What is income tax return? Meaning, rules, benefits & more

The income tax law in India is framed by the Government. According to these laws, taxation imposed on a person depends upon his residential status. Qualified residents of India must pay taxes on their global income. Taxpayers are required to follow certain rules every financial year when filing their income tax returns. The best Chartered Accountant in India can help you in filing income tax returns with ease and confidence. 

tIn this blog, we will look at exactly what an income tax return is, eligibility criteria and benefits of filing ITR and more. Thus, without further delay, let’s begin.

What is income tax return?

Income tax return is referred to as a form wherein a person has to furnish all the details regarding their income and tax payable on income. 

Importance of of filing income tax return 

There are several reasons as to why a taxpayer must file an income tax return. Besides being a Government mandate process, the primary reason for filing ITR is to claim tax reductions. Filing your ITR on time allows you to avail yourself of financial facilities easily. So, whether you want to apply for a credit card or seek a personal loan, filing ITR can make the process seamless. 

Eligibility criteria for filing income tax return

While reading about income tax return, it is natural to have this question in your mind - Who should file an ITR? 

• Any person or registered companies that generate income, regardless of whether they have made profit or not during that financial year

• Any person who wish to claim a tax refund 

• Individuals who want to make investments

• Any person who wants to apply for a loan or visa

• Individuals who have asset located outside India

• Furthermore, all individuals whose total income based on their age exceeds the following set limit

Under the age of 59 - INR 2.5 lakh

Senior citizens aged 60 to 79 - INR 3 lakh

Citizen aged 80 and above - INR 5 lakh

Documents required to fill income tax return

When you are filing your income tax return online, you must have the relevant documents before starting your e-filing process. 

• Salary slips

• Bank and post office saving account passbook

• Aadhar card and PAN card

• TDS Certificate

• Interest Certificate

• Home loan statement from bank

• Tax saving investment proofs

• Form 26 A - It has information related to the taxes deposited against your bank

• Form 16, 16 A, 16 B, 16 C

Benefits of filing income tax return

There are various advantages of filing ITR. Some of the top ones are mentioned below:

• By filing ITR, an individual can claim tax refund from the IT department

• ITR receipt is important to process visa applications

• ITR receipt act as a supporting document for the processing of bank loans

• As we know it is mandatory for some companies or individuals to file ITR. Thus, timely filing of ITR will help one avoid penalties 

• Lastly, filing for ITR allows interest deduction while applying for home loan interest 

Due date for filing ITR

To claim the benefits of ITR, it is advisable to file ITR before the due date. Generally, the due date of filing ITR is 31st July for non-audit cases while 31st September for audit cases in a particular financial year. However, the income tax department can announce the due date extension for filing ITR. 

By going through this handy guide, one can easily understand the meaning of income tax return, eligibility criteria of filing ITR, benefits, and documents required to file ITR. What more? It will help you acknowledge the benefits of filing ITR and motivate you to apply for the same without any delay. 

Also, if you are seeking professional help to file your ITR on time, look no further than RBG Consultants. We have a team of the best Chartered Accountants in India who ensure that the e-filing process of ITR is carried out hassle free. We work closely with our valuable clients to get all the important information and documents needed to file ITR and also verify them. So, when you choose us, you can be assured of timely filing of ITR as our Chartered Accountants understand every aspect of ITR.

To know more about our services, get in touch with our team today!

What Changes Have Been Made In Budget 2022 Regarding Income Tax?

With the announcement of the new Union Budget for the year 2022, many changes have been made in various departments including the payment slabs of income tax return India. One of the highlights of the Union Budget was the changes made for digital assets such as cryptocurrencies and NFTs. The Finance Minister of India, Nirmala Sitharaman made the announcement of the changes that took place in the finance department along with income tax. There were no major changes made in this section but the few changes are mentioned below.

Here are some of the important changes made in the Union Budget regarding income tax : 

• Same Income Tax Slabs:

There were many changes as compared to the previous budgets in this year’s Union Budget. But the one thing that didn’t change is the tax rates and the slabs for the income tax. Just like before, the same tax rates will be applied to various people with varying incomes per annum. That is the people earning Rs. 2,50,000 per annum will pay 5% income tax, whereas the people above 15,00,000 will give 30% income tax along with additional charges. Thus, there was no major change in the income tax return India department.

• In Case Of Delayed ITR Filing:

In case a person fails to do the ITR Filing in India of their income tax returns, then they can file it 3 months before the assessment year. This will be termed as a belated return or a revised return as per ITR. The assessment year for 2022-2023 will be before 31st December 2023. 

• Tax For Transfer Of An Immovable Property:

In case of the transfer of immovable property, except agricultural land, at the rate of 1 per cent of the sum paid to the resident or stamp duty value, TDS (Tax Deducted at Source) will be deducted. If the sum credited or the stamp duty value is less than fifty lakhs, then no tax will be deducted.

• No Wealth Tax Or Inheritance Tax:

There have not been any prospects or proposals for the application of any kind of tax rates for wealth tax or the inheritance tax in India. Thus, the step which could have made a huge step in reducing the difference between the rich and poor and inequality of income is still delayed with no prospect of happening in the future.

• Tax Deduction For Government Employees:

With the announcement of no major changes in the tax rates for the income tax returns, the Finance Minister also informed that the TDS, i.e. the Tax Deduction rates for both central as well as state government employees will increase from 10% to 14%. This move was taken into consideration to make the social security benefits of both states as well as central government employees at par with each other.

These are the changes made in the Union Budget of the year 2022 in the case of the income tax return in India.