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Nothing proves your financial understanding and responsibility than timely income tax return filing. Contrary to popular belief, income tax return filing is not as complicated as it sounds. As a taxpayer, timely income tax return filing enables you to provide proof for your annual income, carrying forward losses and claiming an income tax refund.
Income tax return is a form that enables a taxpayer to declare his income, expenses, tax deductions, investments and taxes . The Income Tax Act, 1961, renders timely income tax return filing is mandatory. So, it is of extreme importance to keep income tax return last date in mind.
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The Income Tax Department offers the service for electronic income tax return filing (e-filing) as well. So, if you are not sure about how to file ITR, you don't need to worry as the online portal of the Income Tax Department has made the income tax return filing process quick and hassle free.
Also Read: 4-Point Checklist When Filing Income Tax Returns (ITR)
What is the Income Tax Return Last Date?
Income tax return filing last date is the date by which any individual can file his/her return without any penalty or fees under Section 234A and penalty under Section 234F of the Income Tax Act, 1961. The Income tax return last date 2020 (Assessment year 2020-2021) for all taxpayers is 31st July, 2020. The income tax return filing last date for the following taxpayers is 3oth September, 2020 –
1. Corporate Assessee
2. Non-corporate Assessee (whose books of accounts are essential to be audited)
3. Partner of a firm whose books of accounts are essential to be audited
Reasons for filing ITR on time
Even though income tax return filing not a mandate for some individuals, there are several advantages that one can benefit from, provided they have filed their ITR. Take a look at the following reasons for filing your ITR on time:
1. Claim tax refunds
There could be a probability that on some investments, there has been a tax deduction at source (TDS). In case TDS has been deducted, an individual must complete the process of income tax return filing to claim the refund. If you have paid excess tax on your income, then you can file for a refund from the income tax department. To get this refund, it is mandatory that your income tax return filing is made on time.
For instance: Rupanshi, who is currently unemployed, has invested most of his savings in fixed deposits. The bank deducted 10% TDS at maturity on the interest earned on fixed deposits. But, she is not liable to pay any taxes as she is unemployed and fall in the tax slab with no tax liability. So, it becomes essential for her to file Income Tax Return to claim a refund of the Tax Deducted at Source by the bank which was holding her deposit.
2. Documents Processing
When applying for loans, the eligibility and consideration of loans depend on the individual's income as established through ITRs filed. Income tax return filing gives a detailed picture of your total income earned during a year and the taxes paid on it. You need to maintain your ITR receipts after income tax return filing, as they are essential evidence of your income and tax payments. Another benefit of income tax return filing is that the details of ITR receipts that an individual receives are much more detailed than Form 16, as it includes your complete income details and features your income from other sources.
3. Carry-forward your losses
Rules of Income-tax permits one to carry-forward their losses to match them against any capital gains and applies to only those individuals who have filed ITR for the applicable year of evaluation. There are prospects that one might have sustained some or any losses. In such a situation, you cannot stay away from income tax return filing based on your income being under the exemption limit. Income tax return filing neutralizes the losses incurred as they can get carried forward to set them against the capital gains of the successive years.
Also Read: How Salaried Professionals Can Save Tax
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FAQ's For Income Tax Return Filing
1. What is ITR and income tax return filing?
Income Tax Return (ITR) is a type of form in which the taxpayers file information about their income and tax pertinent to the income tax department. Till date, the department has reported seven such forms, namely ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 & ITR 7. Every taxpayer should complete income tax return filing on or before the stipulated due date. The applicability of ITR forms differs depending on the source and amount of earned income.
2. Why is income tax return filing necessary?
The total gross income denotes the total revenue and is calculated before any deduction allowance under sections 80C to 80U of the Income-tax Act, 1961 . Even if the income is lower than the basic exemption limit, you would be required to complete their income tax return filing in India. Even in case you are holding assets abroad, or if you are a beneficiary to any foreign assets or financial interests, income tax return filing is mandatory under the Double Taxation Avoidance Agreement (DTAA).
3. What documents are needed for income tax return filing?
Income tax return filing requires you to have the following documents:
1. Permanent Account Number (PAN)
2. Aadhaar Identification Number
3. Copy of tax returns of the previous year
4. Bank statements
5. Form 16
6. A summation of all the interest income earned during the financial year
7. Other tax Deducted at Source (TDS) certificates
4. Is it required to affix documents with Income tax return?
The forms of income tax return filing, whether it is filed manually or electronically, do not include any documentation such as investment proof, and TDS certificates. However, the income tax return filing records should be maintained by you (taxpayer) and generated in situations such as evaluation, scrutiny, before the tax authorities when requested.
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5. Where does a taxpayer file his ITR electronically?
The income tax department has established an independent portal for electronic Income tax return filing (e-filing). The taxpayers need to log on to
www.incometaxindiaefiling.gov.in for electronic income tax return filing. The department's e-filing tool is simple, easy to use and also guides on how to file ITR.
6. How will I get refund for any excess tax already paid?
During the process of income tax return filing, if any excess tax has been paid in the financial year, you can claim the excess paid tax as a refund. After the ITR gets processed, given the IT department accepts your refund claim, the claimed refund amount gets credited back to your bank account via Electronic Clearance Service (ECS) transfer.
7. How does electronic verification of the income tax return filing works?
The income tax return filing will not get treated as valid without verification. You can either choose to verify your income tax return filing physically or electronically. In case of physical verification, print the acknowledgment of your income tax return filing (ITR-V), sign it in blue ink, and send it to the Centralized Processing Centre (Bangalore) within 120 days of your income tax return filing.
File Your ITR On Time
Most individuals think that if their salaries are below the taxable bracket, income tax return filing is not for them. Well, that is not accurate. Timely income tax return filing is mandatory if you want to claim tax refunds, avail tax deductions like term insurance premium (under Section 80C of the Income Tax Act, 1961) and to claim exemptions on eligible long-term capital gains.
Remember, timely income tax return filing is both hassle-free and beneficial. So, don't wait for the clock to strike twelve – ensure that you keep income tax return filing last date in mind to file your ITR without the burden of paying any penalty for late filing of your income tax return..