Individuals who earn money in whatever way should file for income tax without exception. Because it is a legal obligation, failing to comply may result in severe fines. The government has redesigned the tax return process. It is now easier and less taxing than the previous version. There are several benefits to submitting an income tax return on a regular basis. This post will cover basic facts about filing income tax returns and explain why it is so important.

Types of ITR Forms

The types of ITR forms are:

ITR 1

Individuals with income from a salary, a single-family home, agriculture, or other means. Individual inhabitants with a total income of up to Rs. must complete this form. Fifty lakhs and up to Rs. 5,000 in agricultural income

ITR 2

This form is intended for individuals and HUFs generating income from sources other than profits and gain of business or profession. It might be from a financial gain, a lottery, overseas assets, or anything else, as long as the total income exceeds Rs. 50 lacs. Agriculture revenue should be greater than Rs. 5,000. It is also filed by people who purchased unlisted equity shares during the fiscal year.

ITR 3

Individuals and HUFs earn money via company or professional profits and gains. It must also be reported by persons with income as a firm partner.

ITR 4 (Sugam)

Individuals, HUFs, & Firms (other than LLP) with a total income of up to fifty lakhs from profession or business are considered residents. It also applies to persons who have chosen the presumptive income plan under Sections 44AD, 44ADA, and 44AE of the Income Tax Act.

ITR 5

Firms, Limited Liability Partnerships, Associations of Persons, Bodies of Individuals, and other entities file ITR 5.

ITR 6

Companies other than those proclaiming exemption under Section 11 submit ITR 6. (Income from property held for generous or religious purposes).

ITR 7

It must be submitted by those who fall under section 139(4A), section 139 (4B), section 139 (4C), or section 139 4(D), which might be an individual or a corporation.

Benefits of Income Tax Return Filing

The following are the advantages of filing an income tax return:

• It qualifies the taxpayer for loan processing.
• It aids in claiming a TDS refund or any other overpayment of tax.
• It also provides for the carrying forward of losses.
• It transforms a person into a responsible citizen.
• It aids in the avoidance of penalty requirements.
• Considered as financial proof for obtaining a loan or visa.
• It aids the government in keeping track of taxpayer revenue.

Reasons Why You Need to File for Income Tax Return

Reasons, why you need to file for Income Tax returns, are listed below:

• You might qualify for tax reductions or credits.
• The IRS may seek to verify your assets and income.
• You may be required to repay any taxes owed.
• If you have overseas assets or income, you may be obliged to file a return.
• Filing taxes can aid in the prevention of fraud and corruption.
• You may be suitable for a refund of taxes paid in the past.
• Tax preparation might help you enhance your credit score.
• Based on your tax returns, you may be eligible to obtain a loan or queue of credit in the future.
• Filing your taxes might help you minimise the amount you owe in future taxes.
• As an individual taxpayer, filing taxes can help safeguard your rights.

Consequences for Not Filing for Income Tax Return

• You might face severe fines and penalties.
• You might be barred from running for public office.
• You may lose your voting rights.
• Your company might be confiscated, and you could face tax evasion charges.
• You might be imprisoned for some time.
• Your passport may be revoked.
• You may need to pay back taxes, interest, & penalties that you evaded in the past.
• Your name might be included in a registry of tax evaders.
• You may lose employment if you are convicted of tax evasion or fraud.
• Your entire corporation might face sanctions and jail time if you are a company.

How to File Income Tax Returns in India

The process to file Income Tax Returns in India involves the following steps:

Calculating the Total Income

Taxpayers commonly understand total income as the total amount of revenue generated in a fiscal year. However, the Income Tax Act requires that total gross income be computed by aggregating all of the following forms of earnings:

• Salaries are a source of income.
• Income or perceived income created by real estate
• Profit generated by a business
• Gains in capital
• Other sources of income are used to supplement your income.

