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Income Tax Return (ITR) Filing – Detailed Overview

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1. What is Income Tax Return (ITR)?

• An Income Tax Return is a prescribed form through which a taxpayer declares:
  • Total income earned during a financial year
  • Applicable deductions and exemptions
  • Tax liability and payments (advance tax or TDS)
  • Refund claims, if any
• Filing is done under the provisions of the Income Tax Act, 1961 using forms notified by the Central Board of Direct Taxes (CBDT).

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2. Who is Required to File ITR?

As per Section 139(1) of the Income Tax Act, filing ITR is mandatory if:

For Individuals:

• Total gross income exceeds:
  • ₹2.5 lakh (below age 60)
  • ₹3.0 lakh (age 60–80)
  • ₹5.0 lakh (age 80+)

Regardless of income, ITR filing is also mandatory if:

• Deposited ₹1 crore or more in a bank account
• Incurred foreign travel expense of ₹2 lakh or more
• Paid electricity bill exceeding ₹1 lakh
• Held foreign assets or earned foreign income
• TDS deducted and refund is to be claimed
• Carry forward of losses is required (capital/business)
• Income is from business or profession under presumptive taxation

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3. Types of ITR Forms

ITR Form	Applicable To
ITR-1 (Sahaj)	Salaried individuals with income up to ₹50 lakh, one house property, and other sources
ITR-2	Individuals/HUFs with capital gains, more than one property, or foreign income
ITR-3	Individuals/HUFs with income from business/profession
ITR-4 (Sugam)	Presumptive taxation under Sec 44AD, 44ADA, 44AE (up to ₹2 crore/₹50 lakh turnover)
ITR-5	Firms, LLPs, AOP, BOI
ITR-6	Companies (other than those claiming exemption under Section 11)
ITR-7	Trusts, political parties, institutions filing under Section 139(4A–4D)

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4. Key Components of ITR

• Personal and PAN details
• Income from:
  • Salary
  • House Property
  • Capital Gains
  • Business or Profession
  • Other Sources
• Deductions under Chapter VI-A (Sections 80C to 80U)
• TDS and Advance Tax paid
• Bank account details for refund
• Tax computation summary

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5. Benefits of Filing ITR

Legal & Regulatory:

• Mandatory compliance under Income Tax Act
• Helps avoid penalties and legal action
• Proof of income for legal matters, including visa, tenders, and contracts

Financial:

• Essential for applying for loans, credit cards, and overdrafts
• Faster processing of refunds if excess TDS or advance tax paid
• Enables carry forward of losses (capital/business) for 8 years
• Useful to establish income source for high-value transactions

Long-Term Benefits:

• Builds clean tax history over years
• Reduces chances of scrutiny or tax notice
• Facilitates conversion from individual to business status in future
• Required for registration under GST, government licenses, startups, tenders, etc.

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6. Due Dates to file ITR

Category	Due Date
Individuals/Firms (non-audit)	31 July
Tax Audit Cases (Sec 44AB)	31 October
Companies required to file Transfer Pricing report (Sec 92E)	30 November

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7. Penalties for Non-Filing / Late Filing

• Late filing fee u/s 234F:
  • ₹5,000 if filed after due date (₹1,000 if income < ₹5 lakh)
• Interest u/s 234A: 1% per month on outstanding tax
• Loss of benefit: Cannot carry forward losses (if filed after due date)
• May trigger compliance notices and scrutiny

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8. ITR vs Non-ITR Situations

Situation	ITR Filing Required?
Salary income < ₹2.5 lakh	Not mandatory (unless TDS refund claim or loan application)
TDS deducted but income < limit	Recommended (to claim refund)
Agricultural income only	Not required, unless other income exceeds limits
Presumptive business income	ITR-4 filing mandatory even if no tax payable
Freelance/consulting income	Yes, ITR-3 or ITR-4 (presumptive)

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9. Common Deductions Available (Chapter VI-A)

Section	Deduction
80C	Investments (LIC, PPF, ELSS, etc.) – up to ₹1.5 lakh
80D	Health insurance premium
80TTA/80TTB	Savings account interest
80E	Education loan interest
80G	Donations
80CCD(1B)	NPS – additional ₹50,000
80U	Disability deduction

