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ITR efiling: Know about Which ITR Should I File?, Types of ITR and how to FIle ITR for FY 2019-20

Income Tax Return filing: CBDT (Central Board of Direct Taxes ) has extended the last date for filing ITR for AY 2019-20 (FY 2018-19) till September 30th.

1. What is ITR

The Income Tax Return or ITR is a form in which the taxpayers submit information about their income and tax payments to the income tax department. A taxpayer should file ITR on or before the due date specified. The ITR form applicable to a taxpayer is dependent on the type of taxpayer, whether individuals, HUF, company, etc., the nature of income and total income. Every taxpayer should also calculate the tax payable and make payments before filing the ITR.

2. Types of ITR

The department prescribes seven types of ITR forms based on the type of taxpayer and income:

  1. ITR-1 for individuals resident in India and with total income up to Rs 50 lakh.
  2. ITR-2 for individuals and HUF for their income other than income from business or profession.
  3. ITR-3 for individuals to report their income from a business or a profession.
  4. ITR-4 for individuals, HUF and partnership firms for their income under presumptive scheme of taxation.
  5. ITR-5 for partnership firms, LLP, AOP and BOI.
  6. ITR-6 for companies.
  7. ITR-7 for companies, associations and trusts claiming tax exemption.

3. How to file ITR

You can e-file your ITR for the FY 2019-20 corresponding to the AY 2020-21. The filing should be mandatorily online for all types of taxpayers except super senior citizens aged 80 years and above.

The income you report falls under income from salary, house property, business, or profession, capital gains and income from other sources You calculate the aggregate income and claim tax deductions for tax savings and others. From the income tax payable, you reduce TDS on your income, TCS, advance tax and other tax credits. You can claim a tax refund of excess tax or TDS paid. In a case where you have balance tax payable, you should pay the same before filing the ITR.

FAQ

  • My income is already subject to TDS, do I need to pay further tax while filing ITR?
    The TDS on the income may differ from the actual tax liability on the income earned. In general, TDS rates are a fixed percentage of the payments, while your income gets taxed at slab rates. In case the TDS is lower, you may need to pay the balance tax due. In case the TDS is high, you may claim a refund. In any case, while filing your ITR, you should aggregate the annual income from all sources and calculate the tax due/claim refund.
  • Are there any interest liabilities on the tax due calculated on my annual income?
    In a case where your tax payable before claiming TDS exceeds Rs 10,000, you may have an interest liability. The interest liability is 1% per month calculated on the balance tax. You can reduce the interest liability by an early payment of tax dues. You need to pay the balance tax along with any interest dues before filing the ITR.
    You can avoid the interest liability by planning your tax payments under ‘advance tax’ within the financial year.
  • What is the due date for filing ITR for AY 2020-21?
    The due date to file ITR for AY 2020-21 is 30 November 2020. The usual due date stands extended due to the outbreak of the pandemic COVID-19. However, in case you have balance tax payable above Rs 1 lakh, you should pay by 31 July 2020. A failure to pay by that date makes you liable for penal interest at 1% per month. The penal interest is in addition to interest liabilities if any on your tax payable.
  • How can I claim a rebate on tax and a refund of TDS?
    In case your total income after claiming tax deductions and exemptions is up to Rs 5 lakh, you can claim a rebate on the tax payable. The maximum rebate is Rs 12,500. In such a case, you can claim a refund of the TDS paid on your income.
  • 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 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 the future years. Do note that you should file ITR on or before the due date.
  • What is the late fee for filing ITR after the due date?
    The late fee is Rs 5,000 for a return filing after the due date but before 31 December 2020. For the AY 2020-21, a late fee of Rs 5,000 is payable for a return filing from 1 December 2020 to 31 December 2020. The late fee is Rs 10,000 for a return filing from 1 January 2021 to 31 March 2021.
    However, the late filing fee shall not exceed Rs 1,000 if the total income of a taxpayer does not exceed Rs 5 lakh.