Simple Overview of Your Income Tax Returns

Income Tax Returns

The Govt of India, levies taxes on the Income of all persons including individuals, Hindu Undivided Families (HUFs), companies, firms, association of persons, body of individuals, local authority and any other artificial judicial person. The levy is governed by the Indian Income Tax Act, 1961. Its administration runs on Self computation mechanism. Accordingly, an Assessee is required to compute his taxable income, tax liability, pay off such taxes and report the same to the Tax Authorities in the return of Income.

Income Tax Returns

Abbreviated as Income Tax Returns, Income Tax returns are mandatory to be filed by Assessees having taxable income and a valid PAN. However Assesses having their Total Income below the Basic exemption limit are not required to furnish their return of Income under the Income Tax Act,1961.

The year to which the ITR relates is termed as Previous Year (P.Y.). The same is filed in the next year i.e. Assessment Year (A.Y.). Due dates for filing Income Tax Returns are as follows :

  1. Assessees whose books of Accounts are subject to Audit on 30th Sept of the A.Y.
  2. Assessees covered under the Transfer pricing provisions on 30th Nov of the A.Y.
  3. Others on 31st Aug of the A.Y.

The ITR is the detailed report of the nature and amount of Income earned &/or received by an Assessee along with details of various deductions and exemptions availed off, credit of taxes paid earlier, set off and carry forward of losses , clubbing of Income etc. according to the applicable Tax laws. It also contains general Information regarding Name, Date Of Birth, Address, PAN, ITO Ward, Bank Account details etc of the Assessee. It contains separate pages for each Schedule / Annexure to ITR. Certain ITRs require detailed Balance sheet and Profit & Loss Account also.

The ITR contains Gross Total Income of the Assessee which is aggregate of the following five heads of Income :

  • Income under the head or Salaries
  • Income under the head or House Property
  • Income under the head or Profit and Gains of Business or Profession.
  • Income under the head or Capital Gain.
  • Income under the head or Other Sources.
After aggregating income under various heads, losses are adjusted and the resultant figure is called  Gross Total Income Tax[ GTI ]From Gross Total Income , Deductions u/s 80 are allowed. The resultant figure is called a Total Income Tax on which Rates of Taxes are applied.

There are different Income Tax Returns for different Assesses depending on their Incomes.They are as follows :

  1. ITR 1 Called as SAHAJ For an individual whose total income includes – Income from Salary/ Pension; or Income from One House Property (excluding brought forward losses); or Income from Other Sources (excluding Winning from Lottery and Income from Race Horses). This return form cannot be used where total income includes – Income from more than one house property; or Winnings from lottery or income from Race horses; or Capital Gains etc.
  2. ITR 2A –For an individual or HUF whose total income includes – Income from Salary / Pension; or Income from House Property; or Income from Other Sources (including Winning from Lottery and Income from Race Horses).This return form cannot be used where total income includes – Capital Gains; or Income from Business or Profession; etc.
  3. ITR 2 –For an individual or HUF whose total income includes – Income from Salary / Pension; or House Property; or Capital Gains; or Other Sources (including Winning from Lottery and Income from Race Horses). This return form cannot be used where total income includes – Income from Business or Profession.
  4. ITR 3 –For individuals or HUFs being partners in firms and not carrying out business or profession under any proprietorship.
  5. ITR 4 – Called as SUGAM For an individual or HUF whose total income includes Business income where such income is computed in accordance with section 44AD and 44AE of the Act, or Salary/ Pension; or Income from One House Property (excluding brought forward losses); or Other Sources (Excluding winning from lottery and Income from Race Horses). This return form cannot be used where total income includes – Income from more than one house property; or winnings from lottery or income from Race horses; or Capital Gains; or Income from Speculative Business etc.
  6. ITR 4 –For individuals or HUFs having proprietary business.
  7. ITR 5 –ForFirms, Co-operative Banks, Co-operative Societies, Limited Liability Partnerships (LLP), Association of Persons (AOP), Body of Individuals (BOI) and Artificial Judicial Persons.
  8. ITR 6 –ForCompanies other than companies claiming exemption under section 11
  9. ITR 7 –For persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D).
  10. ITR V –Acknowledgement Form for all ITR Forms except ITR 7.

After online submission of the ITR forms (Online submission not required in certain cases), the Acknowledgement in ITR V is to be signed & sent to the Income tax department-CPC Bangalore, by post to complete the return filing process. ITR-V should reach Central Processing Centre (CPC) within a 120 days of filing of return.

Note: CPC generally takes about 3 weeks from the date of posting, to send acknowledgement of ITR-V on your registered email id. If it has been more than 3 weeks and you have not received the acknowledgement on your registered email id, you need to post another copy of signed ITR- V immediately to the Income Tax Department-CPC.

Carry forward of Losses:

It is important to file your income tax return on time, in case  Income Tax Return is not filed within due date, Losses cannot be carried forward to next A.Y. (except House Property Loss, Unabsorbed Depreciation and Capital Expenditure on Scientific Research).

Revised Return Provisions:

In case if Income Tax Return is filed on or before due date, but later any omission or mistake was noticed, a revised return of Income can be filed within 1 yr from end of A.Y. or before completion of Assessment, whichever is earlier. Income Tax Returns can be revised any number of times but within the given time limit. A belated return cannot be revised.

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