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10. Best Practices

• File ITR even if not mandatory (e.g., to build financial history)
• Link PAN with Aadhaar before filing
• Use Form 26AS and AIS/TIS to verify income and tax credits
• Disclose all income, including foreign assets, crypto, etc.
• Use correct ITR form based on income type

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11. List of Documents Required for ITR Filing

11.1. Basic Information

• PAN Card
• Aadhaar Card (linked with PAN)
• Address Proof (if changed)
• Email ID and Mobile Number (for OTP and updates)

11.2. Income Details

A. Salary Income

• Form 16 from employer (Part A & B)
• Salary slips (if no Form 16 or multiple employers)
• Details of allowances (HRA, LTA, etc.)
• Employment details: Employer PAN, TDS deducted

B. Business or Professional Income

• Profit & Loss Statement
• Balance Sheet
• GST Returns (if applicable)
• Bank Statements (all current/savings accounts used for business)
• Loan/OD statements
• Fixed Asset register (depreciation calculation)
• Books of accounts (cash book, purchase/sales register)
• Inventory valuation report (if applicable)

11.3. Bank & Interest Income

• Bank statements/passbooks for all bank accounts
• Interest certificates from all savings accounts
• Fixed Deposit interest certificates
• Recurring Deposit interest details
• Post Office MIS/Savings account interest
• Form 16A for TDS on interest

11.4. Capital Gains

• Demat account statements
• Stock/mutual fund transaction reports (Capital Gain Statement – CAMS/KARVY)
• Purchase & sale details of shares, mutual funds, ETFs, crypto, etc.
• Property purchase/sale documents:
  • Sale deed, purchase deed, registration documents
  • Cost of acquisition/improvement (including stamp duty, brokerage)
  • TDS (Form 26QB/16B) on property sale
• Capital Gain Statement (if property sold)
• Indexation benefit details for LTCG
• Crypto trading statements (buy/sell logs, wallet address if applicable)

11.5. House Property

• Home loan sanction letter and loan repayment certificate (principal & interest split)
• Property tax receipts
• Co-ownership agreement (if any)
• Rental income received (if let out)
• Rent agreement or tenant details
• Interest certificate from bank/NBFC (for deduction u/s 24b)

11.6. Other Income

• Income from freelancing/consulting
• Royalty or dividend income
• Lottery winnings/income from other sources
• Foreign income (salary, investment, interest)
• Foreign asset disclosure (Schedule FA)

11.7. Deductions & Exemptions (Chapter VI-A)

• LIC/PPF/NSC/ELSS investment proofs (Sec 80C)
• Health insurance premiums (Sec 80D)
• Education loan interest certificate (Sec 80E)
• Home loan principal repayment (Sec 80C)
• Donations (Sec 80G) with valid 80G receipts
• NPS contribution receipt (Sec 80CCD(1B))
• Medical expense proofs (80DDB/80U)
• Interest on savings account (Sec 80TTA/80TTB)
• Disability certificate (for 80U/80DD claims)

11.8. TDS and Advance Tax

• Form 26AS – Annual TDS summary
• AIS/TIS report – Income & tax summary from IT portal
• Form 16A – TDS on interest, rent, professional fees, etc.
• Form 16B – TDS on property sale (if you sold a property)
• Challans of Advance Tax / Self-Assessment Tax paid (if any)

11.9. Others (if applicable)

• Aadhaar-PAN link status
• Bank account details for refund (IFSC & account number)
• Passport details (for foreign income/NRI cases)
• Rental agreement (for HRA claims)
• Form 10E (for arrears relief u/s 89)
• Electricity bills or bills related to business use (for professionals)
• Tax audit report (if applicable)
• Digital Signature (DSC) if filing for companies or LLPs

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12. Fees & Time

Fees & time required for ITR filing depend on work and complications involved.

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⚠️ Disclaimer

The above information is provided for general awareness and informational purposes only. While we strive to keep the content accurate and up to date, we do not guarantee the completeness, accuracy, or reliability of any information provided herein. The content should not be construed as legal, tax, or professional advice. We recommend consulting with our customer service team for the most recent and applicable guidance. We shall not be held responsible for any loss or liability arising from the use of this information.