Income Tax Return (ITR) Filing
Professional ITR Filing Services for Individuals and Businesses
Overview of Income Tax Return (ITR)
An Income Tax Return (ITR) is a mandatory annual declaration filed by individuals and businesses with the Income Tax Department of India. It details all income earned from various sources (like salary, business, property, capital gains, and other sources) during a specific financial year.
By submitting an ITR, taxpayers comply with legal requirements, establish proof of income for financial dealings, and facilitate the accurate assessment of their tax obligations to the government.
What is Income Tax Return (ITR) Filing?
Income Tax Return (ITR) filing is the annual process where individuals and entities report their earnings and claim deductions to the Income Tax Department of India. This declaration involves submitting a specific ITR form that details all income sources (like salary, business profits, or capital gains) and claims eligible tax-saving deductions, such as Section 80C for life insurance premiums, PPF, and EPF contributions, and Section 80D for health insurance premiums.
The ITR form that a taxpayer needs to file depends on the nature and complexity of their income. There are different forms (ITR-1, ITR-2, ITR-3, etc.), each tailored for specific types of income and taxpayers.
Why is Filing Your Income Tax Return Important?
Filing your income tax return offers significant benefits that go beyond just legal compliance. It helps you to:
Avoid Penalties
Failing to file or late filing can lead to significant penalties.
Claim Refunds
If you've paid excess tax (TDS), filing allows you to claim your income tax refund.
Carry Forward Losses
Business losses can be carried forward to offset future income, reducing tax liability.
Loan and Visa Applications
ITR acknowledgments are often required for loan applications, visa processing, and other financial transactions.
Proof of Income
It serves as a legitimate proof of your income for various purposes.
Assessment Year vs. Financial Year: Key Difference
In Income Tax Return (ITR) filing, understanding the distinction between the Financial Year (FY) and the Assessment Year (AY) is fundamental. While often confused, they represent different periods for income earning and tax assessment.
| Feature | Financial Year (FY) | Assessment Year (AY) |
|---|---|---|
| Definition | The year in which you earn your income. | The year in which the income earned in the Financial Year is assessed and taxed. |
| Period | Always starts on April 1st and ends on March 31st of the following calendar year. | Always starts on April 1st and ends on March 31st of the year succeeding the Financial Year. |
| Purpose | Period for income generation, expenses incurred, and financial transactions. | Period for filing Income Tax Returns (ITR), calculating tax liability, and paying taxes on the income earned in the preceding FY. |
| Examples | FY 2024-25: April 1, 2024, to March 31, 2025 (Income earned during this period). | AY 2025-26: April 1, 2025, to March 31, 2026 (ITR filed for income earned in FY 2024-25). |
| Relation | The Assessment Year is always the year immediately following the Financial Year. | The Financial Year is always the year immediately preceding the Assessment Year. |
Latest Income Tax Slabs and Rates
Understanding the applicable tax slabs is crucial for accurate income tax return filing. India offers two tax regimes:
New Tax Regime (FY 2024-25)
The New Tax Regime (default from FY 2023-24) offers lower tax rates but fewer deductions and exemptions.
| Income Slabs (Rs.) | Income Tax Rate (%) |
|---|---|
| 0 - 3,00,000 | 0 |
| 3,00,001 - 7,00,000 | 5 |
| 7,00,001 - 10,00,000 | 10 |
| 10,00,001 - 12,00,000 | 15 |
| 12,00,001 - 15,00,000 | 20 |
| Above 15,00,000 | 30 |
Budget 2025 Update: The zero-tax limit has been raised to Rs. 12 lakh, and salaried taxpayers can benefit from an additional standard deduction of Rs. 75,000, making incomes up to Rs. 12.75 lakh effectively tax-free.
Old Tax Regime
The Old Tax Regime allows taxpayers to claim various deductions and exemptions (e.g., 80C, HRA, LTA).
