Overview of Income Tax Return Filing

Income tax return filing (ITR Filing) is a form used to file the details about the income and the tax that would be receivable by the Income Tax Department; based upon an individual's payment, the tax liability varies. As per the Income Tax Act, the income tax return must be filed by the individual or business every year based on the income or profit earned during that specific financial year. If the individual has paid excess tax, then the individual would receive an income tax refund from the tax department. Income tax filing is essential because if the individual or the taxpayer fails to find the income tax before the specified date, they will have to pay a penalty. As per the Income Tax Act, every citizen of India will be liable to pay tax on the income earned by every financial year.

Requirements of Income Tax Return Filing

For ITR Filing, certain documents are mandatory for everyone, even if the individual is not a taxpayer. Standard documents required to file in the financial year 2023 to 2024 are as follows:

1. PAN Card - A PAN Card is essential for filling out income tax returns. A PAN card is used to deduct the TDS, and therefore, it must be linked to the individual's bank account. The Income Tax Department issues the PAN Card. However, according to the most recent Amendment made by the government official notification, the Aadhar Card can also be used for ITR filing instead of a PAN card.


2. Aadhar card - As stated in the above section, Aadhar Card can also be used for filing the ITR according to section 139A of the Income Tax Act. The individual needs to provide the Aadhar card number for filing the return. If the Aadhar card is unavailable, it must be applied, and the enrolment ID is used instead of the Aadhar card number for the ITR Filing.


3. Form 16 - Form 16 contains the employee's salary and deduction details. The TDS form 16 consists of two parts, part A and part B. Part A is regarding the details of the tax deducted by the employer during the financial year, and part B consists of the TDS break up.


4. Form 16A, 16B, and 16C - 16A are regarding the TDS deduction for income apart from salary; Form 16B relates to the TDS deduction in case of property selling issued by the buyer. 16C reflects the amount deducted by the TDS @ 5% under the section of 194 IB by an individual or HUF.


5. Bank account - Disclosure regarding the bank account details has to be made. Bank account details include the account number, IFSC code, and the type of account; this is essential to check the income and the transaction details.


6. Bank statement and passbook - The Bank statement will show the transactions that have been made or the income earned from fixed deposits, which is essential for ITR Filing of a financial year.


7. Form 26AS and AIS/TIS - The annual tag statement includes all kinds of taxes deposited against the PAN; the TIS consists of the tax by the bank, the employer, and other organizations from which payment has been received. Now, it is vital to ensure that all the taxes deducted in the financial year are noted in the form 26AS. The AIS stands for Annual Information Statement, and the TIS stands for the Taxpayer Information Summary.


8. Tax saving instrument - - In case there are some tax saving instruments like fixed deposit, ELSS, or Investment receipt, then the relevant documents of the same should be present during ITR Filing.


9. Income disclosure - The income concerning the rent, foreign income, or dividend income must be disclosed during ITR Filing. The details of the dividend income can be taken from the demat account summary.

Characteristics of Income Tax Return Filing

There are several characteristics of Tax Return Filing, which are as follows:

• Enforced Contribution - Tax is an enforced contribution that the citizen of India makes to any government organization or individual to provide the best infrastructure and facilities used to fund public programs.


• Non-voluntary payment - Taxes are payable in the form of money and must be paid by the people as a non-voluntary payment.


• Proportional to Income - Tax is also a proportional payment made according to income or profit financial year


• Calculated according to Financial Year - The financial year applicable ITR filing is between the following year's 1st April to 31st March.


• Types of ITR - There are seven types of income tax returns: ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 and ITR 7.

Five primary characteristics are followed in taxation, which are transparency, simplicity, fairness, and easy administration.

Advantages Of Income Tax Return Filing

The advantages of an ITR filing are as follows:

• Loan approval - - It helps in easy loan approval as it helps show the borrower's income stability; therefore, borrowers must submit an ITR of 3 years for any kind of loan, such as a home loan, personal loan, car loan, etc.


• Visa - - It also helps in quick visa processing; individuals applying for access will be asked to submit the ITR so that the embassy can analyze their income and tax status.


• Income proof - It works as an income proof of the individual because it states the information regarding the annual income and the tax that has been paid based on the payment.


• Refund - If a higher tax amount has been paid due to tax liability and if, in verification by the tax department, it is noticed that the tax liability is indeed higher, then the excess amount will be deposited directly to the taxpayer's bank.


• Loss compensation - It helps to apply for payment in case there has been a loss in the business in a specific financial year. Then, the laws can be carried forward to the next year by filing the ITR, which will apply only if the ITR is filed before the due date.


• Medical insurance tax levy - It helps in medical insurance, which is mentioned in section 80D of the Income Tax Act, under which the tax limit eligible to claim action of Rs 25000 financial year premium paid towards the health insurance, in case the health insurance plan is for senior citizen then the deduction limits are higher.

Documents required for Income Tax Return Filing

The essential documents required for filing an ITR are stated as follows:

• Aadhar and PAN card - These two documents are essential during the ITR filing as per section 139AA of the Income Tax Act, which requires every citizen of India to use the Aadhar and PAN card during ITR Filing.


• Form 16 - Form 16 is an essential document for salaried individuals to file ITR; it is proof of the TDR certificate issued by the employer, which provides every detail on the TDS deduction from the salary.


• Salary slip - For the salaried taxpayer, a salary slip is an essential document required during the ITR Filing; it provides detailed information about the transport allowance, Rent allowance, and any other such allowance with a different kind of tax rate


• Bank / Post office interest certificate - The interest certificate issued by the bank or post office will be required during the ITR filing.


• Tax saving instrument - As per section 80C of the Income Tax Act, the tax saving instrument helps to lower the liability of tax, and for this part of income, there is no need to file ITRR. The maximum deduction that can be claimed under this section is rupees 1.5 Lakhs.


• Health Insurance receipt - Any Health Insurance Premium paid is eligible under 80D of the Income Tax Act. The maximum deduction that can be availed through this section is Rs 25,000 in case of a person below the age of 60 and 50,000 for a person above the age of 60.


• Capital gain - Capital gains received from a purchase or sale deed from a Mutual Fund.

Process of Income Tax Return Filing

The process of ITR Filing is as follows:

1. First, log into the official e-filing website and enter the PAN card details.


2. The second step is to file the income tax return by entering the income tax return tab. Now, your selection for filing must be made online.


3. Now, the status of the Income tax filing, whether it is made by an individual, HUF, or any others, must be selected


4. In the next step, the ITR type must be selected among the seven available ITR forms. The reason for filing the ITR must be stated from the options given.


5. In the next step, the bank account details and other required information such as the Aadhar, PAN, and Contact Details must be stated.


6. Now, the e-verification of the ITR has to be made using other OTP verification or by sending a physical copy of the ITR verification to CPC, Bangalore.

Why Adviso?

Income Tax Return Filing involves various requirements, document preparation, and pre- and post-compliance obligations. It is essential to comply with the specific terms of the ITR Filing. The ITR Filing can be a tedious process without professional support. That’s where Adviso comes in.

At Adviso, we provide expert services for Income Tax Return Filing on the official ITR website. Our Lawyers, CA, and CS experts guide you through every step of the journey to ensure your company lists smoothly and efficiently.

With Adviso's expertise and assistance, you can easily navigate the complexities of Income Tax Return Filing, saving time and ensuring compliance with all necessary regulations.