Only four days are left for taxpayers to file their income tax returns (ITRs) for income earned in the financial year 2019-20 (the assessment year 2020-21). According to Income Tax (I-T) laws, filing ITR is compulsory for individuals earning a specified amount of income in a year.
Through an income tax return, a person can communicate the particulars of the income earned and any taxes paid on it in a financial year to the I-T department and hence claim a refund of the excess tax paid.
Filing the income tax return after the due date, which is December 31, 2020, for FY19-20, may attract a penalty, the exact amount of which will depend on factors such as the total income and the degree of delay.
As the deadline nears, experts advise taxpayers to it file it as soon as possible. Waiting for the last minute can lead to errors or may also involve hiccups in filing due to challenges thrown by the e-filing. According to Daphne Anand, chief technology officer, IndiaFilings—a cloud-based business services platform, ITR filing requires diligent care and attention to ensure that the details are accurate.
"Doing it with enough attention in the first place would avoid rectifications and revisions later. On the other hand, doing it in haste means there is a higher probability of being defective," she opines.
IT department issues notice to taxpayers whose ITRs are defective, which can be another headache for them.
As of December 24 , around 3.97 crore taxpayers have already filed their income tax returns for assessment year (AY) 2020-21 (the fiscal year 2019-20). This includes 2.27 crore taxpayers filing ITR-1, 85.20 lakh filing ITR-4, 46.78 lakh ITR-3 and 28.74 lakh filing ITR-2.
The I-T department provides various forms for income tax assessees to file their ITR.
Meant for different types of taxpayers, such as salaried or self-employed individuals and companies, these income tax forms are known as ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6 and ITR-7.
Income tax laws also require the public to verify the income tax return after submission. The Income Tax Department provides five ways for ITR verification: through an Aadhaar OTP (one-time passcode)-based process, through a bank ATM/bank account, through a Demat account and through net banking.
After e-filing, users can also find information on the status of their submission through the Income Tax Department's website.
