Filing Income Tax Return for FY 2020-21
An Income Tax Return Filing is the tax form/s in which the taxpayer files information about his Income. The tax return can be filed through different kinds of Income Tax Returns forms, and the Income earned during a financial year is used to calculate the tax liability.
Tax is a basic need of the country, same as filing for a tax return is a fundamental and first need of people. We are not saying this, the fact is available to us. In the year 2013-14, the number of individual taxpayers was about 4.96 crore, and in the year 2018-19, this number increased to 8.05 crore. There has also been an increase in the number of people filing tax returns in the year 2018-19; before the year 2018-19 number of tax returns filers increased from 3.05 crores to 5.95 crores.
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Who should file an ITR
As per Income Tax Act, 1961 and the Income Tax Rules 1962, every taxpayer must file returns for every financial year. Every taxpayer needs to file ITR on or before the due date. To file ITR for FY’ 20-21, the last is December 31st, 2021, according to the Central Board of Direct Taxes press release to file ITR due date extended to December 31st, 2021 rather previous deadline was July 31st, 2021.
The ITR form with which you will file the return depends on the income source, income earned, and category of taxpayers such as individuals, HUF, or companies.
Well, there is a slight difference between filing a tax return and getting a refund. Filing for a tax return is just a way of getting your money to yourself; you are filing the return for your refund. Getting a refund means “the difference between the tax paid by you and the actual tax you have to pay,” and the tax refund is calculated only on filing the income tax return. And because of this, everyone has to file a tax return because you would never want to pay more tax than your Income.
Income tax slab FY2020-21
You need to file an Income tax Return for the below-specified circumstances. If your gross income is more than,
| Income Tax Slab | New Regime Income Tax Slab Rates FY 2020-21 (Applicable for all individual & HUF both) |
| 2.5 Lakhs – 5 Lakhs | 5% |
| 5 Lakhs – 7.5 Lakhs | 10% |
| 7.5 Lakhs – 10 Lakhs | 15% |
| 10 Lakhs – 12.50 Lakhs | 20% |
| 12.5 Lakhs – 15 Lakhs | 25% |
| >15 Lakhs | 30% |
- If you have more than one source of income like income from house property, capital gains, etc.
- If you have invested or earned from foreign assets.
- If you claim for an income tax refund.
- If the taxpayer is a company, cooperative society, or partnership firm, regardless of profit or loss.
Why Filing an ITR is Important
- It has been made mandatory for filing income tax returns for those who earn a specified amount of annual income. The tax computed needs to be paid by the taxpayer within the selected due date.
- If your income level does not require the filing of returns, even then, you may file returns voluntarily.
- If you apply for a home loan, the home loan company will ask you to provide proof of ITR filing of the last 3 to 4 years. So, it’s wise to keep filing tax returns for every financial year.
- You may file a tax return to claim adjustment against past losses incurred by an individual or a business.
- Delay in the filing of returns attracts a penalty of Rs 5,000 when filed after July 31st, but before 31st, You will have to pay Rs 10,000 as a penalty on filing return after December 31st, but before March 31st. To avoid this penalty, you must file ITR within the due date.
- Getting your money back is a pleasant moment for us, especially when you file a tax return. People who pay more tax amounts than their Income should file a tax return, which is why it’s essential for everyone.
Factors to be kept in mind while, Income Tax Return Filing
There are a few key aspects that you must bear in mind while filing returns.
- Choose the right form
Choosing the correct ITR form is an important step and you can choose the right form, depending on the nature of income earned and total income threshold. Various tax filing platforms automatically choose the right form as per your income details.
There are seven different types of ITR forms:
| ITR Form | For Whom |
|---|---|
| ITR-1 or Sahaj(सहज) | For individuals earning <50 lakhs from salary/pension, one house property & other sources |
| ITR-2 | For individuals income or capital gains >50 lakhs, capital gains |
| ITR-3 | This type of ITR form describes those individual & HUF people who are earning from proprietary business or are carrying on profession. In simple language “Covers all heads of income, earning from business/profession”. |
| ITR-4 or Sugam(सुगम) | This category is applicable to individual or HUF’s partnership firms (other than LLPs) which are individuals earning from any business or profession. |
| ITR-5 | Applicable to firms, LLPs(Limited Liability Partnership), AOPs(Association of Persons) & BOIs(Body of Individual), AJP( Artificial Judicial Person) |
| ITR-6 | Not claiming exemption under section 11 |
| ITR-7 | Persons/companies under sec 139 (4A), 139 (4B), 139 (4C) & 139 (4D) |
- Report the Income Earned
You need to disclose all the income earned during the financial year for which you are filing the return. You must include various sources of income like family pension, capital gains, interest income, etc to ensure every income (also exempt income) is included while calculating the income tax, so you can locate details from form 26AS.
- Form 16 & 26AS
If you are a salaried individual, Form 16 is a key document for filing tax returns. It contains details of your PAN, TAN, salary, address, and tax deducted. In ITR forms, you also need to provide the income details from previous employers and include them while filing the return.
Form 26AS contains details of tax deducted by deductors on your behalf like TDS on salary, on selling a property, interest income from deposits, etc. You can cross-check all details of TDS deductions given in Form 16/16 A by using Form 26AS. It is also an important document for filing tax returns.
- Keep Investment Proofs
You are required to put together all proofs of investments, payment receipts, deductions, or other tax benefit documents. In case of discrepancy, the IT department will ask you to provide the proofs as claimed by you.
How can one seek help in case of any trouble while Income Tax Return Filing
While filing a tax return, you observed that you have furnished incorrect details and want to rectify the mistake, in this scenario you are allowed to do so. Under section 139(5) of the IT Act, you can correct the mistake by filing a revised tax return.
This section specifies that if a taxpayer has filed the return with some incorrect details, he/she has the flexibility to file a revised return before the due date of ITR filing, i.e., 31st July 2019 for FY’ 2018-19.
