Individual Income Tax Filing

INDIVIDUAL INCOME TAX FILING

An Income Tax Return is a form which is used to file the income tax with the Income Tax Department. Income tax is a tax which is imposed by the Central Government on the income of an individual.

The filing of individual income tax is every Indian’s responsibility. The IT department verifies these declarations of income filed, if any amount is paid in excess, the department refunds the amount to the assesses bank account. All individuals are required to file income tax on time to avoid penalties.

The form which contains information of income and tax paid of an assesses is called the Income Tax Return. The Income Tax Department of India has various forms for individual income tax filing such as ITR 1, ITR 2, ITR 3, ITR 4S, ITR 5, ITR 6 and ITR 7.

THINGS TO REMEMBER FOR INDIVIDUAL INCOME TAX RETURN FILING

• An individual must not wait for the due date to file his or her IT return
• An individual must collate all the documents needed to file his or her ITR
• An individual must pick the correct IT return form to file his or her returns.

ADVANTAGES OF INDIVIDUAL INCOME TAX FILING

• Bank loans such as education loans, vehicle loans, personal loans, can be availed easily. All of these require an individual’s last three year’s IT returns
• Immigration centres scrutinize many documents and IT returns proof is a mandatory document for visa applicants for most countries in the world
• An individual will pay hefty penalties for non-filing of income tax returns.
• A taxpayer is eligible for tax refund, when an excess amount of tax is paid, then the actual tax liability. To claim this refund a taxpayer should have filed the returns within the due date
• A tax payer usually receives notices by the IT department to ensure they complete the filing process without any delays. Any loss against house property, depreciation, business loss and any form of loss not set off against the income is eligible to be carried forward to the subsequent years

FILING INCOME TAX RETURNS ONLINE

To file your IT returns, an individual must gather all documents like bank statements, last year’s return and Form 16 and log onto www.incometaxindiaefiling.gov.in. An individual can register on this website using his or her PAN number. An individual’s PAN number becomes his or ID on this income tax portal. The individual must then view Form 26AS. This shows the tax deducted by his or her employer. The TDS on Form 16 must match this amount. Then he or she must download the ITR Form that is applicable to them. If you don’t know the right form, please get in touch with our tax experts at ACE ALLIANCE. Our team will help you complete the form and submit it. Once we have calculated the tax you have to pay, we will help you pay the required tax and enter the challan details on the tax return section of the form.

DUE DATES FOR FILING IT RETURN

• July 31: For a firm or individuals who are not liable for audit
• September 30:  For a company or other who is liable to audit
• March 31: For all individuals and companies filing late returns

INCOME TAX RETURN ACKNOWLEDGMENT

Once the ITR is filed, an acknowledgment slip in duplicate is issued. It consists of details such as:

• The name of the tax payer
• The address of the tax payer
• The status of the tax payer
• The Permanent Account Number of the tax payer
• A brief statement of taxable income that has been paid by the tax payer
• The deductions that have been made
• The details of the tax paid
• Verification details

WHO SHOULD FILE INCOME TAX RETURN

As per the Income Tax Department the entities who have to file IT returns annually are:

• Private limited company/LLP/Partnership firm, irrespective of the income or loss have to file IT returns
• Any Individual who earns income from mutual funds, bonds, stocks, fixed deposits, income from interest, house property, etc
• Any individual who receives income from property under charitable trusts, religious trusts or income from voluntary contributions
• Any individuals or organizations who want to claim tax refunds
• All salaried individuals whose gross income before deductions under section 80C to 80U exceeds the exemption limit
• All individuals with foreign income, foreign assets, NRI’s and tech professionals on onsite deputation
• Any individual who has changed from one job to another is also eligible

BUSINESS TAX RETURN FILING:

The IT Department of India has rules for any business operating in India to file income taxes each and every year. The TDS return can also be filed and advance taxes can be paid to ensure that the business complies with all the IT rules and regulations.

PROPRIETORSHIP TAX RETURN FILING

A proprietorship firm is run by a single person called the proprietor. Proprietorship is not a separate legal entity. Both the proprietor and the firm are considered one and the same by the IT department. Thus, ITR filing for the proprietorship firm is the same as that of the proprietor.

Proprietors have to file IT returns year after year. This procedure is no different than that of individual income tax filing. Any proprietor younger than 60 years of age and whose income exceeds INR 2.5 lakhs is required to file proprietorship tax returns. Proprietors over 60 years but less than 80 years of age and whose total income exceeds INR 3 lakhs are eligible to file proprietorship tax returns. Proprietors above 80 years must file their IT returns if their total income exceeds INR 5 lakhs.

PARTNERSHIP FIRM TAX RETURN FILING

As per the Income Tax Act, all partnership firms are treated as separate legal entities, hence are applicable for tax rates that are on par with LLP’s and companies registered in India. Irrespective of income or loss, a partnership firm has to file IT returns. If the firm has been commercially inactive with no registered income, a NIL income tax return must be filed within the stipulated filing date.

LLP TAX RETURN FILING

All LLPs or Limited Liability Partnerships are considered separate legal entities and their income tax rate is similar to all companies registered within India. The Income Tax Act declares that all LLP’s have to file their tax returns, irrespective of the loss or gain they have incurred in that year. If the LLP has seen no business activity or registered income, then a NIL income tax has to be promptly filed within the stipulated due date.

COMPANY TAX RETURN FILING

All types of business structures like Private Limited Company, Limited Company, Limited Liability Partnership company, One Person Company are registered under the Ministry of Corporate Affairs. All such companies have to mandatorily file their IT returns as prescribed by the Income Tax Act. Any company that is registered with the Government of India and is operational on Indian has to submit its filed IT returns. This is also applicable for those companies which have been dormant, with no business transactions and no registered income or expenses.

DOCUMENTS REQUIRED FOR INCOME TAX FILING IN INDIA

• The bank statements
• The proof of investments
• T.D.S. Certificates in Form 16 or 16A as applicable
• The documents on purchase and sale of investments and assets
• The challan of tax paid such as advance tax or self-assessment tax
• If PAN is applied but not received, a copy of filed PAN application and its acknowledgment
• In case not applied for PAN, a PAN application form must be duly filled in with two passport size photographs
• For a business the copy of the audit report, balance sheet, trading, profit and loss account, personal account of proprietor or partners
• The statement of receipts and payments if no regular books have been maintained
• All the receipts of payment of insurance premium, provident purchase of NSCs, new equity shares, mutual fund, NSS, donations, etc. to support claimed deductions

Once you get in touch with us at ACE ALLIANCE with your request to start your individual income tax filing we will start the process. After our team receives all the details, our team will start the process within 1-2 days. Our team will help you every step filing your income tax returns till the tax is paid, the tax returns are filed and submitted and the confirmation is received for the same from the Income Tax Department.