Is Income tax return Filing Difficult in India?

Is Income Tax Return Filing Difficult in India? Before we actually proceed towards the question mentioned above, Firstly we should know about what is Income Tax Returns(ITR).

ITR is a type of form in which individual files their information regarding their Income accompanied with taxes to the government of India.

Is Income tax return Filing Difficult in India?

If you’re wondering if completing an income tax return is a difficult task, you’re not alone. It isn’t truly the case. In certain circumstances, filing an ITR isn’t even essential, and the task comes in when you need to know whether or not you should file an ITR.

Income Tax Return(ITR) under “Is Income Tax Return Filing Difficult in India?

For answering the question, “Is Income Tax Return Filing Difficult in India?”.It is important to know about ITR, First.

ITR is a type of form which contains the information regarding the Individual’s income and taxes which are supposed to be paid by him during the year(Starting from April 1 to March 31st  next year).

Income can be of various types, according to various businesses, Jobs profile, and other income sources. Some types of Income are:

• Income obtained from a Salary.
• Profit  earned from a business venture.
• Rent or Income obtained from house property.
• The Income obtain from Capital gains.
• From other sources of Income, such as Dividends, Royalties, Interest on deposits, etc.

With regards to different types of Incomes, every individual is expected to file a respective ITR prescribed by Income Tax Department. As per Income Tax Department, there are seven types of ITR Forms that need to be filled according to the nature and amount of income annually of the taxpayer.

Types of ITR Forms

As per Income Tax Department, there are 7 types of ITR Forms. These are:

• Form ITR – 1 : Individual may fill this form, when his total income is up to 50 lakhs  by way of salary along with one House Property, excluding lotteries and agricultural income up to 5000 Rupees.
• ITR – 2: It is filled by individuals and HUFs who are not eligible to fill ITR 1 form and acquired income and profits by means of profession or business.
• Form ITR – 3 : Any Individual who have income from any business or profession will fill this form.
• ITR – 4 :Person/individual, HUFs or Firm who are resident of India and have the income up to Rupees 50 lakh from any profession or any business under Section 44AD, 44ADA, 44AE, is require to fill this form.
• ITR – 5: ITR—5 form is filled by the followings-
  • Firms
  • Body of Individuals
  • Co-Operative Societies
  • Limited Liability Partnerships(LLPs)
  • Association of Person
  • Local Authorities
  • Artificial Judicial Persons
  • Estate of Insolvent
  • Estate of Deceased
  • Investment Fund, and
  • Business Trusts.
• ITR – 6 :  This type of form can be filled electronically by companies, excluding companies which are claiming exemption under Section 11, which is income from a religious or charitable property.
• ITR – 7: Companies can fill this form according to the provisions of Income Tax Act. The prevailing provisions which are used to fill ITR – 7 form are:
  • Individuals who own property for charity or religious reasons are subject to Section 139(4A).
  • Political parties (Section 139(4B))
  • Section 139(4C): Medical institutions, news agencies, educational institutions, and scientific research organisations, as well as institutions or associations indicated in sections 10(23A), 10(23B).
  • Section 139(4D): This section exempts colleges and universities, as well as any other institution, from reporting revenue and losses in accordance with the Act’s rules.

Steps for Filing ITR Forms

Here are a few steps to help you file your ITR online using the internet.

•  To begin, go to the official website of the Internal Revenue Service.
• Create an account on the portal and log in using your ID.
• Select ‘Taxpayer’ from the drop-down menu and input your PAN.
•  Your Personal information such as your name, address, and phone number is mandtory for validation purpose.
•  Provide your email address and phone number.
•  After you’ve completed all of this, click on the ‘proceed’ button.
•  You must then verify your information using an OTP issued to your registered phone number.
•  Enter the one-time password (OTP).
• A window will appear for you to review the information provided by you, once you enter the OTP properly.
•  Finally, you’ll be able to create a password and login.
•  After that, you can click register to obtain an acknowledgement message and a file to return by selecting the ‘return’ option.

Importance of ITR

Filing ITR shows the sense of responsibility among citizens of India. By the help of ITR only the government get to know about the yearly accounts of its citizen and their transactions, which ultimately helps in strengthening the economic aspect of the country and also, for making advanced action plans for the benefit of the country.

 Here’s why it’s critical for you to file income tax returns: 

• Filing tax returns demonstrates that you are accountable. It plays an important role in some circumstances.
• These records are in need when you apply for any loan and credit card companies.
• ITR records are essential document and plays an important role, if you want to make a claim for compensation for prior losses.
• It will also come in handy and be beneficial in the event of updated returns.

What we learned

If you were under the impression that filing income tax returns were a time-consuming task, you can rest assured that it is not.

The only thing which you need to keep in mind is which ITR you can file and what returns will do the work for you.