What is an Income Tax Return (ITR)?
An Income Tax Return (ITR) is a form used by taxpayers in India to declare their income, deductions, and taxes paid for a specific financial year to the Income Tax Department. Based on the information provided, the department assesses whether additional tax needs to be paid or if a refund is due.
What is Advance Tax, and Who Needs to Pay it?
Advance Tax is the income tax that needs to be paid in advance if your tax liability exceeds ₹10,000 in a financial year. It’s typically paid in four installments: 15% by June 15th, 45% by September 15th, 75% by December 15th, and 100% by March 15th. Self-employed individuals, businesses, and taxpayers with substantial income from sources other than salary usually need to pay advance tax
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Who is required to file an ITR?
Individuals, Hindu Undivided Families (HUFs), companies, and firms whose income exceeds the basic exemption limit (₹2.5 lakh for individuals below 60 years) must file an ITR. Additionally, filing is mandatory for those who wish to claim tax refunds, have foreign assets, or meet specific conditions like incurring expenses on foreign travel or electricity consumption exceeding certain limits.
What is a Tax Audit, and When is it Required?
A Tax Audit is a review or inspection of the accounts of a taxpayer by a chartered accountant (CA) under Section 44AB of the Income Tax Act 1961 (ITA). It is required if your business turnover exceeds ₹1 crore (or ₹10 crores for certain digital transactions) or your profession’s gross receipts exceed ₹50 lakh. It’s also applicable to those opting for the presumptive taxation scheme but declaring income lower than the deemed profits..
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What are the due dates for filing an ITR?
The due date for filing ITR for individual taxpayers is usually July 31st of the assessment year (e.g., July 31, 2024, for FY 2023-24). For companies or taxpayers requiring an audit, the due date is generally October 31st. However, the government may extend these dates.
What is the difference between AY (Assessment Year) and FY (Financial Year)?
The Financial Year (FY) is the year in which you earn your income, while the Assessment Year (AY) is the year following the financial year when the income is assessed and taxed. For instance, income earned in FY 2023-24 is assessed in AY 2024-25.
What happens if I miss the ITR filing deadline?
If you miss the deadline, you can still file a belated return until December 31st of the assessment year, subject to a late fee. The penalty ranges from ₹1,000 to ₹5,000, depending on the filing date and income level. Additionally, if you owe taxes, interest under Section 234A, 234B, and 234C may apply.
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How can I rectify mistakes in my filed ITR after receiving an intimation under Section 143(1)?
If you receive an intimation under Section 143(1) showing a discrepancy, you can file a rectification request online under Section 154 through the income tax portal. The rectification can correct errors related to tax credits, deductions, or any apparent mistake in the ITR.
What are the consequences of not filing ITR at all?
Failing to file an ITR can result in penalties, interest, and prosecution in severe cases. The penalty for non-filing can be up to ₹10,000 under Section 234F. You may also be disallowed from carrying forward losses, and the Income Tax Department may issue a notice for non-filing.
What documents should I keep handy while filing my ITR?
While filing your ITR, keep the following documents handy: PAN card, Aadhaar card, bank statements, Form 16, Form 26AS (Tax Credit Statement), details of other income sources, investment proofs for deductions, home loan interest certificate, and any relevant expense receipts.
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What is Form 26AS, and why is it important for filing ITR?
Form 26AS is a consolidated tax statement issued by the Income Tax Department, showing all tax-related details like TDS, advance tax paid, self-assessment tax, and refunds for a particular financial year. It’s essential for filing an accurate ITR as it helps reconcile the taxes deducted and paid with the ITR.
How is TDS different from Advance Tax?
TDS (Tax Deducted at Source) is the tax deducted by the payer (e.g., employer, bank) at the time of payment, while Advance Tax is paid by the taxpayer themselves during the year in installments if their estimated tax liability exceeds ₹10,000. TDS reduces the burden of tax payment at year-end, while advance tax is primarily for income not subject to TDS.
Can I file an ITR for previous years if I missed filing?
Yes, you can file a belated ITR for the previous year before December 31st of the assessment year, subject to penalties and interest. Beyond this, you can’t file a return unless you receive a notice from the Income Tax Department, in which case you may file under Section 148 of ITA.
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What is the process for correcting personal details like name, address, or bank account in my ITR?
To correct personal details in your ITR, you can file a rectification request online under Section 154 or revise your return if you haven’t missed the deadline. For bank account details, you can update them directly through the income tax e-filing portal without filing a rectification or revision.
These additional questions cover more specific and detailed aspects of the Income Tax Return process in India.
How do I choose the correct ITR form?
The ITR form depends on your source of income
Can I revise my ITR after filing?
Yes, if you find any error or omission in the original ITR, you can revise it before the end of the assessment year or before the completion of the assessment, whichever is earlier. There’s no limit on the number of revisions.
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What is an e-verification of ITR, and How do I complete it?
After filing the ITR, it needs to be verified. E-verification can be done using Aadhaar OTP, net banking, or by sending a signed ITR-V form to the CPC, Bengaluru. E-verification must be done within 30 days of filing the ITR to complete the process.
How long does it take to get a refund after filing an ITR?
Typically, refunds are processed within 20-45 days after the ITR is verified, but it can vary based on factors like the accuracy of details provided, verification, and processing by the Income Tax Department. The refund status can be checked online through the income tax portal or the NSDL website.
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