What is the full form of ITR

ITR: Income Tax Return

ITR stands for Income Tax Return. It is an online/offline form submitted by a citizen to the Income Tax Department of India. The paper holds details regarding the income of the particular citizen and the tax required to be paid in that corresponding financial year. The information provided in the Income Tax Return should be of the specific financial year, i.e. starting from 1st April of the current running year to 31st March of the upcoming year.

The central government formulates the Indian Income Tax Laws. The government had put out the tax on the income of all the citizens who are the individuals, local authority, association of persons, companies, the body of individuals, firms, Hindu Undivided Families (HUFs), LLP and any other artificial juridical person. The laws state that the tax levied through a person relies on his residence status, and tax on their global income is to be paid by a person satisfied as a resident of India. Some specific rules and regulations must be looked after every financial year by taxpayers while filing their Income Tax Returns (ITR). And the accountability of a taxpayer is calculated upon their income. The income tax laws bind every individual and business earning any income to file the income tax return each year. This task of filing a return must be filed before the last specified date. The penalty is charged post due date filing.

Is it mandatory to file Income Tax Return?

Those whose income exceeds the basic exemption limit will have to pay tax as per Indian tax laws and file their returns accordingly. The rate of Income tax in India is decided by the Central and State Governments along with local authorities like municipal corporations. It is also said that a delay in filing the Income Tax Return will affect the chances of getting a loan or a foreign visa. Those whose incomes don't exceed the basic exemption limit may file 'nil returns', which inform Income Tax Department that the taxpayers are not liable for taxable income for a specific financial year.

Who should file Income Tax Returns?

As laid down in the Income Tax Act, individuals or businesses lying between specific income brackets are only supposed to pay the Income tax. The following conditions are required to satisfy the compulsion to file ITRs:

1. An individual up to 59 years of age, having a total income of more than ₹ 2.5 Lakh for a financial year.
2. Senior citizens (aged 60-79) with a total income of over ₹ 3 Lakh for a financial year.
3. The super senior citizens (aged 80 and above) with a total income of over ₹ 5 lakhs for a financial year.
4. Regardless of the profit, all the registered companies generating income must pay the tax.
5. Individuals who possess financial interest entities and assets abroad.
6. Foreign establishments that benefit from treaties and transactions made in India.
7. NRIs, who earn more than ₹ 2.5 lakh in a single financial year.

The income should be calculated before reducing the amount of deductions permitted under Section 80C and 80U and another type of exemption under section 10. Individuals or groups whose additional tax has been deducted can ask for a refund on the income tax paid by them.

The various sources of income are such as:

1. Gained from salary
2. Received through profits in business and profession
3. Received through selling house or property
4. Received through capital gains
5. Gained from dividends, interests on deposits, royalty earnings and winning through a lottery, etc.

What for Whom

It is advisable for all citizens of India to file ITR through online/offline mode. There are various forms of ITR which are filled by the people as per the defined conditions, such as:

1. The residing individuals with a total income of about ₹ 50 lacs through: salary, one house property, pay up to ₹ 5,000 from agriculture, and others except for lotteries and horse races are eligible to file ITR-1, which is also known as Sahaj.
2. Individuals and the HUFs who are ineligible to file the ITR-1 and do not possess income through business and/or profession, profits and gains, are eligible to file ITR-2.
3. The individuals and HUFs receiving income from profits and gains from business and/or profession must file ITR-3.
4. The residing individuals, HUFs and firms (except the LLP) who possess total income up to ₹ 50 lacs and from business and/or profession listed under section 44AD, 44ADA or 44AE are eligible for ITR-4, also known as Sugam.

Due dates for filing the Income Tax Returns:

1. 31st July is the due date to file tax for individuals (other than the company) who are not covered under tax audits.
2. 30th September is the due date for persons covered under tax audits.
3. 30th November is the last date of filing an Income Tax Return for the person who underwent international transactions and is bound to report under 92E.