a common mistake made by taxpayers. Ensure that you download and fill out the correct ITR form based on your sources of income and other factors.
Bottom Line
Filing Income Tax Returns (ITRs) is an important responsibility of every taxpayer in India. It not only helps in fulfilling our civic duty but also ensures that we are compliant with the tax laws and avoid any penalties or legal action. We hope that this information will help you file your ITRs accurately and on time.
At JJ Tax, we understand that filing ITRs can be a complex and time-consuming process. That's why our team of experts is here to help you navigate the process and ensure that you file your ITRs without any errors. Whether you need help with gathering the required documents, filling out the correct ITR form, or verifying your ITR, our team is here to assist you.