A tax return is a form or forms filed with a tax authority that reports income, expenses, and other pertinent tax information. Tax returns allow taxpayers to calculate their tax liability, schedule tax payments, or request refunds for the overpayment of taxes. In most countries, tax returns must be filed annually for an individual or business with reportable income, including wages, interest, dividends, capital gains, or other profits.
Checklist for Income Tax Return Filing (ITR return)
For Filing income tax return, Section 139 (1) of the Income-tax Act 1961 specifies any individual whose total income during the previous year is more than the maximum amount not chargeable to tax should file their income tax returns online.
Let us make it clear:
Any individual earning more than ₹2.5 lakhs, ₹3 lakhs or ₹5 lakhs should file ITR.
The advantages of ITR Filing are:
Loans:
Bank loans like education loans, vehicle loans, personal loans, can be availed easily as they require the last three year's IT returns.
Visa:
As Immigration centres scrutinise many documents and IT returns, proofs are a mandatory document for visa applicants.
Avoid penalties:
Hefty amounts would be charged for non-filing of income tax returns and hence it is always better to file it to avoid legal repercussions.
Who Should File an Income Tax Return?
According to the Income Tax Department, the following entities are required to file yearly IT returns: