Income Tax Return Filing
Tax Pain: Nothing hurts more than paying income tax, except when you don't have to pay it.
— well, congratulations and welcome if you belong to the first lot
And here we are, to help you banish all your tax worries and bring harmony to your financial world.
The Income Tax Return (ITR), refers to the form that taxpayers use to provide details about their income earned and the applicable taxes to the income tax department.
We have seven different forms establised by the Income Tax department: ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7) which are designed to accommodate various types of taxpayers, including individuals, HUFs, and companies.
The specific ITR form that a taxpayer should use depends on factors such as the
- sources of income,
- the amount of income earned, and
- the taxpayer’s category.
File ITR in India If
- Gross annual income exceeds basic exemption limit.
- Seeking income tax refund.
- Earned from or invested in foreign assets.
- Applying for visa or loan.
- Taxpayer is a company or firm.
- Losses need to be carried forward.
Additionally, file ITR even if income is below exemption limit, but meet these conditions:
- Deposited over Rs. 1 crore in ‘current’ bank account.
- Deposited over Rs. 50 lakh in ‘savings’ bank account.
- Spent over Rs. 2 lakh on foreign travel.
- Electricity expenditure exceeds Rs. 1 lakh.
- TDS or TCS exceeds Rs. 25,000 (Rs. 50,000 for seniors).
- Business turnover exceeds Rs. 60 lakh.
- Professional income exceeds Rs. 10 lakh.
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What are the types of Deductions under Income Tax?
| Investment options | Average Interest | Lock-in period for | Risk factor |
|---|---|---|---|
| ELSS funds | 12%-15% | 3yrs | High |
| NPS Scheme | 8%-10% | Till 60years of age | High |
| ULIP | 8%-10% | 5yrs | Medium |
| Tax saving FD | 8.40% | 5yrs | Low |
| PPF | 7.90% | 7.5yrs | Low |
| Senior citizen savings scheme | 8.60% | 5years (can be extended for other 3 years) | Low |
| National Savings Certificate | 7.9% | 5yrs | Low |
| Sukanya Samriddhi Yojana | 8.50% | Till girl child reaches 21 years of age (partial withdrawal allowed when she reached 18 years) | Low |
Section 80TTA – Interest on Savings Accounts
Individuals and HUFs have the option to claim a maximum deduction of Rs 10,000 on interest income earned from their savings account with a bank, co-operative society, or post office. However, it’s important to include the interest from a savings bank account in the category of other income.
Please note that Section 80TTA deduction cannot be availed on interest income from fixed deposits, recurring deposits, or interest income from corporate bonds.
Section 80TTB – Interest From Deposits Held by Senior Citizens
Under Section 80TTB, senior citizens (age 60 or above) who hold deposits with banks, post offices, cooperative societies, or similar institutions can claim a deduction of up to Rs 50,000 on the interest income earned. Additionally, the TDS deduction limit under Section 194A for senior citizens has been increased to Rs 50,000. It is important to note that no deduction under Section 80TTA is allowed in such cases.
Furthermore, senior citizens aged 75 and above who solely receive pension and interest income are exempt from filing an income tax return (ITR) as tax is deducted at source by banks.
Section 80GG – Income Tax Deduction on House Rent Paid
- Individuals who do not receive House Rent Allowance (HRA) can claim a deduction for the rent paid under Section 80GG. However, the taxpayer, their spouse, or minor child should not own residential accommodation at the place of employment.
- In addition, the taxpayer should not have a self-occupied residential property at any other location.
- To be eligible for the deduction, the taxpayer must be currently living on rent and actively paying rent.
- This deduction is available to all individuals, regardless of their employment or residential status.
Deduction available is the least of the following:
- Deduction: Rent paid – 10% of adjusted total income.
- Minimum deduction: Rs 5,000 per month.
- Deduction can also be 25% of adjusted total income, if lower.
- Adjusted Gross Total Income considers certain deductions, exempt income, capital gains, and non-resident/foreign company income.
- Using our online ITR e-filing software simplifies calculations.
- From FY 2016-17, the deduction limit increased to Rs 5,000 per month from Rs 2,000 per month
Section 80E – Interest on Education Loan
Individuals can claim a deduction for the interest paid on loans taken for higher education. This deduction applies to loans taken for themselves, their spouse, children, or a student for whom they are a legal guardian.
