It is mandatory for all individuals to file Income Tax Return (ITR) where his total income exceeds the maximum amount that is not chargeable to Tax ie, if it exceeds Rs.2,50,000 in the FY 2018-19. This limit is Rs 3,00,000 for senior citizens ( who are more than 60 years old but less than 80 years old) and Rs 5,00,000 for super senior citizens (who are more than 80 years old). In the case of partnership firms, return needs to be filed even if there is no taxable income. Due date of filing income tax return for the FY 2018-19(AY 2019-20) is 31st July 2019 for individuals and firms who are not subject to audit under section 44AB of the IT Act.
Different forms for return of income are prescribed for filing IT returns for different status and nature of income.
Types of taxable income
- Salaries and perquisites
- Income from house property (Ex: Rental income)
- Income from Business or Profession
- Capital gain on sale of assets/shares
- Income from other sources (Ex: Interest earned on bank deposits)
- Life insurance premium paid
- Contribution to PPF or EPF
- Children’s tuition fee
- The medical insurance premium paid
- Subscription to Mutual Funds. (ELSS)
- Contribution to Pension Funds including pension scheme of Central Government. (NPS)
- Investment in listed equity shares. (for first time investors)
- 5-year post office time deposit
- Subscription to notified securities/notified deposits scheme
- Medical expenses of a handicapped dependent relative.
- Interest paid on loan taken for higher education.
- Interest and principal repayment on loan taken for residential house property
- Salaried individuals who live in a rented house/apartment can claim house rent allowance or HRA
- Donations to approved charitable trusts/institutions, scientific research and rural development, etc
- Contributions to political parties.
- Special benefits available for government employees
Benefits of filing your tax returns in time
- Copy of ITR is required at the time of loan application
- Eligibility to carry forward capital losses (short-term or long-term), which can help to plan and reduce tax liability in the subsequent years
- Visa processing –ITR of last 3 years is a mandatory requirement prescribed under the visa application requirements of many countries
- Life insurance companies, ask for ITR receipts for high life covers
- Government tender- ITR of last five years are required to be submitted while applying for a government tender
- Self-employed – ITR receipts acts as a proof of income source. Filing of tax on time, always adds to the credibility of the assessee
- Credit for the tax deducted from you can be claimed through timely filing of ITR which results either in tax refund or reduces the tax liability by the amount already deducted.
- ITR can be a sufficient proof for source of income , when a major expense is incurred over assets, events etc