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The ITR (Income Tax Return) is a form on which the taxpayer reports information about his income received and taxes due to the income tax department. To date, the department has announced 7 different forms, namely ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, & ITR 7. Every taxpayer is required to submit their ITR by the deadline, if not earlier. Depending on the taxpayer's sources of income, the amount of income earned, and the category to which the taxpayer belongs (individuals, HUFs, companies, etc.), different ITR forms may be applicable in different situations.
People who fail to file their income tax returns are subject to a penalty of Rs 10,000 under section 234F as of FY 2017–18, according to the Income Tax Department. ITR filing on time prevents needless fines. Even though the fine has been reduced to Rs 1,000 if your annual income is less than Rs 5 lakh, it is still your responsibility as a law-abiding citizen to file your tax reports.
ITR receipts must be securely stored because they are crucial evidence of your income and tax payment. It is considerably more thorough than Form 16. It includes information about your entire income as well as information about your revenue from other sources.
When you apply for high-value loans, like as home and auto loans, banks and NBFCs typically require ITR receipts from the previous three years. The ITR is regarded by lenders as the most reliable proof of a person's income. Therefore, if you intend to get a home loan or a car loan in the future, you need file income tax returns on a regular basis.
For the purpose of processing your visa application, embassies of industrialised nations including the United States, United Kingdom, Canada, and Australia require ITR receipts from prior years. They are really picky about your tax compliance, thus you are required to provide old ITR invoices. This enables them to evaluate your income and make sure you can cover the costs of your trip.
Losses from the current fiscal year cannot be carried over to the following fiscal year until an ITR is filed. According to the income tax law, if the ITR is not submitted by the deadline, people are not permitted to carry forward losses and offset them against income from future years. As a result, it's critical to submit your income tax return by the due date in order to claim the losses in subsequent years.
Income Tax Return (ITR) filing is the process of declaring your income, expenses, and taxes owed to the government for a specific financial year.
Filing ITR is essential for legal compliance, claiming refunds, and availing loans or financial assistance. It also helps maintain your credit score.
Documents needed include Form 16, salary slips, bank statements, investment proofs, and other income-related documents.
The deadline for individual taxpayers is usually July 31st of the assessment year, but it may vary based on the financial year.
Missing the deadline can result in penalties, interest on taxes owed, and restrictions on claiming refunds.