What is an Income tax return?
 

An Income Tax Return (ITR) is an Income declaration form which you need to fill and submit electronically to the Income tax Department. In this form you need to give details of your income and taxes (taxes - that you may have paid or other people who may have deducted your tax). The ITR forms are in various formats viz ITR-1, ITR-2 etc. Each form depicts a separate category of Income tax payers. You need not worry about your category as Dhan Sarathi Consultants handles it for you automatically.

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Remember, Income tax is a Direct tax and you need to only report Direct Income (salary, pension, interest etc) and taxes paid on that Income. The ITR formats are predefined formats by the Central Board of Direct Taxes (CBDT- which is also called the Income tax Department).

The ITR must be filed every year and must be filed by a specific date. If the return shows excess tax has been paid during a given year, you are eligible for a ‘income tax refund’, subject to the department’s interpretations and calculations.

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Why should you File?

 

Many think that filing tax returns is optional and therefore dismiss it as unnecessary and burdensome. Filing tax returns is an annual event and is a moral and social duty of every responsible citizen.

 

Filing returns is a sign that you are responsible

 

The government mandates u/s 139(1) of Income Tax Act, 1961 that individuals who earn a specified amount of annual income must file a tax return. Failure to pay income tax and file the income tax return will invite penalties from the Income Tax Department.

Those who earn less than the prescribed level of income can file their income tax return voluntarily for below benefits-

 

• Your loan or credit card company may want to see your income tax return

• If you want to claim adjustment against past losses, a return is necessary

• Filing income tax returns may prove useful in case of revised returns

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