Income Tax Return

An Income Tax Return (ITR) is a crucial form that must be electronically filled and submitted to the Income Tax Department. This form requires you to detail your income and taxes, including payments made or deductions received. The ITR forms, such as ITR-1, ITR-2, ITR-3, ITR-4, etc., cater to different categories of taxpayers, and we handle this classification for you.

It's essential to file your tax returns annually by the specified due date to avoid penalties and notices from the Income Tax Department. If you've overpaid taxes, you may be eligible for an Income Tax Refund, subject to the department's calculations. Failure to file returns can result in penalties and accumulated interest on unpaid taxes. We ensure compliance with all tax regulations and deadlines, allowing you to navigate tax obligations seamlessly with Jimap Consultancy by your side!

How Income Tax Returns Filing (ITR) Works?

Overview on Income Tax

Income Tax

There are two primary tax structures in India: Direct Tax and Indirect Tax.

Direct tax is calculated and paid directly on your income, including tax on salary, capital gains, business income, etc. Income tax falls under the direct tax.

Indirect tax, now mostly covered under Goods and Services Tax (GST), is charged indirectly on purchases of goods or services.

Every resident or non-resident of India earning income within the country is subject to income tax based on specific limits and exemptions. Income sources may include salary, interest from savings, income from mutual funds, property or business sales, or professional income. Income tax rates are predetermined at the start of the year in the Union Budget or through departmental notifications. The tax paid or deducted on these incomes is known as income tax.

Some benefits of Filing Income Tax Returns in India. Shortly termed as ITR Filing.

Tax Deducted at Source (TDS) is a form of direct tax and serves as a primary method for the Indian government to collect taxes. Whenever a business transaction occurs, TDS is deducted at the point when money is credited to the payee's account or at the time of payment.

When making payments such as salaries or conducting business transactions, TDS is deducted at a fixed percentage and this deducted amount is then deposited to the Income Tax Department. This process ensures that a portion of the tax is automatically paid to the government. TDS rates typically range from 1% to 30%.

In addition to depositing the TDS amount, the deductor is required to file TDS returns—a quarterly statement submitted to the Income Tax Department of India. Timely submission of TDS returns is mandatory for deductors.

The TDS return needs to be filed through 4 return forms as given below.

Overview of Tax Return Filings Corporate

Below is the list of ITR forms applicable for businesses

Overview of Income TAX Return Filings for Individuals

Overview on Tax Planning

Tax planning is an essential financial strategy aimed at minimizing tax liabilities by leveraging exemptions and investments permitted under the Income Tax Act. It's a crucial component of every individual's financial plan, ensuring efficient use of available resources.

Many individuals struggle with financial liquidity due to inadequate spending tracking. Proper planning of earnings and expenditures, including tax considerations, can significantly enhance cash flow and liquidity efficiency. Tax planning involves optimizing financial forecasts to reduce tax liability through lawful means like investments in tax-saving FDs and mutual funds under Section 80C.

Understanding key terms:

• Tax Planning: Reducing tax liability by utilizing permissible exemptions and investments.

• Tax Avoidance: Exploiting legal provisions to reduce tax liabilities, often through strategic financial arrangements.

• Tax Evasion: Illegally avoiding tax payments through fraudulent or deceptive practices.

• Tax Management: Ensuring timely compliance with tax regulations to avoid penalties and fees.

• Effective tax planning not only reduces tax burdens but also facilitates sound financial management and compliance with legal requirements.

Below is the list of ITR forms applicable for Individuals

Filing corporate tax returns involves several essential steps to ensure compliance with tax regulations at various levels. First, it's important to determine the type of corporation, such as a C Corporation, S Corporation, or LLC, as this will dictate specific tax obligations and forms required. Corporations need to gather comprehensive financial information, including income statements, balance sheets, and cash flow statements.

The primary forms to be filed are Form 1120 for C Corporations and Form 1120S for S Corporations. Additionally, businesses must identify and apply allowable deductions and tax credits, such as business expenses and various tax credits like R&D and investment credits. Corporations also need to make estimated quarterly tax payments based on expected income to avoid penalties.

Deadlines are critical, with April 15th for C Corporations and March 15th for S Corporations, although extensions are available. It's also necessary to file state and local tax returns as required by different jurisdictions. The IRS encourages electronic filing for accuracy and efficiency.

Filing individual income tax returns involves several key steps to ensure compliance with tax laws and to maximize potential refunds or minimize taxes owed. First, determine your filing status, which could be single, married filing jointly, married filing separately, head of household, or qualifying widow(er) with a dependent child. Next, gather all necessary documents, including income statements such as W-2s and 1099s, as well as records for deductions and credits like mortgage interest, student loan interest, medical expenses, charitable contributions, and education expenses. Personal information such as Social Security numbers for yourself, your spouse, and any dependents is also needed.

