What is Income tax return (ITR)

What is Income tax return (ITR)

What is the meaning of ITR?

 The Income Tax Return (ITR) is a document that must be submitted to the Income Tax Department of India. It comprises information on a person’s earnings and the taxes that must be paid on those earnings throughout the year. The information in an ITR must be for a certain financial year, which begins on April 1st and ends on March 31st of the following year.

Income can be generated in a variety of forms:

  • Salary income
  • Business and profession profits and gains
  • Rental property revenue
  • Income from capital gains
  • Other sources of income include dividends, interest on deposits, royaltes, lottery winnings and so on.

The ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6 and ITR-7 are the seven types of ITR forms required by the IRS, and their applicability is determined by the nature and quantity of income as well as the type of taxpayer.

Documents required for filing ITR:

 The income tax return (ITR) forms for FY 2018-19 have been released by the government. This means you can begin gathering the papers you will need to file your ITR for the fiscal year 2018-19. Although you have until July 31 to file your return, having all of the necessay documents on hand ahead of time will make the process go more smoothly.

Here are the documents you will need and things you will need to do before filing your ITR for the current fiscal year. Before completing your ITR for FY 2018-19, you will need to gather the following papers and complete the following tasks. Keep in mind that salaried individuals often file their returns using ITR-1 or ITR-2, both of which are now available on the e-filing website.

  • Form-16

If you are a paid employee, this is one of the most crucial documents you will need to file your ITR. form-6 is a TDS certificate supplied to you by your employer to provide details of the pay aid to you and TDS deducted on it, if there is any. If your employer has deducted TDS from your salary, your employer is required to issue Form16. You can ask your employer to provide you with TDS if it is not taken from your salary.

The tax department’s ITR-1 for FY 2018-19 is in sync with the Form-16. This means you only need to copy and paste the same information from the Form-16 to the ITR. Last year, the ITR-1 was out of sync with the Form-16, so taxpayers had to rely on their paycheck slips to get the information they needed.

Part-A and Part-B are the two parts of Form-16. Part-A contains all of the information about the taxes deducted by your employer during the year. Apart from the tax collected from your income, it also contains information about your Permanent Account Number (PAN), your employer’s PAN, and your employer’s TAN, whereas Part-B of the form contains information about your gross salary break up, such as exempt allowances, perquisites and so on.

The government recently updated the Form-16 format, which shows a detailed breakdown of the tax exempt allowances paid to employees as well as tax breaks claimed by them through their employers.

Your Form-16 will also show a standard deduction of Rs 40,000 this year. In addition, any transportation allowance or medical allowance or reimbursement you receive for FY 2018-19 will be taxable in your hands.

  • Interest certificates from banks and post office

This year’s ITR forms also require taxpayers to identify the source of their interest income, which might include interest collected on savings accounts, fixed deposits or any other source of income.

Any discrepancy or incorrectly claimed deduction would be easily deducted by the income tax department. As a result, you must be cautious while filing out these fields on your ITR. To determine the total interest earned, one must get interest certificates from a bank, a post office branch or any other financial organization.

If you do not receive interest certificates, check sure your account passbook is up to date and includes details about the interest that has been credited to your account till March 31.

  • Form-16 A/ Form-16 B/ Form-16 C

 If TDS is deducted on payments other than salaries, such a interest from fixed deposits, recurring deposits and so on and the amount of TDS deducted exceeds the specified limits under current tax laws, your bank (in case of fixed deposits) will issue you Form-16A, detailing the amount of TDS deducted.

On the other hand, if you sell your home, the buyer will provide you Form-16B, which will reflect the TDS deducted from the amount paid to you.

If you are a landlord who earns rental income, you should ask your renter to give you with form-16C, which will specify the TDS deducted on the rent you receive. If the monthly rent exceeds Rs 50,000 an individual is compelled to deduct TDS under current legislation. You can also look up TDS information on 26AS.

  • Form-26AS

 Your consolidated annual tax statement is Form 26AS. This is similar to your tax passbook, which contains information on all taxes deposited against your PAN. These include:

  • The deducted TDS by your employer
  • Bank’s TDS deductions
  • Any TDS withheld from payments provided to you by other organizations
  • Taxes paid in advance during the fiscal year 2018-19

The TRACES website has form 26AS available for download. Login to your account on the e filing website, www.incometaxindiaefilling.gov.in, to download your form 26AS. After logging in, go to “my account” page and select “view 26AS”. To download the form, the website will take you to the TRACES website.

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