Income tax return filing is a nightmare for many, but its a task that needs to be done by any person liable to pay tax/claim refund. There are certain things which you need to know when you file your ITR, more importantly if you are a first timer. It is not just a penalty and interest that is imposed on you that you need to be mindful about, but there are other consequences as well. Here are some insights on filing your IT return, late filing and related consequences;

1) Who should file an ITR:

Any Person with Gross Total Income exceeding 2.5 lacs (before allowing any deductions ) . However the limit is 3 lacs for senior citizens (aged >60 years but less than 80 years) and 5 lacs for super senior citizens ( aged 80 years and above) OR if a person wants to claim income tax refund .

2) When to file an ITR :

Every individual has to file ITR before the due date without any late fee or penalty . Tax Payers filing their return beyond such due date will have to pay interest under Section 234A. The due date varies between tax payers . For instance , 31st July is the due date for assesses who are not required to get their books audited .

3) Which form to use to file your ITR :

The ITR Form and corresponding incomes are listed below :

ITR 1 – Salary Income , House Propery Income  and Income From Other Sources ( Interest income , Winnings from lottery etc)

ITR 2 – Salary Income, House Property Income (more than one House Property)  , Capital Gain Income , Income From Other Sources , Agricultural income upto Rs .5000

ITR 3 – Salary Income, House Property Income (more than one House Property) , Capital Gain Income , Income From Other Sources , Proprietorship Business Income , Professional income , Partnership income and agricultural income more than Rs.5000

ITR 4 S-  Individuals opted for the presumptive income scheme as per Section 44AD , Section 44 ADA and Section 44AE of the income tax act .

Conceptual hand writing text caption showing Tax Return

4) How to file an ITR :

  • Self-Assessment: Filing ITR is based on self-assessment. Hence, the onus is on the individuals to disclose all incomes even if it’s an exempted income. Assesse (Individuals) often fails to disclose petty incomes like bank interest (Saving and Fixed deposit ) which often leads to notice from income tax department .
  • Verify Form 26AS : Form 26AS is an annual consolidated income tax credit statement .Individuals should check if all the incomes reflected in Form 26AS is included in ITR . Ignorance of this ends up in mismatch and leads to notice from income tax department, which would become an headache later
  • e-Verify : Once the ITR is filled and submitted , make sure that the return is e verified with in 120 days . You can also send the signed acknowledgement to the income tax CPC office if you are not able to e verify the same. Your return won’t be processed unless you e verify .The return filed but not e verified will be treated as an invalid return. An invalid return would mean that you have not filed the ITR return for a particular assessment year . However you can file condonation of delay under Section 119 and whether to allow the same or not is at the discretion of the commissioner of income tax.

Note: Every individual shall keep a safe custody of all the documents relating to the deductions claimed to avoid further inconvenience during the proceedings. Such documents include the deductions claimed under Section 80C, Section 80D etc

5) Why you should file ITR on time:

  • File your retun on time without errors to avoid penalty upto Rs.10,000 under secrion 234F.
  • If you don’t file the return on or before the due date, the rate of 1% will be charged every month, or part of the month, on the amount of tax remaining unpaid as per section 234A.
  • Carrying forward of the losses is not allowed if you don’t file the return on or before the due date. You will be deprived of carrying forward your losses for set off against your income in the next years.

I hope you have found the information in the article useful. If you would like to discuss any of the points raised, please contact me at rahulrnambiar91@gmail.com

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4 Comments

  1. S Govindaswamy says:

    I am 88 years old. My Gross income is more than Rs 5 Lakhs. After 80 TTB deduction it is less than Rs 5 Lakhs. Hence I have not to pay any tax. Is it necessary to file IT Return.
    MF Dividend is totally exempted from tax. Why is it not listed in E1 of ITR 2 for A.Y 2020-21

    1. carahulrnambiar says:

      Hi Sir
      Since your Gross income is more than 5 lakhs you need to file Income Tax Returns even though your tax payable is nil.
      Mutual Fund Dividend is exempted from income tax for this year. You can show this under Section 10(34) Exempt income category. Since you don’t have any Capital Gain income you may file ITR 1.
      Mutual Fund Dividend will be taxable from FY 20-21 on wards as per the latest amendment.
      Kindly write to me at rahulrnambiar91@gmail.com in case of any queries.

  2. Viswanatha Iyer says:

    Which ITR form is to be used by an individual having income from salary/pension and income from one house property which is jointly owned by himself and spouse

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