Different Types of Return Forms
The Income Tax Return (ITR) is a form that taxpayers use to report information about their earned income and taxes to the income tax department. Seven different forms have been announced by the Income Tax department: ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, and ITR 7. Every taxpayer is required to register or submit their ITR on or before the deadline. Depending on the taxpayer's income sources, different ITR forms are applicable. Additionally, the amount of the income received and the taxpayer's application type—for example, HUF, individual, firm, etc.
What Are the Benefits of Filing Income Tax Returns?
Here are a few benefits of filing income tax returns:
- Make Tax Deduction Claims
The requirement of tax deductions is one of the income tax return's most important benefits. There are numerous techniques to lessen your overall tax obligation or payment. You can request a refund for the additional income tax you repaid in the form of TDS after making such tax-saving investments by filing tax returns.
- Processing Loans
In addition to helping the country, filing income taxes has a number of benefits for the individual as well. For instance, you will be required to provide income documentation, such as your income tax return, if you wish to apply for a loan such as a personal loan or home loan. In the majority of states, a lender will demand that you provide ITR for at least 3 years
- Nation Building
One of the primary sources of revenue for the government is taxes. The money deposited in the bank is used for infrastructure development and other activities that benefit society. The government uses the tax revenue to fund infrastructure, security, healthcare, education, and a number of public programmes.
- Absolute Investments
The IT department is involved with high-value costs like buying a home. These events can be documented and completed in accordance with your income when you pay taxes and file records.
- The Address Proof
The fact that the tax assessment records serve as address proof is another significant benefit of income tax. You need to provide address proofs for a number of documents, including visa applications, license applications, passport applications, and Aadhar card applications, among others. Typical proofs, like ID cards, are typically ineffective for these documents.
Requirements for Income Tax Returns
The following documents are required in order to file IT returns online:
- Forms 16A, 16B, and 16C
- Form 26AS
- PAN card
- Salary pay slips
- Bank statements
- Proof of interest credited or debited on an account documents
- Tax saving investment proof.
Types of Income Tax Returns
Refer to the table given below for the types of income tax returns:
| ITR Form Name | Applicability |
|---|---|
| ITR-1 or Sahaj | The form must be used by individuals who make an annual income of less than Rs.50 lakh via pension or salary and from only one house property. |
| ITR-2 | The form must be used by shareholders of private companies, Directors of Companies, Non-Resident Indians (NRIs), or individuals who make an income via capital gains, from two or more house properties, and from foreign sources. However, the income of the individual must be more than Rs.50 lakh. |
| ITR-3 | Form for the people who run a proprietorship or run a professional business |
| ITR-4 or Sugam | Individuals under the presumptive taxation scheme must use this form. In order for individuals to join the scheme, they must earn less than ₹50 lakh from professional income or less than ₹2 crores from business income. |
| ITR-5 | This form must be utilised by any association of people, Limited Liability Partnerships (LLPs), and partnership businesses who need to disclose their earnings and tax calculations. |
| ITR-6 | Indian companies must use this form |
| ITR-7 | This form must be used by organisations claiming an exemption like universities, colleges, scientific research institutions, political parties, or religious or charitable trusts. |
Why Vakilsearch
At Vakilsearch, we have a large network of the best legal minds who can assist you with all the legal procedures. We manage all the documentation so that your dealings with the government run as smoothly as possible. In order for you to set reasonable expectations, we will also provide you with a comprehensive explanation of the procedure.
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