Under section 80E, the deduction is available for a maximum of 8 years, starting from the year of repayment of interest or until the entire interest is paid off, whichever comes first. There is no limit on the amount that can be claimed.
Section 80EEA – Interest on Home Loan For First-Time Home Owners
Section 80EEA offers an additional deduction for interest paid on a home loan. While Section 24 allows an exemption of up to Rs 2 lakh on home loan interest, this section provides an extra deduction of Rs 1.5 lakhs for homebuyers who have taken a home loan and pay interest on it.
FY 2017-18 and FY 2016-17
For FY 2017-18 and FY 2016-17, taxpayers can claim this deduction if they have taken a loan in FY 2016-17. The deduction under section 80EE is applicable to individuals who own only one house property at the time of loan sanction. The property’s value should be below Rs 50 lakh, and the home loan amount should be less than Rs 35 lakh.
The loan must have been sanctioned between 1 April 2016 and 31 March 2017. Additionally, there is an extra deduction of Rs 50,000 available on the home loan interest, in addition to the Rs 2 lakh deduction allowed under section 24.
FY 2013-14 and FY 2014-15
For FY 2013-14 and FY 2014-15, taxpayers could claim a deduction under this section for a first-time house valued at Rs 40 lakh or less. This deduction is applicable when the loan amount during this period is Rs 25 lakh or less. The loan must have been sanctioned between 1 April 2013 and 31 March 2014. The maximum deduction allowed under this section is Rs 1 lakh, and it is applicable for FY 2013-14 and FY 2014-15.
Section 80D – Deduction on Medical Insurance Premium
As an individual or HUF, you can claim a deduction of Rs. 25,000 under section 80D for insurance covering yourself, your spouse, and dependent children.
Additionally, you can claim an extra deduction of up to Rs. 25,000 for insurance of parents who are below 60 years of age.
If your parents are 60 years or above, the deduction amount is Rs. 50,000.
In the case where both the taxpayer and parents are 60 years or above, the maximum deduction available under this section is Rs. 1 lakh.
For preventive health check-ups, a cumulative additional deduction of Rs. 5,000 is allowed from FY 2015-16. For example, if Rihan is 65 years old and his father is 90 years old, the maximum deduction Rohan can claim under section 80D is Rs. 1,00,000.
Section 80DD – Deduction for Medical Treatment of a Dependent with Disability
Section 80DD provides a deduction to resident individuals or HUFs for expenses related to the medical treatment, training, and rehabilitation of a handicapped dependent relative. It also includes payments or deposits made to specified schemes for the maintenance of the handicapped dependent relative.
The deduction amount varies based on the level of disability:
- If the disability is 40% or more but less than 80%, a fixed deduction of Rs. 75,000 is allowed.
- If the disability is 80% or more (severe disability), a fixed deduction of Rs. 1,25,000 is allowed.
To claim this deduction, a certificate of disability from the prescribed medical authority is required. From FY 2015-16, the deduction limits have been increased to Rs. 75,000 (from Rs. 50,000) and Rs. 1,25,000 (from Rs. 1,00,000) respectively.
Section 80DDB – Deduction for Specified Diseases
- For individuals and HUFs below age 60:
A deduction of up to Rs. 40,000 is available for resident individuals or HUFs. It can be claimed for medical expenses incurred on specified diseases or ailments for themselves or their dependents. HUFs can claim the deduction for medical expenses incurred on these ailments for any member of the HUF. - For senior citizens and super senior citizens:
If the individual for whom the expenses are incurred is a senior citizen, the individual or HUF taxpayer can claim a deduction of up to Rs. 1 lakh. Previously, the deduction limits for senior citizens and super senior citizens were Rs. 60,000 and Rs. 80,000 respectively, but now it is a common deduction of up to Rs. 1 lakh for all senior citizens, including super senior citizens. - For reimbursement claims:
Any reimbursement of medical expenses by an insurer or employer will reduce the deduction amount that can be claimed under this section.
Note that a prescription from the concerned specialist is required to claim the deduction for medical treatment. Please refer to our detailed article on Section 80DDB for more information.
Section 80U – Deduction for Disabled Individuals
A resident individual with a physical disability (including blindness) or mental retardation can claim a deduction of Rs. 75,000. For severe disabilities, the deduction limit is Rs. 1,25,000.
Since FY 2015-16, the deduction limit for Section 80U has been increased from Rs. 50,000 to Rs. 75,000 and from Rs. 1,00,000 to Rs. 1,25,000.
