The new tax regime concludes that income tax exemption increased up to 7 lahks for individual taxpayers. The Centre has announced the forms for submitting I-T returns by both individuals and businesses for the fiscal year 2022–2023.
Through a notification dated February 10, the Income-Tax Department informed ITR forms 1-6, ITR-V (verification form), and ITR acknowledgement form of the change. Such ITR forms received notification in the first week of April 2022.
ITR-1 and ITR-4 are less complex ITR forms that many small and medium-sized taxpayers use. An individual with income up to Rs 50 earned from a salary, one residential property, and other sources may file an ITR-1 (interest, etc.).
Hindu Undivided Families (HUFs), businesses, and individuals with a combined income of up to Rs 50 lakh from their businesses and professions may file an ITR-4.
What Is an Income Tax Return?
A document known as an income tax return (ITR) is used to submit data about your earnings and taxes to the income tax division. A taxpayer's tax obligation is determined by factoring in their income. If the return reveals that too much tax was paid in a given year, the taxpayer will be qualified for an income tax refund from the Income Tax Department.
A person or corporation that receives any income during a financial year is required by law to file a return each year. The revenue may come from a wage, business profits, rental income from real estate, dividends, capital gains, interest payments, or other sources.
Either an individual or a firm must file tax returns by a certain deadline. The taxpayer must pay a penalty if the deadline is missed.
Advantages of Income Tax Return:
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Prompt processing
Income Tax Returns (ITR) are quickly acknowledged. More crucially, refunds, if any, are handled more quickly than returns filed on paper.
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Increased precision
With built-in validations and electronic connectivity, e-filing software is seamless and significantly reduces errors. Paper filings are susceptible to mistakes. There is a chance of human error in data entry when a paper-based form is converted to an electronic system.
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Convenience
Online tax filing has no time or location restrictions. You can file electronically whenever and wherever you like because the service is open around-the-clock.
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Confidentiality
Better security than paper filings because nobody can access your data accidentally or on purpose.
Paper filings increase the risk that information about your income will end up in the wrong hands at the offices of the Income Tax Department or your chartered accountant.
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Availability of historical data
While filing returns, it is simple to retrieve historical data. When filing subsequent returns, the majority of e-filing programmes make it simple to access data that has been securely stored.
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Evidence of receipt
You promptly receive filing confirmation through email on your registered email address both at the time of filing and moving forward.
Is filing an income tax return required?
If your earning exceeds the basic exemption limit, it is required that you file income tax returns under Indian tax regulations. Taxpayers are given advance notice of the income tax rate. In addition to incurring late filing fines, filing taxes late will reduce your ability to obtain a loan or a travel visa.
What is Form 26AS?
The portion of tax withheld at source from payments/investments made by individuals, workers, and independent contractors is shown on Form 26As, which is a crucial document. This gives the taxpayers the opportunity to request refunds for any delayed or excess tax payments.
To facilitate online income tax return filing and promote adherence to all tax requirements, the new Form 26AS, effective for AY 2023–24, has been updated.
The new Form, 26 AS's statements of financial transactions, are a key component. As the name suggests, these are declarations in which the taxpayers list all significant financial transactions that they performed that might be advantageous to them when completing their returns.
Your Aadhar card information, date of birth, email and home addresses, date of birth, and mobile number will all be displayed in the new format of 26AS.
It will state if there are any ongoing or concluded tax disputes with the tax authorities.
Which ITR Form ought you complete?
According to their income, taxpayers may be needed to complete a number of forms, which are listed on the Income Tax Department's official website.
While some of these forms are simple to complete, some call for more information, such as your profit and loss statements. Here is a brief guide to help you understand the available ITR forms:
ITR-1:
Sahaj or ITR-1 is required for anyone who is a resident (other than one who is not typically a resident) and has a total income of up to Rs. 50 lakh, and receives income from salaries, one house, other sources (such as interest), and up to Rs. 5,000 from agriculture.
ITR-2:
Individuals and HUFs who do not receive income from business or professional profits and gains should file this ITR form.
ITR-3:
The ITR-3 form is for individuals and HUFs(Hindu Undivided Families) who have income from business or professional profits and gains.
ITR-4:
(Sugam) You must complete this ITR form if your business generates presumed income for you. Individuals, HUFs, and Firms (other than Limited Liability Partnership) who are residents and have a total annual income of up to Rs. 50 lakh from their businesses and professions as determined by Sections 44AD, 44ADA, or 44AE are required to submit this form.
Conclusion:
The aforementioned material is based on our understanding of the current tax legislation. Thus before acting, you should speak with a tax advisor.
