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Is Income Tax Return Filing Difficult in India?

Income Tax Return is when a person is supposed to submit to the IT Department of our nation. It withholds the information of income of person and the taxes that are to be paid during the year. The essential thing you need to keep in mind is; the information filed in income tax return should and always pertain to a particular financial year, and that is, start from the 1st of April and ends on the 31st of March the next year.

As you know, income can be of five types:

  1. The income from a salary.
  2. The profits and gains that were earned from a business or profession.
  3. The income from house property.
  4. The income from capital gains.
  5. The income is earned from other sources such as dividends, interest on deposits, royalty income, and more.

Is ITR Filing Difficult in India?

On the basis of various types of incomes, every individual is prescribed to file a different ITR by the Income Tax Department. As per the Income Tax Department of India, there are seven types of ITR forms, known as ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, ITR-7, and they are applied according to the nature and amount of taxpayer’s income type.

What are the Types of ITR Forms?

  1. ITR – 1: This form is filed when an individual has a total income up to INR 50 lacs through salary, one house property, another source that excludes lotteries, and agricultural income up to INR 5000.
  2. ITR – 2: This kind of form is filed by individuals & Hindu Undivided Familys who are usually not eligible to file the ITR 1 form and have income and profits from a profession or business.
  3. ITR – 3: This form is filed by persons who have their income from business or profession.
  4. ITR – 4: This form is filed when the individual, HUFs, or firm are residents having a total income up to INR 50 lacs and having income from business or profession computed u/s 44AD, 44ADA, or 44AE .

Is it Really Hard to File for ITR?

If you are thinking about filing for an income tax return could be a tough task to be finished then it is not really. In some cases income tax return filling is not necessary at all, and the job comes in when you need to know whether you should file for ITR or not.

These are some cases when one should file for income tax return

  1. When a person holds a beneficial owner or otherwise any asset that is located outside of India.
  2. When a person has signed authority in any account that is located outside of India.
  3. When you are a beneficiary of any asset which is located outside of India.
  4. When an individual deposits more INR 1 crore in the bank account.
  5. When there is a foreign travel expense which is more than INR 2 lacs.
  6. When electricity consumption of a household is more than INR 1 lac.

How Does One File ITR?

Here are certain steps that can get you to file your income tax return online:-

  1. In our first step visit the Income tax official website.
  2. Register on the portal and sign in with your ID.
  3. Click on the option ‘Taxpayer’ and enter your PAN.
  4. After the credential validation, the portal ask your details such as name, address, etc.
  5. Enter your email id & your phone number.
  6. Verify your details with an OTP sent to your registered mobile number.
  7. Enter the OTP.
  8. Set up your password and your login.
  9. Click on register, after which you will receive an acknowledgement message and file for return by clicking on the ‘return’ option.

Is it Important to File ITR?

Filing income tax returns is a yearly activity that is seen as a moral and social duty of every responsible citizen of the country. It is the only mode for the government to know the amount and means of expenditure of the citizens and provides a platform for the assessee to claim for a refund, among other forms of relief frequently. Why it is essential for you to File Income Tax returns, here is why:

  • Filing for income tax returns is a sign that proves you to be responsible.
  • It is essential in some cases.
  • Your loan and Credit Card Company can ask for ITR in some cases.
  • It is also needed when you want to claim adjustment against past losses.
  • In case of revised return it will also come in handy and prove to be useful.

Conclusion

If you are filling you income tax then all you need to know is if it is mandatory for you, which ITR you should be filing, and the part the returns would play in your finances.