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Home  » Get Ahead » 7 Facts About Filing Income Tax Returns

7 Facts About Filing Income Tax Returns

By REDIFFGURU MIHIR TANNA
Last updated on: July 25, 2023 12:30 IST
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RediffGURU Mihir Tanna broadly lists the ITRs to be filled by individuals having income from salary, house property, capital gain, business and other sources.

Illustration: Dominic Xavier/Rediff.com
 

Selecting correct income tax form is important to disclose required details as per provisions of Income Tax Act. If the correct income tax form is not selected, the ITR filer will not be able to submit certain details which are applicable and necessary for completing the process of filing tax return.

Questions arise in the mind about the consequences of ignoring specific instructions while filing Income Tax Return

Well, the Income Tax Department considers wrongly filed ITRs as defective ITRs and penalty can be levied if it results into misreporting or under reporting of income.

1. Broadly, ITR 1 is applicable to a person who is resident and ordinary resident, having income from salary/pension/one house property/other sources.

2. However, a salaried person who is a director or who holds shares of unlisted companies will be required to submit details in ITR 2 and not ITR 1.

Also when salaried person is filing ITR 2, salary schedule of ITR 2 will ask for more details related to salary which are not asked in ITR 1.

3. Similarly, a salaried person earning income of more than Rs 50 lakh is required to submit details of specified personal assets and liabilities which can be filled in ITR 2 and not in ITR 1.

4. Also, a person who has income from salary/pension/one house property/interest income but wants to carry forward losses or who wants to claim TDS credit of other person (e.g.in case of clubbing of income), ITR 2 is required to be filed.

5. A person earning income from capital gains is required to file ITR 2. However, if a person is a trader or has income from intraday trading, then that income is chargeable under the head business income and ITR 3/ITR 4 will be applicable.

6. Further, a person earning income from business or profession has the option of opting for presumptive taxation, provided turnover is within limit as prescribed in the Income Tax Act. Accordingly, such a person can opt for presumptive taxation and will have to file the ITR 4.

7. However, like exception to ITR 1, ITR 4 is also not applicable if a person is not resident and ordinary resident, director of a company, or has held unlisted shares, and whose income is more than Rs 50 lakh etc.

To summarise: every person should read the instructions for filing Income Tax Return correctly and select the ITR form applicable to them.

 

If you have any questions regarding filing your I-T returns, do ask rediffGURUs.

Meet the rediffGURU tax experts.

Mihir TannaMihir Tanna has more than 10 years of experience in direct taxation, including filing income tax returns.
He regularly represents clients before the income tax authorities including the commissioner of income tax (appeal).
Ask Mihir Tanna your question HERE.

 

Hardik ParikhHardik Parikh is a chartered accountant with over 15 years of experience in taxation, accounting and finance.
He holds an MBA degree from IIM-Indore and heads his own advisory firm, Hardik Parikh Associates LLP.
Ask Hardik Parikh your question HERE.

 

Tejas ChokshiTejas Chokshi has over 20 years of experience in financial planning, income tax planning, strategic and risk advisory, banking and financial products and accounting and auditing.
He is an information system auditor, a forensic auditor and concurrent bank auditor.
Tejas has a master’s degree in management, audit and accounting from Gujarat University and has completed his CA from the Institute of Chartered Accountants of India.
Ask Tejas Chokshi your question HERE.

 

Col Sanjeev GovilaColonel Sanjeev Govila (retd) is the founder of Hum Fauji Initiatives, a financial planning company dedicated to armed forces officers and their families.
He has over 12 years of experience in financial planning and is a SEBI certified registered investment advisor; he is also accredited with AMFI and IRDA.
Ask Colonel Sanjeev Govila your question HERE.

 
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REDIFFGURU MIHIR TANNA