For Individuals below 60 years and HUF:
| Income Slabs (Rs.) | Income Tax Rate (%) |
|---|---|
| 0 - 2,50,000 | 0 |
| 2,50,001 - 5,00,000 | 5 |
| 5,00,001 - 10,00,000 | 20 |
| Above 10,00,000 | 30 |
For Senior Citizens (60 to 80 years):
| Income Slabs (Rs.) | Income Tax Rate (%) |
|---|---|
| 0 - 3,00,000 | 0 |
| 3,00,001 - 5,00,000 | 5 |
| 5,00,001 - 10,00,000 | 20 |
| Above 10,00,000 | 30 |
For Super Senior Citizens (80+ years):
| Income Slabs (Rs.) | Income Tax Rate (%) |
|---|---|
| 0 - 5,00,000 | 0 |
| 5,00,001 - 10,00,000 | 20 |
| Above 10,00,000 | 30 |
Which Tax Regime Should You Choose?
The choice between the old and new tax regimes depends largely on the deductions and exemptions you plan to claim. If you have significant tax-saving investments and expenses, the old regime might be more beneficial. If you prefer simplicity and fewer deductions, the new regime could be better.
Expert Advice: Connect with experts and make an informed decision for your income tax return filing. Taxpayers must carefully evaluate both regimes based on their specific financial situation before filing their ITR.
Who Needs to e-File an ITR?
Generally, any individual or entity whose gross total income exceeds the basic exemption limit is required to file an ITR. This includes:
• Salaried individuals
• Self-employed professionals and freelancers
• Businesses (companies, firms, LLPs)
• Individuals with income from house property
• Income from capital gains
• Income from other sources
Different Income Tax Return Forms in India
Selecting the right ITR form is a critical step in how to file an income tax return. Choosing an incorrect form can lead to your return being treated as defective.
| Form Name | Applicable To | Types of Income Covered |
|---|---|---|
| ITR-1 (SAHAJ) | Salaried Individuals, Pensioners (Income ≤ Rs. 50 lakh) | Salary, Pension, One house property, Other sources |
| ITR-2 | Individuals and HUFs without business income | Salary, Multiple house properties, Capital gains, Foreign assets |
| ITR-3 | Individuals and HUFs with business income | Proprietorship, Professional income, Partnership, All income types |
| ITR-4 (SUGAM) | Small Businesses under Presumptive Taxation | Section 44AD, 44ADA, 44AE (presumptive schemes) |
| ITR-5 | Firms, LLPs, AOPs, BOIs, Co-operative Societies | All business and other income |
| ITR-6 | Companies (excluding Section 11) | Corporate income |
| ITR-7 | Trusts, Political Parties, Institutions | Charitable trusts, Political parties, Research institutions |
Documents Required for Income Tax Return E-Filing
Having these documents ready will significantly speed up your income tax return filing process:
PAN Card and Aadhaar Card
Your PAN card is a unique tax ID, essential for all financial transactions and e-filing of income tax returns. Your Aadhaar card is now mandatory to link with PAN for tax filing, ensuring streamlined verification.
Form 16 from Your Employer
For salaried individuals, Form 16 is crucial for income tax return filing. Issued by your employer, it details TDS (Tax Deducted at Source) from your salary and provides a breakup of salary components and declared deductions.
Bank Statements and Interest Certificates
These are vital for accurate income tax return filing. They help report all interest income from savings accounts, FDs, and RDs, and assist in identifying high-value transactions and reconciling tax refunds.
Proof of Investments for Deductions (80C, 80D, etc.)
To claim tax deductions, you need proof of investments and expenditures. For Section 80C, gather receipts for PPF, ELSS, life insurance, home loan principal, and children's tuition fees. For Section 80D, keep health insurance premium receipts.
Form 26AS - Annual Tax Statement
Form 26AS is an indispensable annual tax statement for income tax return filing. It shows all TDS/TCS, advance tax, self-assessment tax paid, and refunds received linked to your PAN. It's now complemented by the Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) for a comprehensive financial view.
Request Consultation
Fill out the form below and our experts will get back to you within 24 hours.