Section 80G – Income Tax Benefits Towards Donations for Social Causes
Donations specified under Section 80G are eligible for deductions of either 100% or 50%, with or without restrictions.
Starting from FY 2017-18, cash donations exceeding Rs 2,000 are not allowed as deductions. To qualify for an 80G deduction, donations above Rs 2,000 should be made using non-cash modes.
- Donations with 100% deduction without any qualifying limit
- National Defence Fund set up by the Central Government
- Prime Minister’s National Relief Fund
- National Foundation for Communal Harmony
- An approved university/educational institution of National eminence
- Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
- Fund set up by a State Government for the medical relief to the poor
- National Illness Assistance Fund
- National Blood Transfusion Council or to any State Blood Transfusion Council
- National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
- National Sports Fund
- National Cultural Fund
- Fund for Technology Development and Application
- National Children’s Fund
- Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
- The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
- The Maharashtra Chief Minister’s Relief Fund during October 1, 1993 and October 6,1993
- Chief Minister’s Earthquake Relief Fund, Maharashtra
- Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat
- Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat (contribution made during January 26, 2001 and September 30, 2001) or
- Prime Minister’s Armenia Earthquake Relief Fund
- Africa (Public Contributions — India) Fund
- Swachh Bharat Kosh (applicable from financial year 2014-15)
- Clean Ganga Fund (applicable from financial year 2014-15)
- National Fund for Control of Drug Abuse (applicable from financial year 2015-16)
- Donations with 50% deduction without any qualifying limit
- Jawaharlal Nehru Memorial Fund
- Prime Minister’s Drought Relief Fund
- Indira Gandhi Memorial Trust
- The Rajiv Gandhi Foundation
- Donations to the following are eligible for a 100% deduction, subject to 10% of the adjusted gross total income:
- Government or approved local authority, institution, or association promoting family planning.
- Donations by a company to the Indian Olympic Association or any other notified association or institution in India for sports and games infrastructure development or sponsorship.
- Donations to the following are eligible for a 50% deduction, subject to 10% of the adjusted gross total income:
- Any other fund or institution meeting the conditions in Section 80G(5).
- Government or local authority for charitable purposes other than family planning promotion.
- Authority constituted in India for housing accommodation, planning, or development of cities, towns, villages.
- Corporation mentioned in Section 10(26BB) for promoting minority community interests.
- Repairs or renovation of notified temples, mosques, gurudwaras, churches, or other places.
Section 80GGB – Company Donation to Political Parties
Indian companies can claim a deduction under Section 80GGB for contributions made to political parties or electoral trusts. However, the contribution should be made through non-cash modes.
Section 80GGC – Deduction on Donations By a Person to Political Parties
Individual taxpayers can claim a deduction under Section 80GGC for contributions made to political parties or electoral trusts. However, this deduction is not available for companies, local authorities, and artificial juridical persons funded by the government. The contribution must be made through non-cash modes to be eligible for the deduction.
Section 80RRB – Deduction on Income via Royalty of a Patent
Deduction under Section 80RRB is applicable for individuals who are resident Indians and hold a registered patent under the Patents Act 1970, granted on or after 1 April 2003. This deduction allows for a maximum of Rs. 3 lakh or the actual income received from royalty, whichever is lower. To claim the deduction, the taxpayer must provide a certificate, as per the prescribed format, duly signed by the relevant authority.
Section 80TTB – Interest Income on Deposits for Senior Citizens
The Budget 2018 introduced a new section, 80TTB, which allows senior citizens to claim deductions on interest income from deposits. The maximum deduction limit under this section is Rs. 50,000. It is important to note that no further deduction under section 80TTA will be allowed for senior citizens.
In addition to the introduction of section 80TTB, section 194A of the Income Tax Act will also be amended. This amendment increases the threshold limit for Tax Deducted at Source (TDS) on interest income payable to senior citizens. The previous limit of Rs. 10,000 has been raised to Rs. 50,000 as per the latest Budget provisions.
Commence Your Filing Journey!
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Don’t have Form 16?
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Hopped between jobs within a single financial year?
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Self Employed?
For the self-starters, you can manually file your tax returns without uploading Form-16. You also have the option to upload Form 26AS.
Earning from Business?
If you have income from trading, speculative activities, or presumptive sources, fret not. You can file your returns by including all these aspects.
Invested in Stocks & Mutual Funds?
Simply provide us with your P&L Report, and we’ll automatically fill in all the necessary data to help you file your returns.
