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Income Tax Returns – Income Tax Act 1961

Income Tax Returns – Income tax Act 1961. In this article, we are going to provide information about Income Tax Returns – Income tax Act 1961. This article contains details about what is the Income Tax Returns , filling of Income Tax Returns, Income Tax Returns explanation forms, is it necessary to Income Tax Returns etc. after reading this article, you can get a clear idea about Income Tax Returns concept.

Income Tax Returns – Income Tax Act 1961

Tax is a central element to the revenue generation system of the Indian government. Among the multitude of taxes present in the system, income tax is the one that deals with the taxation of the earning of every individual, firm or organisation in a financial year. The earning or income could be in the form of regular wages, interest, dividends, capital gains or any other profits.

Return of Income – Meaning

A return of income is a defined form which can list out the particulars of income and the taxes paid on the same by an individual, firm or organisation in a financial year. This in turn can be presented to the Income Tax Department. There are differing forms for incomes of different status and nature and they are readily available on the online portal of the Income Tax Department of India.

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There are currently nine different forms available for filing of income tax returns. They go from ITR-1 to ITR-7 and also include the ITR-4S and ITR-V.

Is it Necessary to Filing an Income Tax Return

Currently (as of 2015), is mandatory for one to file income tax returns in India if the following conditions are applicable –

  • If the gross total annual income (before deductions under 80C to 80U) is Rs. 2,50,000 (for ages less than 60 years), Rs. 3,00,000 (for ages 60 years but less than 80 years) and Rs. 5,00,000 (for ages 80 years and above)
  • If it’s a company or firm, irrespective of the profit or loss made in a financial year
  • If a tax refund needs to be claimed
  • If a loss under a head of income needs to be carried forward
  • If being a resident of India, one has an asset or financial interest in any entity located outside India
  • If being a resident of India, one is a signing authority in a foreign account
  • If one receives income derived from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust
  • If one is applying for a loan or a visa

If an NRI derives any or all of his/her income through sources in India, that income is liable to be taxable in India, and income tax returns for the same will be necessary.

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With the implementation of e-filing of Income Tax Returns, the following cases will require an e-filing of Income Tax:

  • In case a refund is required
  • In case the gross total annual income exceeds Rs. 5,00,000
  • In case an income tax refund is required
  • ITR-3, 4,5,6,7 have to be mandatorily e-filed

Income Tax Returns – Explanation on the Forms

The various forms that are available for the purpose of income tax returns have the following functionality –

Form Name Brief
ITR-1 Otherwise known as SAHAJ, deals with income of an individual with salary or pension or income from one house property or other sources (not including lotteries or race horses)
ITR-2 Applicable for individuals or Hindu Undivided Families having any income other than ‘Profits and gains of business or profession’
ITR-3 Applicable for individuals or Hindu Undivided Families having income sources from ‘Profits and gains of business or profession’
ITR-4S Known as SUGAM, it is applicable to individuals and HUFs opting for presumptive taxation scheme under Section 44AD/44AE
ITR-4 Applicable for an individual or a HUF carrying out a proprietary business or profession
ITR-5 For entities being a firm, LLP, AOP, BOI, artificial juridical person, co-operative society and local authority. This, however, does not include trusts, political parties, institutions, colleges or entities who are required to file the return of income under Section 139(4A), 139 (4B), 139(4C) or 139(4B)
ITR-6 Applicable to companies other than the ones which claim a deduction under section 11
ITR-7 Applicable to all entities who should furnish a return of income under Section 139(4A), 139 (4B), 139(4C) or 139(4B)
ITR-V The acknowledgement form of filing a return of income

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