A statement which a taxpayer presents to the income-tax department in a prescribed form every year is called Income Tax Return. It’s a collective statement of income and tax.
Need to file Income Tax Return
As per Income Tax Act 1961, It’s a responsibility of every citizen of India to file an Income Tax Return. Also, in the last few years, our government has made it mandatory for everyone.
Taxpayers who file a mandatory Income Tax Return
1- Any public, private, foreign, domestic company.
2- Any LLP and unlimited liability partnership.
3- Any person whose total income(gross) is more than the limit of exemption.
Merits of filing Income Tax Return
1- To meet legal requirements every citizen of India (including NRIs) with a total income of over 2.5 lakhs, need to file an income tax return.
2- Easy loan approval.
3- Claiming tax refund..
4- Credit card processing.
5- Carry forward your losses.
6- Avoid penalty (upto 5000 Rs).
7- Quick visa application process.
8- Life becomes easy for professionals and freelancers.
9- To buy an insurance policy with a higher cover.
Demerits of a Non-Filing Income Tax Return
1- The assessing officer may use his power to waive of the penalty of Rs 5000 in case if you haven’t filed an income tax return.
2- Loss in interest on return.
3- Losses cannot be carried forward.
4- No claim on deductions under Chapter – VI-A.
5- Penalty for hiding income.
6- Best Judgement Assessment under section 144.
1- Documentation Process
2- Income Computation
3- Tax Due Calculation
4- Tax Paid
4- Preparation of Return
4- Return Submission
Requisites for Income Tax Returns
1- PAN card copy.
2- Aadhaar card copy.
3- Bank Accounts details (including IFSC code).
4- Form 16 (if available).
5- Form 16 A (if available).
6- Passport Number.
7- Investments details.
8- Statement related to the home loan (if taken).
9- Salary slips.
10- Tax-saving proofs.