Choosing the appropriate tax form is essential, with Form 1040 being the standard, Form 1040-SR for seniors, and various schedules for additional income and deductions. You must decide between taking the standard deduction or itemizing deductions, whichever results in a lower taxable income. Important tax credits to consider include the Earned Income Tax Credit (EITC), Child Tax Credit, and education credits.

Calculate your taxable income by subtracting deductions and credits from your total income, then determine your tax liability using tax tables or tax software. File your return by the typical deadline of April 15th, though extensions are available by filing Form 4868. Filing can be done on paper or electronically.

Pay any taxes owed through direct debit, credit card, check, or payment plans, or receive your refund via direct deposit, paper check, or savings bonds. If errors are discovered after filing, an amended return can be submitted using Form 1040-X. Maintain copies of your tax return and all supporting documents for at least three years.

Using tax software or hiring a tax professional can simplify the filing process and ensure accuracy. Regularly reviewing your financial situation throughout the year can help optimize tax benefits and ensure compliance with tax laws.

Frequently asked questions

How do I deposit TDS in the bank?

You can make TDS payments conveniently online via net banking on NSDL by selecting Challan 281. It's essential to complete TDS payments before filing the TDS return. E-payment is mandatory for corporate assesses and non-corporate assesses subject to audit. Simplify your tax compliance with hassle-free online payments.

Can I claim the benefit of travelling expenses made on a business trip in ITR?

Yes, you can. You need to have all the proofs of expenses like tickets, hotel charges, etc.

Is it mandatory to file a NIL TDS return in case there is no TDS for the quarter?

Yes, it is mandatory to file a NIL TDS return even if there is no TDS deducted or deposited during the quarter. Filing a NIL return ensures compliance with tax regulations and informs the tax authorities that no TDS liability exists for that period.

How can you get a TDS refund?

You will need to file your income tax return in the appropriate ITR applicable for you to get a refund of TDS in case there is scope.

Should Form 16 A be given to an employee whose TDS has never been deducted?

Considering that Form 16A is a TDS certificate for income sources other than one’s salary, it would not be generated in the case of an individual whose TDS has never been deducted.

If I have closed my business, will I also need to file an ITR return?

If you have closed your business in the current financial year then yes you will have to file for ITR returns for this current financial year. Along with the other filings such as ROC etc. and then you will have to surrender the PAN of the company.

Which ITR form should be used for income from a salary and online retailing business?

You've got Income from business, so you can only file ITR 3 or ITR 4. Generally, the advice is to file ITR 4, since it allows presumptive taxation under Section 44AD. But if you've got capital gains or losses, you can't file ITR 4. Also, if your turnover is above the audit limit, you can't file ITR 4.

Do partners have to file their individual ITR even if the firm files its ITR? If yes, which ITR form is to be filed by the partners?

Yes, partners have to file their returns. The ITR-3 form applies to a taxpayer who is a partner in a partnership firm and earning salary/ payment, interest, and profits from the firm. The due date for filing the ITR of a working partner of a firm whose accounts are required to be audited is 30th September.

How can salaried individuals file their ITR without Form 16?

You cannot file Tax returns without Form-16. Form-16 contains the TAN of the Employer. Even if you file returns taking all 12 Pay Slips as Base - still the Return will not be processed till the relevant return of Employer’s TAN is available with Tax Authorities. Form-16 may be issued by the Employer till Dec. Even if you resign mid-FY, Form-16 is issued. Almost all Employers use Software for Salary processing - where Form-16 is auto-released. Check with your Employer.

How do I file ITR being a non-salaried individual?

If you are a non-salaried individual and have an income of more than 2.5 Lakhs in a financial year. Then we will have to look into your sources of income, then we will be able to guide you and help you with your Income Tax Return Filings.

I have a GST number but no business income for a full year. Should I file ITR 2 or ITR 3?

Having a GST number has got nothing to do with filing an I-T return. A return of Income is required to be filed when there is any taxable income. If you have any income other than business income (as you have said that you have no business income). You may file a return in Form ITR-1 or ITR-2 depending upon the source of your income.

How to pay income tax online?

You have to pay your taxes before filing your tax return. If you are a salaried individual. Then most of your tax liability is deducted from your salary by your employer in the form of TDS and paid to the government on your behalf. In case you are liable to pay advance tax, then you have to pay 90% of it before the 31st of March every financial year. You can file your ITR once the financial year ends.

Should I file an ITR in the case of a loss from business or house property or sale of shares?

Yes, you should file an ITR in case of losses, which may be from business or the sale of shares or interest paid on a home loan. An ITR filing helps you to set off the loss and also carry forward the loss to future years. Do note that you should file ITR on or before the due date.