ITR Made Simple: A Step-by-Step Guide to Filing Your Income Tax Return

1. Introduction

Income Tax Return (ITR) is an essential aspect of every taxpayer’s financial life. Whether you are an individual, a business owner, or a professional, understanding and filing your ITR correctly is crucial for compliance with tax laws and to avoid potential penalties. In this blog, we will delve into the world of ITR, explaining what it is, why it matters, and how you can navigate the process smoothly.

2. What is Income Tax Return (ITR)?

An income Tax Return (ITR) is a document that individuals and entities file with the tax authorities to report their income earned during a financial year and to calculate the taxes they owe to the government. It is a formal acknowledgment of your earnings, deductions, and taxes paid. The tax return must be filed annually and is a means for taxpayers to fulfill their civic responsibility.

3. Why is filing ITR important?

Filing your ITR is not just a legal requirement but also offers several advantages:

Compliance: Filing ITR is mandatory for those whose income exceeds the threshold limit prescribed by the tax authorities. There may be fines and legal repercussions for non-compliance.

Refunds: If you have paid more tax than your actual liability, filing allows you to claim a tax refund from the government.

Financial Documentation: ITR serves as an official record of your income and tax payments. It comes in handy when applying for loans, visas, or other financial activities.

Visa Applications: Many countries require as proof of financial stability when applying for a visa or residency.

Carry Forward Losses: If you have incurred losses in a financial year, filing enables you to carry forward these losses to offset future profits.

4. Types of Income Tax Return Forms

The tax authorities have designed different forms based on the sources of income and the taxpayer’s category. The commonly used forms include:

1. ITR-1 (SAHAJ): For individuals with income from salary, house property, and other sources up to a specified limit.
2. ITR-2: For individuals and Hindu Undivided Families (HUFs) having income from all sources, except for business or profession.
3. ITR-3: For people and HUFs who make money through their own businesses or professions.
4. ITR-4 (SUGAM): For individuals, HUFs, and firms (other than LLP) with presumptive income from business or profession.
5. ITR-5: For partnership firms, LLPs, Association of Persons (AOPs), and Body of Individuals (BOIs).
6. ITR-6: For businesses that do not seek to be excluded from paying taxes under Section 11 (Income from Property Held for Charitable or Religious Purposes)
7. ITR-7: Persons, including companies, must furnish returns under Sections 139(4A), 139(4B), 139(4C), or 139(4D) of the Income Tax Act.

5. ITR login registration requirements

• Valid PAN
• Valid Aadhaar
• Next, a Valid mobile number
• Aadhar and PAN are connected to the registered mobile number
• Valid current address
• Valid email address

6. TR login: Registration

You must register on the portal before you can begin the income tax e-filing login process. This section outlines the procedure.

• Step 1: Click the Register Yourself button on the e-filing page.
• Step 2: Enter and authenticate your PAN. An error message will appear if your PAN is not registered on the e-filing portal.
• Next, Step 3: Enter all the information and press Continue.
• Step 4: Enter the required contact information and press “Continue.”
• Step 5: Your email address and mobile number will both receive two six-digit OTPs. Enter them in the corresponding fields.
• After, Step 6: Thoroughly review every detail and make any necessary modifications. ‘Confirm’ should be clicked if all the information is accurate.
• Choose a password in step 7. Keep the following things in mind while you set it:

I) It should contain a minimum of 8 and a maximum of 14 characters.

II) It must include a number and at least one uppercase and one lowercase letter.

iii) It should have a number

iv) It should have a special character.

• Step 8: Your login account is now active on the income tax e-filing website. ‘Proceed to Login’ should be clicked.

7. ITR login: Step-wise process

• Step 1: Open the income tax e-filing website and select the ‘Login’ link.
• Enter your PAN number, Aadhaar number, or user ID in Step 2.
• Step 3: The ‘Continue’ button would turn on once you entered one of the details.
• Step 4: Type your password and press the “Continue” button.
• Next, Step 5: To verify your identity using the registered mobile phone, you can choose to send a text message or make a voice call.
• Step 6: Enter the verification code, then press “Login.”
• Your login was successful in step seven.

8. ITR filing last date for FY 2023-24

ITR filings must be submitted by July 31, 2023. Experts predict that the government won’t permit any more delays after the deadline.

9. Penalties for filing income tax returns late

Failing to file by the deadline, as required under Section 139 of the I-T law, may subject the individual to interest charges on the unpaid tax. If the ITR is filed after the deadline, the taxpayer is liable to pay a late filing fee of Rs 5,000. The I-T department has the option of adding a 50% penalty to the tax due. One may receive a sentence of up to three years in prison for major offenses.

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