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ITR Filing
Filing an Income Tax Return means filling out a prescribed form (called an Income Tax Return form) and submitting it electronically (online) or physically (less common now) to the Income Tax Department. This act informs the government officially about your income and taxes.
- The department then reviews this information to:
- Check if you paid the right amount of tax
- Calculate any refund owed to you if you paid excess tax
- Assess penalties if tax payment is insufficient or if you failed to file on time
Why is ITR Filing Important
Filing an Income Tax Return (ITR) is crucial for legal compliance, financial credibility, and accessing various benefits such as loan approvals and tax refunds.
Key Reasons Why ITR Filing is Important:-
- Legal Compliance: Filing an ITR is a legal requirement for individuals and businesses with taxable income.
- Proof of Income: An ITR serves as a valid proof of income and address.
- Loan Approvals: Financial institutions require ITRs for processing loans.
- Claiming Tax Refunds: Filing an ITR allows you to claim a refund.
- Financial Planning and Record Keeping: Helps maintain clean financial records.
- Visa Applications: Filed ITRs demonstrate financial capability.
- Building Financial Credibility: Reflects financial responsibility.
Required Documents For ITR Filing
- Pan card and Adhaar card of taxpayers
- Salary Slip and Form 16 – if any
- Rent as per rent agreement – if any
- Home loan interest certificate – if any
- Stamp duty payment for property purchase – if any
- School fee amount with receipt – If any
- Medical expenses
- Health insurance receipt – if any
- LIC receipt – if any
- Education loan – if any
- Any Other Tax saving investment detail that you want to disclose
- Business name and Business activity
Who Should File Income Tax Returns?
- Individuals with Income Above the Exemption Limit
- Freelancers and Self-Employed Individuals
- Salaried Individuals
- Business Owners
- Individuals with Income from Multiple Sources
- Foreign Income
- TDS Deducted, but Not Filed
- People Who Wish to Claim Deductions
Types of ITR
Resident individuals having income < 50 Lakhs from:
- Salary / Pension
- Other Sources
- One House Property
Income From:
- Every income from ITR-1 > 50 Lakhs
- Capital Gains
- More than one House Property
- Foreign Income / Foreign Assets
- Holding Directorship in Company
- Holding unlisted equity shares
Income From:
- Every income from ITR-2
- Business / Profession
- As a partner in a firm
- Presumptive income > 50 Lakhs
Applicable To:
- Firms
- LLPs
- AOPs
- BOIs
Every income from ITR-1 Presumptive Income under:
- Salary / Pension
- Other Sources
- One House Property
- Total income > 50 Lakhs
Applicable To:
- Companies not claiming exemption under section 11
Persons / Companies Under:
- Section 139(4A)
- Section 139(4B)
- Section 139(4C)
- Section 139(4D)
Drawbacks of Late ITR Filing
- Interest may be applicable under sections 234A, 234B and 234C.
- A late fee will be levied under Section 234F while filing a belated return.
- Losses like business and capital losses cannot be carried forward.
- Deductions/ Exemptions u/s 10A, 10B, 80-IA, 80-IB, 80-IC, 80-ID and 80-IE shall not be available.
Income Tax Refunds
If you have paid more tax than your actual liability, you are eligible for an income tax refund. The refund amount is credited directly to the taxpayer’s bank account.
Due Date to Claim TDS Refund without Penalty is 31st Dec 2025.
Penalty For Not Filing The ITR
The penalty for late income tax return filing is Rs. 5,000 for returns filed after the due date but before December 31, 2025. The penalty increases to Rs. 10,000 for returns filed after December 31, 2023.
Interest is charged at the rate of 1% per month or part of the month until the tax liability is paid in full.
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