Income Tax Return

Income Tax Return: Overview

Know about What is Income Tax Return?

A tax is a financial charge which is levied upon a taxpayer by the Government to provide for various public expenditures. Among all other taxes, income tax is a form of direct tax which involves taxation of the earnings of every person, company or any organisation in a financial year. The earnings of the people can be in any form such as wages, dividends or interest.

Income Tax is that portion of an individual’s income that he/she pays to the Government of India in order to fund the infrastructural development, to pay the salaries to those persons who are employed by the state or the central government. The law that governs the range of provisions of income tax is the Income Tax Act, 1961. Income tax needs to be paid by all the individuals or the Association of Persons (AOP), corporate firms or companies and any local authority.

What is a Return of Income

A return of income is a particular type of form which highlights the sources of income of an individual and also on which taxes can be paid in one financial year to the Income Tax Department. Tax return helps the person to find out the amount of tax to be paid and helps to remit payments or to request funds.

Almost in all countries the Government has mandated that individuals and companies must file a tax return every year if they have received income during the year, whether such income was through wages, any type of interest earnings, dividends on investments or through capital gains. There are different forms available for income tax filing based on different source and these forms are can be found on the online portal of the Income Tax Department of India. Basically, there are nine forms available which are all different and are required to file income tax returns. The different forms that are available for filing of income tax returns are as follows:


There are nine different types of tax return forms which are available and cater to different needs. The forms are discussed as follows:

  1. ITR-1 – The ITR-1 form is the first form available for filing of income tax return. This form is also called SAHAJ. ITR-1 or SAHAJ is concerned with the income of the person who has a salary, pension or receives income from property or from any other source such as race horses, lottery winnings etc.
  2. ITR-2 – The ITR-2 form is the second form available for filing of income tax return. This form is applicable for the individual or the HUFs who have income which is not from the profits or gains of a business or otherwise profession.
  3. ITR-3 – The ITR-3 form is the third form available for filing of income tax return. This form is applicable for different persons or the HUFs whose source of income from profits and gains of a business or profession.
  4. ITR-4S – The ITR-4S is the fourth form available for the filing of income tax return. The ITR-4S form is also referred to as SUGAM. ITR-4S or SUGAM is suitable for persons who are opting or choosing for the tax scheme under Section 44AD/44AE which is also called presumptive scheme of tax.
  5. ITR-4 – The ITR-4 form is the fifth form available for filing of income tax return. The ITR-4 form is applicable for persons who are engaged in sole proprietary business.
  6. ITR-5 – The ITR-5 form is the sixth form available for filing of income tax return. The ITR-5 form is applicable for any firm, BOI, or any artificial juridical person, any local authority or co-operative society.
  7. ITR-6 – The ITR-6 form is the seventh form available for filing of income tax return. The ITR-6 form is applicable to those alternate companies other than the ones who are entitled to a deduction under Section 11 of Income Tax.
  8. ITR-7 – The ITR-7 is the eighth form available for filing of income tax return. The ITR-7 form is relevant for all those enterprises who are required to file tax returns under the section 139(4A) or section 139(4B) a return of their income.
  9. ITR-V – The ITR-V form is the last form available for filing of income tax return. The ITR-V form is the acknowledgement form which depicts the filing of the income tax return.

Is it Necessary to File an Income Tax Return?

The Income Tax Department of India have made it compulsory for the individuals to file income tax returns. The conditions for filing of income tax returns are as follows:
  • A person with an age of less than 60 years has an annual income of Rs.250000.
  • A person with an age between 60 years to 80 years and has an annual income of Rs.300000.
  • A person who is above the age of 80 years and has an annual income of Rs.500000 needs to file for income tax return.
  • A company or any organisation is bound to file for an income tax return no matter if the company is in loss or profit.
  • If there exists a loss under the head of income that needs to be carried forward.
  • If any individual who is a resident of India and he/she has any financial interest outside the geographic territory of the country.
  • If an individual applies for a loan or Visa.
  • If an individual who receives income from property which is held under any kind of trust for charitable purposes or any research association, educational centre or any medical centre, trade union or any non-profit university.
If any Non-Resident Indian has his income sources from India, then he/she is also liable to pay the taxes and also to file Income Tax Returns.


