Income Tax Return (ITR) filing is compulsory for individuals earning a specified amount of income in a year. Generally, taxpayers are required to file ITR by July 31 of any year (unless extended by the government). This year, the Central Board of Direct Taxes (CBDT) has extended the last date for filing ITR for FY2019-20 (AY2020-21) to December 31, 2020 because of the pandemic.
This means taxpayers still have 15 days to file ITR.
Here are key things to know about ITR filing:
Why should you file ITR?
A person can claim the refund of the excess tax paid/deducted during a financial year by filing an ITR for that year. Also, ITR can be used as proof of income and address.
If the return is filed within due date, taxpayers will be able to carry forward losses to subsequent years, which can be used to set off against income of subsequent years.
Additionally, filing the ITR helps individuals when they have to apply fora vehicle loan or house loan. All major banks can ask for a copy of tax returns.
Where to file ITR?
The process of filing of an I-T return online is known as e-filing.
The I-T department has established an independent portal for e-filing of income tax returns -- incometaxindiaefiling.gov.in.
Additionally, there are certain private entities, registered by the Income Tax department that enables e-filing process through their websites. While filing ITR on income tax department's platform is entirely free, some of the private websites may charge for certain actions.
When should you file ITR?
While the deadline for FY20 is December 2020, it is better to 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. On the other hand, doing it in haste means there is a higher probability of being defective.
What if one doesn’t file ITR?
Taxpayers are required to pay penalties if they file ITR after the deadline. Such ITR filing is known as belated ones. Besides this, a delay in filing ITR also makes one liable to pay interest. Now, in case an assessee doesn't file ITR at all, he/she will not be able to carry forward the losses of the current assessment year.
In case an assessee doesn't file ITR at all, a penalty may be levied which is a minimum of 50 percent of the assessed tax or a maximum of 200 percent of the assessed tax. The assessee may have to face prosecution also (i.e. rigorous imprisonment for a term up to 7 years and fine), in extreme and high-value cases.
What are the documents required to file ITR?
Aadhaar card, Permanent Account Number (PAN) card, Form 26AS and Form 16 are some of the major documents required for filing ITR.
What are the different forms available for filing ITR?
Under the current income tax laws, several forms are available for different types of assessees to file their income tax return for financial year 2019-20 namely Sahaj (ITR-1), Form ITR-2, Form ITR-3, Form Sugam (ITR-4), Form ITR-5, Form ITR-6 and Form ITR-7.
First Published: IST