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Income Tax Return
What are Income Tax Return?
Income Tax Return (ITR) is a form which a person is supposed to submit to the Income Tax Department of India. It contains information about the person’s income and the taxes to be paid on it during the year. Information filed in ITR should pertain to a particular financial year, i.e. starting on 1st April and ending on 31st March of the next year.
Income can be of various forms such as :
- Income from salary
- Profits and gains from business and profession
- Income from house property
- Income from capital gains
- Income from other sources such as dividend, interest on deposits, royalty income, winning on lottery, etc.
The Income Tax Department has prescribed 7 types of ITR forms – ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, ITR-7 and applicability of the form will depend on the nature and amount of income and the type of taxpayer.
Below is the list of ITR forms which are most commonly applicable:
Who should file Income Tax Returns?
According to the Income Tax Act, income tax has to be paid only by individuals or businesses who fall within certain income brackets. Mentioned below are entities or businesses that are required to compulsorily file their ITRs in India:
- All individuals, up to the age of 59, whose total income for a financial year exceeds Rs 2.5 lakh. For senior citizens (aged 60-79), the limit increases to Rs. 3 lakh and for super senior citizens (aged 80 and above) the limit is Rs. 5 lakhs. It is important to note that the income amount should be calculated before factoring in the deductions allowed under Sections 80C to 80U and other exemptions under section 10.
- All registered companies that generate income, regardless of whether they’ve made any profit or not through the year.
- Those who wish to claim a refund on the excess tax deducted/income tax they’ve paid.
- Individuals who have assets or financial interest entities that are located outside India.
- Foreign companies that enjoy treaty benefits on transactions made in India.
- NRIs who earn or accrue more than Rs. 2.5 lakh in India in a single financial year.
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