Filing Income Tax Manually

Individuals with specific qualifications can file their income tax returns in paper form. Individuals can prepare and submit their returns in person at an Income Tax Office. Taxpayers with salary income and up to one residential property can submit ITR-1 SAHAJ. To file an income tax return manually, the taxpayer must meet the following requirements:

• In the fiscal year, the taxpayer is Eighty years old or older.
• The taxpayer's gross income is less than five lakhs, and no income tax refund claim exists.

When filing an income tax return by hand, the taxpayer should print two copies of Form ITR-V. The taxpayer may keep one copy of the ITR-V.

Income Tax Return Filing with Excel

The Income Tax Department provides an excel utility for filing income tax returns. With no internet access, the offline excel tool for tax return filing may be utilised to create and file IT returns. The taxpayer can use the excel tool to create & file an income tax return by following the procedures below.

• Before the user may begin filling out the form, Excel macros must be enabled.
• The cells that require data entry are indicated in green.
• Mandatory fields in red font must be filled out.
• Fields that are not required are shown in black type.
• The excel sheet has several tabs. All sections must be filled out.
• After completing all of the relevant papers, it must be verified. When these sheets are authenticated, the tax to be paid is computed automatically. The application subsequently generates an XML file that can be submitted to the Income Tax Department portal to finish completing the return.

Income Tax Return Filing with Java Application

The Java programme for submitting an income tax return filing may be used on OS or Operating System platforms such as Windows 7, 8, Linux, or Mac OS if it contains the JRE or Java Running Environment. The following are the fundamental stages involved in submitting income tax returns using the Java tool:

• The most recent version of Java form in a zip file must be downloaded and unzipped.
• By clicking the "New" instruction, a new ITR java form is produced.
• Using the "Open" command, data is imported by choosing its path from an XML file.
• Personal information can be automatically entered using the "Prefill" option.
• The XML file is then saved in draught form by using the "Save Draft" command.
• Using the "Recalculate" option, data entered in the fields are recalculated to confirm the same.
• Finally, there is the AY2017-18 Income Tax Excel Utility. Income Tax Java Utility for the Fiscal Year 2017-18 The completed form is saved and filed using the "Save" and "Submit" instructions on the Income Tax website's e-filing interface.

Income Tax Return Verification

• Verification or substantiation of an income tax return implies demonstrating to the Income Tax department that the return filed by or on behalf of the taxpayer was submitted to the Income Tax department's website only after the taxpayer's authorization was obtained. The verification helps the department to ensure that the information in return is correct based on the taxpayer's knowledge.
• An income tax return can be verified online or by providing an ITR-V form as an attachment. Substantiation is accomplished by digitally or physically attesting the applicant's signature. Filing an income tax return with a digital signature does not require verification from the applicant; however, filing the physical method does require confirmation from the applicant. The tax filing procedure will be incomplete if the applicant does not verify the ITR-V form. As a result, a verification must be conducted as soon as the income tax return is filed.
• The applicant has many possibilities when it comes to online validation of the income tax return application filed during the uploading process. Email and phone numbers can also be utilised if the taxpayer's taxable income is less than Rs.5 lakhs & the refund amount is less than Rs.100. In other circumstances, an OTP must be generated using an Aadhar Card. To use the Aadhar-based OTP technique, the taxpayer must ensure that the cellphone number listed on the Aadhar card is in an active connection state.

Conclusion

An income tax return is a statement sent by the taxpayer to the Income Tax Department alerting the department of the taxpayer's financial data. The facts are presented for each fiscal year and include information such as the taxpayer's taxable income and tax liability. Different forms are used to file income tax returns depending on the type of taxpayer. When a taxpayer's taxable income exceeds the basic exemption level, he or she is required to submit an income tax return. The basic exemption limit is the greatest amount of income that is not taxable. A taxpayer gives information regarding taxable income and its source, appropriate deductions, and the amount of tax paid by completing income tax forms.