Income tax returns are forms in which taxpayers file information regarding their earned income and the respective tax applicable to the Income Tax Department. There are different types of income tax return forms depending on the taxpayer’s category and income type. It is a form that an individual every year submits to the Income Tax Department specifying the income of a person and the amount of tax payable to the government. pertaining to a particular year i.e starting from 1st April and ending on 31st March every year.
Income can be in various forms such as:
- Income from Salary
- Profit and Gains from Business or Profession
- Capital Gain
- Income from House Property
- Income from Other Sources such as interest on deposits, dividends, etc.
Depending upon the source of income, the Individual shall report the income in respective form that the Income Tax Department issues every year. The Return shall be filed within the time limit as specified in the Income Tax Act, 1961.
An individual (other than a company or firm) is required to mandatorily file his/her ITR in the following cases:
1. The Total Income exceeds the Basic Exemption Limit:
There are different basic exemption limits applicable based on age. Those who are below the age of 60 years, he/she have to pay tax only if their taxable income exceeds Rs. 2.50 lakhs, Those over 60 but below 80 years, enjoy an exemption up to Rs. 3 lakhs. Very senior citizens who have already crossed 80 years enjoy free income up to Rs. 5 lakh every year.
2. Deposit in Current Accounts:
If in total, an amount of more than Rs. 1 Crore is deposited in on or more current account of a single person, then that person has file its return irrespective of the total income.
3. Deposit in Saving Bank Accounts:
If any person makes deposits aggregating of more than Rs. 50 lakhs in one or more of its saving bank accounts during the previous year, such person is required to mandatorily file its ITR.
4. Expenditure towards Travel to Foreign Country:
If any individual has incurred expenditure of more than Rs. 2 lakh for himself or for any other person for travel to Foreign Country, such individual has to mandatorily file its ITR.
5. Tax Deducted at Source/Tax Collection at Source:
TDS is levied on income earned from salaries, commissions, dividends, contractual work, professional charges, sale, rent, and purchase of immovable property, interest income and rate on them vary from income to income. If any person’s aggregate amount of Tax deducted at Source/Tax Collection at Source is 25,000 or more or in the case of Senior Citizens is Rs. 50,000 or more, such person is required to mandatory file its ITR.
6. Consumption of Electricity:
If any individual has incurred more than Rs. 1 lakh towards payment of electricity bill, then it is required to file ITR.
7. Business Turnover:
If you are running a business and your total sales, turnover or gross receipts in the business exceeds Rs. 60 Lakhs during the previous year, you need to file ITR.
8. Professional Receipts:
If you are a professional and the total gross receipts in profession exceeds Rs. 10 lakhs during the previous year, then it is mandatorily to file ITR. Professional Receipts is defined as the gross receipts earned by the professionals coming under the Income Tax Rules.
If any one of the above-mentioned conditions satisfies in the case of an individual (other than a company or firm), such individual is mandatorily required to file Income Tax Return. Whether it is mandatory to file or not, one should always file the return because of the added advantages.