With the implementation of e-filing of income tax returns, following are the cases which will require the e-filing of the income tax:

  1. When the income tax refund is needed.
  2. When the total annual income exceeds Rs.5,00,000.
  3. When the income tax return is paid online, the ITR-3, 4, 5, 6, 7 forms are compulsory to be e-filed.

How to File Income Tax Returns Online?

The documents that are necessary for filing of income tax returns online are as follows:
  • The bank statement
  • Form 16
  • A photocopy of the last year’s income tax return
After having the required documents ready with the individual, following are the steps that should be taken by the person for income tax returns filing.
  1. The individual must ensure that the URL needs to be followed for filing of income tax returns is e-filing.
  2. After setting the URL to e-filing the next step that the person has to take is the registration. In the process of registration, the Permanent Account Number of the individual or the organisation acts as the user ID.
  3. Tax Credit Statement or the Form 26AS has to be verified for the last financial year. It will depict all the amount of taxes deducted and already deposited.
  4. TDS which stands for Tax Deducted at Source or Form 16 should match with the figures mentioned in the Form 26AS.
  5. Tax Return of the present year – Under this, the person is required to click on the ‘download’ option and then on the Income Tax Return Forms and the next step which the person is supposed to follow is to opt for the latest financial year. The correct ITR form should also be then downloaded.
  6. The next step which the individual has to follow is to fill the form in the Return Preparation Software which is a spreadsheet by using all the details from the Form 16.
  7. The individual will then be required to amount of tax that needs to be paid by him by clicking on the ‘Calculate Tax’ tab.
  8. After calculating all the amount of taxes that is being required to be paid by the individual or organisation, the next step is to confirm the information which has been fed through the ‘Validate’ tab.
  9. After confirming all the provided information, it is recommended for the individual or the organisation to generate an ‘XML file’.
  10. After the present financial year has been selected in the ‘Upload Return’ link which is on the left hand side of the portal’s navigation area and then select the saved ‘XML file’.
  11. If all the information has been entered and the process of filing of income tax return has been successfully completed, the individual will then be able to download the ITR-V form which is the acknowledgement form.
  12. A copy of the ITR-V form should be signed on and then sent to the office of the Income Tax Department within 4 months of filing the income tax return.
It is not necessary that an individual can only file for an income tax return from the authorized site of the Government of India but there are also many private sectors that permit filing income tax returns. The private sectors in return of the service rendered charge a particular fee from the individual. The amount of fee charged varies from firm to firm.

Advantages of Filing Income Tax Return Online

The process of filing of Income Tax return used to be a tiring as well as difficult process but with the introduction of the filing of income tax online, the burden of the people has lessened. The online method for filing of income tax returns helps an individual in the following ways:

  • The filing of income tax returns online finishes by July 31st of every year and an individual filing their tax returns in advance avoids the problem of over traffic and thereby saves time. Online tax filing helps individuals to file their income tax much before the dreaded deadline and thus they do not feel burdened as the due date draws near. By July 31st their tax has been filed and the time is saved.
  • Not filing the income tax return in time can lead to penalties charged on that individual. Thus, filing of income tax return online is recommended. If the individual does not file his returns by the due date of July 31st and delays then the Income Tax Department charges a penal interest on the individual’s income for every day for which the delay continues. Longer the individual extends the filing date the higher would be the interest charged. Online filing of tax thus helps individuals to avoid this interest expenditure as the taxes are easily filed before the due date.
  • When the individual or company files an income tax return online on time year after year, it reflect positively on the individual’s or the company’s financial history. In future, banks and lending institutions favour individuals and companies with a good financial history when a loan is sought.
  • Filing of income tax online also provides a proof of all the financial records of the organisation. Whenever the individual or the company seeks a loan from any bank or financial institution, a proof of income is required. An income tax return provides this proof of income.
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