What is ITR?

ITR depicts Income Tax Return. All the ITR forms and procedures to be followed are governed by The Income Tax Act, 1961. This text provides an in-depth understanding of the ITR definition and kinds of ITR forms from the view of a Tax Consultant in Chennai.

Income Tax return (ITR) could be a form in which the taxpayers file data regarding their financial gain obtained and tax applicable to the tax department. The department has notified seven different forms i.e. ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 & ITR 7 until now.

Income tax filing may seem complicated and tedious. Once you understand all the sources and deductions it becomes easier. Here we have given detailed information on the process of income tax filing in Chennai

Who has got to file ITR?

Income tax filing in Chennai is mandatory if any of the conditions mentioned below apply to you:

1. If you’re gross total financial gain is over the essential exemption limit as specified below-

  • For individuals below sixty years – Rs 2.5 Lakhs
  • For individuals sixty years and higher than however below eighty years – Rs 3 Lakh
  • For individuals eighty years and above – Rs 5.0 Lakhs
  • (The higher than limits are just for a resident individual. For a non-resident- BEL is two.5 Lakhs)

2. If you’ve got over one supply of financial gain like house property, capital gains, etc.

3. If you wish to assert a tax refund from the department.

4. If you’ve obtained from or have invested in foreign assets throughout the financial year.

5. If you want to use it for a visa or a loan

6. You wish to hold forward a loss underneath ahead of financial gain

7. If the remunerator could be a company or a firm, regardless of profit or loss.

Penalties for Late filing of tax return

1. As per Section 234F,

  • If you fail to file your returns on time, you have got to pay a penalty of up to Rs 10,000.
  • If the tax returns are filed at the return filing date however before December 31, the penalty would be Rs 5,000.
  • If the returns are filed on or January 1, the penalty goes up to Rs 10,000.

However, if the taxpayer’s total financial gain is a smaller amount than Rs 5,00,000, the penalty is a maximum of Rs 1,000, a move meant to produce relief to the small remunerator.

2. If you are late in filing Income Tax, you can’t transfer your losses (except loss from house property) from ‘Capital Gains’ or the ‘Profits and Gains of Business/ Profession’.

3. If you’re late in doing Income Tax Filing, you furthermore might have to be compelled to pay interest on unpaid tax.

4. Further, if you’re eligible for a refund and interest on your refund, you will not be receiving any interest on the refundable quantity if you do not file your tax returns on time.

Different types of ITR forms

In total, there are seven kinds of ITR forms offered for a remunerator to file his taxes. However, solely the subsequent forms are to be taken into thought by people once filing returns as per the Central Board of Direct Taxes in India:

ITR-1

ITR-2

ITR-3

ITR-4

The following tax return forms are applicable just for firms and firms:

ITR-5

ITR-6

ITR-7

ITR-1:

ITR-1 or Sahaj are often used by the below class of resident Indians.

  • Salary/pension financial gain
  • Income obtained from alternative sources excluding – lottery, horse race, etc
  • Payment received for one house property with bound exclusions.
  • Income from alternative sources (including winnings from lottery and financial gain from horse races)
  • The agricultural financial gain of but Rs 5000.

There are limitations to who can and can’t take this form. For instance, people with financial gain from foreign assets cannot file ITR 1 Form.

ITR-2 :

Individuals and HUF with the below criteria can file ITR 2 Form –

  • Every financial gain from ITR 1 > 50 Lakhs
  • Capital gains
  • More than one house property
  • Foreign Income/ Foreign plus
  • The agricultural financial gain of over Rs 5000
  • Holding a place in a very Company
  • Investments in unlisted equity shares
  • Being a resident not commonly resident (RNOR) and non-resident

Clubbing– more, in a case where another person’s financial gain, like one’s partner, child, etc., is to be clubbed with the financial gain of the assessee, this Return Form is often used wherever such financial gain falls in any of the higher classes, says Phoenix Tax- Tax Consultant in Chennai.

ITR-3

Individuals or HUF with financial gain from the below sources will file ITR 3:

  • Every financial gain form ITR-2
  • A business or profession
  • If you’re a private director in a company
  • Income received as a firm’s partner 
  • Investments in unlisted equity shares
  • Income from salary/pension/house property/other sources

ITR-4

Individuals, HUFs, Partnership corporations having financial gain from business and profession will take ITR 4 From. Moreover, people who have chosen the presumptive financial gain theme underneath Section 44AD, Section 44ADA, and Section 44AE of the tax Act also can file to utilize the ITR4 kind. Turnover surpassing Rs one large integer can have to be compelled to be filed underneath ITR 3 Form.

ITR-5

The ITR-5 kind is employed solely by the subsequent bodies to file Income Tax Return Filing in Chennai:

  • Firms
  • Limited Liability Partnerships
  • Body of people
  • Association of Persons
  • Co-operative societies
  • Artificial Judicial Persons
  • Local authorities
  • Business Trust
  • Investment Fund

ITR-6

ITR 6 Form will solely be filed electronically by firms, excluding firms claiming an exemption underneath Section 11, that is financial gain from a spiritual or charitable property.

ITR-7

Companies filing the return underneath the below sections of the Income Tax Act will file using ITR-7:

Section 139(4A): People holding property for charitable or non-secular functions

Section139(4B): Political parties

Section 139(4C): establishments or associations mentioned underneath section 10(23A),10(23B), medical establishments, news agencies, academic establishments, agencies concerned in a research project

Section 139(4D): underneath this section, colleges, and universities, or any such establishment wherever revenue and losses don’t seem to be needed to be according to as per the principles set underneath this section of the Act.