What is an ITR?
ITR or Income Tax Return is a “Form“, which all taxpayers in India need to fill and submit to the Income Tax Department (ITD), to report their Income and Deductible Tax and Claim Rebates.
An Income Tax Return (ITR) is a form that enables a taxpayer to declare his income, expenses, tax deduction, investment, taxes, etc. The Income-tax Act, 1961 makes it mandatory for a taxpayer to file an income tax return under various scenarios.
E-filing refers to the process of filing an Income Tax Return (ITR) online. By accessing the new income tax portal using PAN-based login credentials, individuals can take advantage of a range of features that simplify the tax filing process.
Why is Income Tax Return Filing Important?
The income tax department has mandated to file the return to individuals only if their income is above basic exemption limit or if they meet certain criteria like expenditure on foreign travel being more than Rs. 2 lakh, the electricity consumption of Rs.1 lakh or more, deposit an amount/aggregate of an amount above Rs.1 crore in one or more current accounts in FY 2019-20 or onwards.
ITR filing is also mandatory if business receipts exceed Rs.60 lakhs, professional receipts exceed Rs.10 lakhs and TDS and TCS amount exceeds Rs.25,000.
In the case of a resident whose asset is located outside India or who has signing authority for an account-based account outside India, It is always a good idea to file your ITR even if you are not eligible due to the benefits.
Hence it is advisable to file ITR even if your income is below the basic exemption limit.
Filing of ITR creates a valid proof of income or net worth
ITR is required for applying for any loan in the future
ITR is required by banks even for applying credit cards
ITR is required for VISA applications, etc.
ITR is required for obtaining Term insurance
ITR is required for obtaining government tenders