ITR : Know about Which ITR Should I File?, Types of ITR and how to FIle ITR for FY 2019-20 (AY 2020-21)
ITR : CBDT (Central Board of Direct Taxes ) has extended the last date for filing ITR for AY 2019-20 (FY 2018-19) till 10th January 2021.
1. What is ITR
The Income Tax Return or ITR is a form in which the taxpayers submit information about their income and tax payments to the income tax department. A taxpayer should file ITR on or before the due date specified. The ITR form applicable to a taxpayer depends on the type of taxpayer, whether individuals, HUF, company, etc., and you choose the ITR based on the nature and type of income and total income. Every taxpayer should also calculate the tax payable and make payments before filing the ITR. You should file an ITR in case of a carry forward of losses and set off of brought forward losses.
While filing your ITR, you should check the form 26AS for details of TDS and other income such as FD interest. You should also have your form 16 to enable filling the details of salary and tax saving deduction claims.
2. Types of ITR
The department prescribes seven types of ITR forms based on the type of taxpayer and income:
- ITR-1 for individuals resident in India and with total income up to Rs 50 lakh. An individual having income from salary, house property and other sources can file ITR-1. An NRI cannot file ITR-1. Salaried taxpayers can use their form 16 to file ITR. The form 16 can be directly uploaded on https://cleartax.in/income-tax-efiling to file your income tax return.
- ITR-2 for individuals and HUF for their income other than income from business or profession. Individuals and NRI having income from salary, house property, capital gains and other sources can file ITR-2. Salaried individuals who have gains or losses from buying and selling shares should file ITR-2.
- ITR-3 for individuals to report their income from a business or a profession. Salaried individuals who have income from intraday trading in shares or income from futures and options should file ITR-3. Individuals can report income from salaries, house property, capital gains, business or profession (including presumptive income) and other sources in ITR-3.
- ITR-4 for individuals, HUF and partnership firms for their income under presumptive scheme of taxation. ITR-4 is for income from a business whose turnover is up to Rs 2 crore and taxed under section 44AD. Also, ITR-4 is for income from a profession whose turnover is up to Rs 50 lakh and taxed under section 44ADA. A freelancer carrying out a notified profession can file ITR-4.
- ITR-5 for partnership firms, LLP, AOP and BOI. Business entities such as LLP, partnership firms, AOP and BOI can file ITR-5 for reporting income from business and profession and any other source of income.
- ITR-6 is the income tax return for companies to file income from business or profession and any other sources of income.
- ITR-7 is the income tax return for companies, associations and trusts claiming income tax exemption.
3. How to file ITR
You can e-file your ITR for the FY 2019-20 corresponding to the AY 2020-21. The filing should be mandatorily online for all types of taxpayers except super senior citizens aged 80 years and above.
The income you report falls under income from salary, house property, business, or profession, capital gains and income from other sources You calculate the aggregate income and claim tax deductions for tax savings and others. From the income tax payable, you reduce TDS on your income, TCS, advance tax and other tax credits. You can claim a tax refund of excess tax or TDS paid. In a case where you have balance tax payable, you should pay the same before filing the ITR.
4. Types of Forms for ITR e-filing
Form 16 is a salary TDS certificate an employee receives from the employer. Form 16 provides the details of gross salary, exemptions such as HRA and LTA. The form also contains the details of the net taxable salary, any other income/loss reported by the employee, tax saving deductions and salary TDS.
Form 26AS contains details of tax deducted at source or TDS on various incomes such as salary, interest and on sale of immovable property. The form also contains details of self-assessment tax, advance tax paid by a taxpayer and specified financial transactions.
Form 15G and Form 15H:
Form 15G and Form 15H enable you to receive income without TDS. You can submit a Form 15G in a case you are below 60 years of age and where your annual taxable income is below the basic exemption limit. You can submit a Form 15H in case where you are a senior citizen and the tax due on your total income is nil. You need to submit the form 15G or form 15H to the person paying you income.
FAQ’s on ITR
My income is already subject to TDS, do I need to pay further tax while filing ITR?The TDS on the income may differ from the actual tax liability on the income earned. In general, TDS rates are a fixed percentage of the payments, while your income gets taxed at slab rates. In case the TDS is lower, you may need to pay the balance tax due. In case the TDS is high, you may claim a refund. In any case, while filing your ITR, you should aggregate the annual income from all sources and calculate the tax due/claim refund.
Are there any interest liabilities on the tax due calculated on my annual income?In a case where your tax payable before claiming TDS exceeds Rs 10,000, you may have an interest liability. The interest liability is 1% per month calculated on the balance tax. You can reduce the interest liability by an early payment of tax dues. You need to pay the balance tax along with any interest dues before filing the ITR.
You can avoid the interest liability by planning your tax payments under ‘advance tax’ within the financial year.
Has the due date for filing ITR extended for AY 2020-21?The due date to file ITR for AY 2020-21 is 10th January. The usual due date stands extended due to the outbreak of the pandemic COVID-19. However, in case you have balance tax payable above Rs 1 lakh, you should pay by 31 July 2020. A failure to pay by that date makes you liable for penal interest at 1% per month. The penal interest is in addition to interest liabilities if any on your tax payable.
How can I claim a tax rebate under section 87A on tax and a refund of TDS?
Should I file an ITR in the case of a loss from business or house property or sale of shares?
What is the late fee for filing ITR after the due date?The late fee is Rs 5,000 for a return filing after the due date but before 31 December 2020. For the AY 2020-21, a late fee of Rs 5,000 is payable for a return filing from 1 December 2020 to 31 December 2020. The late fee is Rs 10,000 for a return filing from 1 January 2021 to 31 March 2021.
However, the late filing fee shall not exceed Rs 1,000 if the total income of a taxpayer does not exceed Rs 5 lakh.
How to check the ITR status?You can check the status of your ITR and about ITR processing status at https://www1.incometaxindiaefiling.gov.in/e-FilingGS/Services/ITRStatusLink.html?lang=eng using your PAN and ITR acknowledgement number.
How can I check the status of IT refund?You can check your IT refund status at https://tin.tin.nsdl.com/oltas/refund-status-pan.html
How can I calculate my income-tax?You can calculate income-tax using tax calculator https://cleartax.in/paytax/TaxCalculator
How can I apply for a PAN card?You can apply for PAN card online. To know the step wise procedure to apply for PAN card, refer https://cleartax.in/s/how-to-apply-for-pan
Can I get an instant PAN using Aadhaar?You can get an instant PAN using Aadhaar through an Aadhaar based OTP received on your mobile number.
How to link PAN to Aadhaar?You can link PAN to Aadhaar in a simple two-step procedure and also through your e-filing login on the income tax portal.