Income tax returns need to be filed on or before the specified due date for the year. The returns should include information about your income earned during the concerned year and the tax applicable. You can use an income tax calculator to find out your taxable income.
The Income Tax department has notified seven types of ITR whose applicability depends on the sources of income of the taxpayer, the amount of income earned, and the category of the taxpayer.
Who Needs to File ITR?
- Filing income tax returns is a must if your aggregate income is more than the basic exemption limit for the concerned financial year. Different exemption limits are applicable for people of different ages. For people below 60 years of age, the limit is Rs. 2.50 lakhs; and for the ones between 60-80 years of age, the limit is Rs. 3 lakhs; and for super senior citizens (above 80 years) there is no tax on income of up to Rs 5 lakh per year.
The calculations for these limits to ITR filing do not include the deductions available under Section 80C, 80CCD, 80D, 80G, 80TTA, 80TTB, and exemptions claimed in respect of long-term capital gains for reinvestment in residential house or capital gains bonds. These exemptions have to be added to your taxable income to determine the threshold limit for filing ITR. What is important is that even if you do not have a tax liability due to various rebates available under the Income Tax Act, you have to still file an ITR.
- Other people who need to file ITR irrespective of the level of their income include persons who are residents under the tax laws and have beneficial interests in any asset outside India or have signing authority in respect of any account outside India.
- Again, any person who has deposited more than one crore rupees in one or more current bank accounts in India has to file the ITR. The amount covers cash deposits as well as deposits in any other form.
- Anyone who has paid more than Rs 2,00,000 for foreign travel of anyone, including self, should file an ITR. Foreign travel does not include travel to neighbouring countries or travel for religious purposes.
- Anyone who has incurred an electricity cost of more than Rs 100,000 during a year has to file an ITR.
What to Include in the ITR?
The income tax return should include your income from all sources, such as salary income, income from rent, profit or loss from a business, profits or loss from the sale of shares and property, interest income on investments, expenses that can be claimed as deductions under various sections of Income Tax Act, and details of donations given to recognised trusts. The return should be filed after considering form 26AS,which is a statement providing details of tax deducted at source, the advance tax paid by you, and the refund received by you. The form can be downloaded from the Income Tax Traces portfolio.
Annual Information Statement or AIS
To ensure that you do not miss anydetails while filing your income tax return, the income tax department will get the details of all your transactions during a year from third parties. These include information related to your salary, transactions in shares, interest income earned by you on fixed deposits, dividend income, details of property sold or purchased by you, the rent income received by you,and the details of foreign remittances. All this information will be reflected in your Annual Information Statement and the same will be used to generate your pre-filled ITR. If you do not agree with the AIS, you can submit online feedback for the same. The use of AIS will save you from interest, penalties, and income tax litigations.
The difference between 26AS and AIS is that the former includes details concerning TDS, advance tax, and self-assessment tax, but the latter includes information related to your transactions in shares, mutual funds, dividend income, interest income, and purchase or sale of property as well.
You can check your AIS by logging into the Income Tax Portal and downloading it as a PDF. This document is password protected and can be unlocked by filling in your PANand date of birth details. This highly useful statement should be used to file your income tax returns on time.