Receiving a Pension?
Include your pension details on the Income Sources Page. Don’t forget to add any other earned interest, if applicable.
Earning Interest?
Make sure to mention your interest income details on the income sources page.
Earning From Abroad?
Share your foreign income details under income sources, and we’ll guide you through the process of filing your returns.
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Income Tax Return Filing FAQ's
All the non-senior citizens mandatorily need to file their income tax returns online:
The Income Tax Department wants you to fill out the income tax return, which spills the beans on your income and taxes from April Fools’ to March Madness.
There are seven different forms to choose from, depending on how fat your wallet is, your source of income and the category to which you, as a taxpayer belong to.
Yes, TDS and filing a tax return are like two separate legal buddies that need your attention.
Paying income tax on your taxable income is a fundamental requirement, as dictated by the provisions of the Income Tax Act. However, alongside this obligation, there exists a distinct process known as filing a tax return. Consider it as a means to demonstrate compliance with tax regulations, ensuring that all applicable taxes have been duly paid.
The significance of the tax return document extends beyond mere compliance. Its value becomes evident when seeking financial assistance, such as securing a loan, or even when embarking upon international ventures like visa applications.
The government has rolled out seven different forms: ITR 1, 2, 3, 4, 5, 6, and 7.
- ITR-1 to ITR-4 are for individuals and HUFs. Depending on your income and where it’s coming from, you gotta pick the right form from this bunch.
- ITR-5 is specifically for partnership firms, LLPs, AOP, BoI, AJP, estates of deceased or insolvents, business trusts, and investment funds.
- ITR-6 is the go-to form for all the companies.
- However, if your company claims an exemption for income from property held for charitable or religious purposes, then it’s ITR-7 for you
And hey, if you’re e-filing with our awesome firm, we’ve got your back. We’ll automatically figure out the correct income tax return form for you. So, sit back, relax, and let us handle the tax form seamlessly!
The Income Tax Department provides a convenient option to pay directly through their website. Using either your net-banking account or debit card, you can utilize challan 280 for the payment. Here’s a breakdown of the payment types for different tax scenarios:
- For Advance Tax: Use payment type (100) Advance Tax.
- For Self-Assessment Tax: Opt for payment type (300) Self Assessment Tax.
- For Regular Assessment Tax: Select payment type (400) Tax on Regular Assessment Tax.
Not having a Form 16 doesn’t mean you’re out of luck. You can still file your tax return using an alternative method. Simply gather your payslips, as they contain important information about your salary, deductions, and taxes withheld. With this data in hand, you’ll be all set to proceed with filing your tax return.
Once you’ve e-filed your tax return and it’s pending e-verification, you’ll get a one-page ITR-V document. Now, you have two verification options: online or offline. If you go online, there are various methods available. But if you choose offline, here’s the drill: print, sign, and send that ITR-V to the Income Tax Department within 120 days of e-filing.
So, let’s get that ITR-V signed, sealed, and delivered!
Whether you file manually or electronically—you don’t need to attach any documents like investment proofs or TDS certificates.
But hang on to those documents, alright? You might need to show them to the tax authorities if they ask for them during assessments or inquiries. So, keep ’em safe and handy, just in case.
If your agricultural income is up to Rs 5,000, go ahead and file ITR 1. However, if your agricultural income exceeds Rs 5,000, you’ll need to file ITR 2.
If you’ve paid more tax than you owe, you can claim a refund by filing your Income-tax return. The excess amount will be refunded to your bank account through ECS transfer.
Just remember, it’s crucial to pre-validate your bank account details before filing your income tax return.
If you’ve experienced a financial loss during the year and want to carry it forward to offset future income, it’s important to file your return before the due date. You can only carry forward the loss if you’ve claimed it in your return by the due date.
Here’s a smart tip: Even if you’re not legally obligated to file a tax return, it’s still a good idea to do so. Why? Well, an income tax return serves as proof of your income for various purposes. It can help with loan approvals, visa applications, credit card applications, claiming tax refunds, and even offsetting and carrying forward losses. So, filing your ITR can benefit you in more ways than one!
If your total income in the previous year goes beyond the tax-exempt limit, you need to file your income tax returns (ITR) as per Section 139(1) of the Income Tax Act, 1961. This applies to:
- Individuals with salary income
- Individuals who changed jobs (with multiple Form 16s)
- Individuals with income from capital gains (mutual funds and stocks), business/profession, house property, and other sources like interest income
- Individuals with foreign income (on-site deputation), foreign assets, or who are NRIs.
