Every Individual/HUF whose total income during any previous year exceeds the maximum amount which is not chargeable to tax i.e. INR 2.50 Lakh shall file income tax return on or before 31st day of July, 2022. Income tax return for a previous year is filed in the subsequent year i.e. Assessment Year (AY). Income tax return for the income earned during previous year 2021-22 is to be filed on or before 31st July 2022 by the Individuals/HUF not falling under following categories:
Filing of income tax return has several benefits to Individuals even if their earnings are below basic exemption limit, such as:
- Copy of ITR works as an ID proof and Income proof before various authorities.
- Claiming of income tax refunds in respect of TDS deducted during the previous year even if total income does not exceed basic exemption limit. Where assessee could not file form 15G/15H with banking company/post office in which fixed deposits were held by the assessee, or where he/she was in receipt of professional fee or commission, rent income during the financial year which was in excess of the threshold specified under law for deduction of TDS, it is beneficial to file income tax return, claim expenses incurred in respect of such income and claim refund of the TDS deducted during the previous year.
- Losses incurred under any head of income (i.e. house property, business losses, losses on sale of capital asset) can be carried forward to the subsequent years by filing income tax return timely and can be set-off with income of that year. Losses of the previous year are carried forward only if return of income is filed before due date. Set-off of losses brought forward may reduce tax liability significantly in the subsequent AYs.
- Income tax returns are the primary document as a proof of income at the time of applying for loan from any financial institution/bank. Proper record of income tax returns filed for previous years helps in smooth processing of loan application.
- Income tax return is an important document at the time of application of Visa for the purpose of business/work or studies abroad before immigration authorities as income tax return filed for preceding previous years indicate that the tax laws have been complied with by the person and no tax liability has been escaped.
- It is important to avoid any unwanted disputes and notices from the department of income tax. Also, it is a good practice to be a responsible citizen and report your income to the department which helps to improve the accuracy of the government database as to income of the citizens of the country.
Delay in filing of income tax return will attract following repercussions:
- Penalty for late filing of income tax return is as follows:
|Upto INR 5 Lakh
|More than INR 5 Lakh
- Losses of the previous year cannot be carried forward to the subsequent years, if the return of income is not filed within the due date.
- Refund due in the income tax return in respect of the TDS deducted or advance tax paid shall be delayed.
- Form ITR 1 (Sahaj) is applicable for a resident individual having total income from Salary/Pension, One house property, other sources (Interest, family pension, dividend etc.), agricultural income up-to INR 5000/-
- As per a press release of the income tax department, out of total income tax return filed for the AY 2021-22 48% of those were ITR 1.
- Today, Income tax portal has more than 10 crores registered users and more than 1.80 crores registered users have filed their income tax return for the Assessment year 2022-23.
ITR-1 cannot be used by a person who:
is a Director in a company
has held any unlisted equity shares at any time during the previous year
has any asset (including financial interest in any entity) located outside India
has signing authority in any account located outside India
has income from any source outside India
is a person in whose case tax has been deducted u/s 194N
is a person in whose case payment or deduction of tax has been deferred on ESOP
who has any brought forward loss or loss to be carried forward under any head of income
In addition to the above, a person is mandatorily required to file income tax return even if his/her total income during any previous year does not exceed basic exemption limit, if any of the following conditions are satisfied:
Who has incurred any expenditure of an amount exceeding INR 2 Lakh during the previous year for himself or any other person for travel to a foreign country or
who has incurred an expenditure of an amount or aggregate of the amount exceeding INR 1 Lakh towards consumption of electricity during the previous year or
Who has deposited an amount or aggregate of the amounts exceeding INR 1 crore in one or more current accounts maintained with a bank/co-operative bank.
If any assets or beneficial interest in any asset located outside India is held or has any signing authority in any account located outside India
As the due date for filing of income tax return is approaching soon, Areness is providing expert services in filing of income tax return for the AY 2022-23 free of cost to following category of Individuals/HUFs:
- Individual having income from salary
- Individual having income from profession where total proceeds from profession do not exceed INR 10 Lakh.
- Individuals having income from salary and one house property
- Individual having income from business where assessee has maintained books of accounts and is not liable to get its accounts audited
- Individuals having income from other sources, freelancing.
- Individual covered in more than one of the above categories.