Remember, filing ITR is essential for these situations to stay in line with tax regulations.
Definitely! You can turn to the – chartered accountants and dedicated agencies – to get the help you need.
They’ve got the know-how and expertise to navigate the ins and outs of ITR filing. So, why stress over it alone when you can have skilled hands guiding you through the process?
E-filing your income tax returns is a must if your income exceeds the basic exemption limit.
But wait, there’s more! Even if your income is below the limit, you still need to file ITR if any of the following conditions apply:
- Deposited over Rs 1 crore in all your current accounts
- Spent Rs 2 lakh or more on foreign travel
- Incurred electricity expenses of Rs 1 lakh or more
- Have interests or signing authority in foreign countries
- Business turnover exceeds Rs 60 lakh
- Professional receipts go beyond Rs 10 lakh
- Savings bank account deposits reach Rs 50 lakh or more
- Total TDS and TCS amount to Rs 25,000 or more (Rs 50,000 or more for senior citizens)
Tip: Even if you’re not legally obligated, it’s wise to file ITR. Why? Because it serves as proof of income for loans, visa applications, credit card approvals, tax refunds, and loss adjustment. So, don’t miss out on the benefits – file that ITR and keep your financial records in order!
Late filing of income tax returns can lead to penalties as per the Income Tax Act.
—According to Section 234F, if you file your ITR after the due dates, a maximum late fee of Rs 10,000 may apply.
However, there’s good news for small taxpayers!
If your total income doesn’t exceed Rs 5 lakh, the maximum penalty for late filing will be Rs 1,000.
Additionally, if you have outstanding tax liability, you’ll be subject to an interest penalty. —Under Section 234A of the Income Tax Act, you’ll need to pay a monthly interest of 1% on the outstanding tax payable until you file the belated ITR.
It’s important to stay on top of your tax obligations and file your returns on time to avoid these penalties and interest charges.
Let’s break it down. Here’s what you need to file your ITR:
- PAN and Aadhaar: These are the basic documents required for ITR filing.
- Form 16: It’s a TDS certificate issued by your employer, showing your salary, allowances, and deductions.
- Payslips: Keep your salary slips handy, as they contain important details such as salary, allowances, tax deductions, and more.
- Form 26AS: It provides tax-related information like TDS, advance tax, self-assessment tax, and TCS collected on your PAN.
- Annual Information Statement: This comprehensive statement includes various financial details like savings account interest, mutual fund transactions, rental income, and more.
- Form 16A/16B/16C: These forms provide details of TDS on interest, rental income, and other income liable for tax deduction.
- Interest certificates from banks or post offices: Collect these certificates to know the total interest earned from savings accounts, fixed deposits, recurring deposits, and post office savings accounts.
- House property details: Gather rental receipts, property ownership details, PAN of the house owner, and loan repayment certificates if applicable.
- Capital gains details: Keep sales deeds and capital gain statements from the broking house for any property or investment sales.
- Business Profit & Loss (PL) and Balance Sheet (BS): If you have a business, maintain the PL and BS documents to determine your business income.
- Other income details: Collect documents related to dividend income, family pension, loan interest, honorarium, tuition fees, freelancer income, and lottery winnings, if applicable.
- Investment proofs: Have documents related to EPF, PPF, ELSS investments, life insurance premiums, NPS contributions, education expenses, health insurance premiums, and educational loan interest.
- Additionally, if you qualify for deductions under sections 80D to 80U, ensure you have the necessary documents prepared for those deductions too!
Remember to keep these documents ready while filing your ITR to ensure accurate reporting and claim any eligible deductions.
Individuals/HUFs are required to file their income tax return if their total income exceeds the basic exemption limit, regardless of specified exemptions and deductions.
If an individual is a resident and ordinary resident of India, they must file their ITR even if their income doesn’t exceed the maximum exemption limit if any of the following conditions apply:
- They are the beneficial owner of assets located outside India.
- They have signing authority in any overseas account.
- They are a beneficiary of assets located outside India.
- They deposit more than Rs 1 crore in current accounts.
- They incur foreign travel expenses exceeding Rs 2 lakh.
- They have electricity bills exceeding Rs 1 lakh during the year.
For entities like companies, partnership firms, and local authorities, there is no basic exemption limit for filing ITR. They are required to file ITR for every financial year.
