Income Tax Return

An Income Tax Return (ITR) is a mandatory annual declaration filed by individuals and businesses with the Income Tax Department of India. It details all income earned from various sources (like salary, business, property, capital gains, and other sources) during a specific financial year.

By submitting an ITR, taxpayers comply with legal requirements, establish proof of income for financial dealings, and facilitate the accurate assessment of their tax obligations to the government.

Income Tax Return (ITR) Filing is the process of reporting income earned during a financial year to the Income Tax Department of India. It includes details of income, taxes paid, deductions claimed, and tax payable or refund due.

ITR filing is a legal requirement for eligible taxpayers and an important financial practice for individuals and businesses.

You should file an ITR in India if:

Mandatory cases

Your total annual income is above the basic exemption limit
You want to claim a tax refund
You have foreign income/assets
You deposited ₹1 crore+ in bank accounts
You spent ₹2 lakh+ on foreign travel
You paid high electricity bills (₹1 lakh+)
Voluntary filing (even if income is low)
For college admissions, scholarships
For loans (education/home loan)
To build financial record

Income Tax Return (ITR) Slabs – India

Income Tax in India is calculated based on income slabs, which define the tax rate applicable to different income ranges. Taxpayers can choose between the New Tax Regime and the Old Tax Regime while filing their Income Tax Return (ITR).

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New Tax Regime (Default Regime)

The New Tax Regime offers lower tax rates with limited deductions and exemptions.

Income Tax Slabs – New Regime

Annual Income

Tax Rate

Up to ₹3,00,000
Nil

₹3,00,001 – ₹6,00,000
5%

₹6,00,001 – ₹9,00,000
10%

₹9,00,001 – ₹12,00,000
15%

₹12,00,001 – ₹15,00,00
20%

Above ₹15,00,000
30%

✅ Standard deduction available for salaried taxpayers

✅ Simple and transparent tax structure

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Old Tax Regime

The Old Tax Regime allows taxpayers to reduce taxable income by claiming various deductions and exemptions.

Income Tax Slabs – Old Regime

Annual Income

Tax Rate
Up to ₹2,50,000
Nil

₹2,50,001 – ₹5,00,000
5%

₹5,00,001 – ₹10,00,000
20%

Above ₹10,00,000
30%

✅ Deductions allowed under:

· Section 80C (PF, LIC, Tuition Fees, etc.)
· Section 80D (Health Insurance)
· House Rent Allowance (HRA)
. Other applicable exemptions

Selecting the right ITR form is a critical step in how to file an income tax return. Choosing an incorrect form can lead to your return being treated as defective.

Form Name
Applicable To
Types of Income Covered

Exclusions

ITR-1 (SAHAJ)

Salaried Individuals, Pensioners, and Residents (Income ≤ Rs. 50 lakh).
Salary or Pension Income, Income from one house property (excluding losses brought forward), Income from other sources (e.g., savings account interest), Agricultural income up to Rs. 5,000.
Capital gains, Business or professional income, Foreign assets.

ITR-2

Individuals and Hindu Undivided Families (HUFs) with income other than business or profession.
Salary or Pension Income, Income from more than one house property, Capital gains (short-term/long-term, including Section 112A), Income from other sources (e.g., lottery, foreign dividends), Income from foreign assets.
Income from profits and gains of business or profession.

ITR-3

Individuals and HUFs with business income.
Income from proprietorship business, Professional income (e.g., doctors, lawyers), Income from partnership firm, Salary, house property, capital gains, and other sources.
None (Comprehensive form for all income streams, including business income).

ITR-4 (SUGAM)

Small Businesses and Professionals under Presumptive Taxation Schemes.
Resident individuals, HUFs, and firms (excluding LLPs), Income under Section 44AD, 44ADA, or 44AE (presumptive taxation schemes).
Income exceeding Rs. 50 lakh, Detailed accounting requirements (as income is presumed).

ITR-5

Firms, LLPs, AOPs, BOIs, AJPs, Co-operative Societies, and Local Authorities.
Applicable to entities like firms, LLPs, co-operative societies, etc.
Not applicable for individuals, HUFs, or companies claiming exemptions under Section 11 of the Act.

ITR-6

Companies (excluding those claiming exemption under Section 11).
Companies.
Companies claiming exemptions under Section 11 (e.g., income from property held for charitable purposes).

ITR-7

Persons (including companies) required to file under specific sections of the Income Tax Act
Charitable or religious trusts (Section 139(4A)), Political parties (Section 139(4B)), Scientific research institutions, universities (Section 139(4C)), Educational institutions (Section 139(4D)).
None (Specific to entities required under the sections mentioned).

Having these documents ready will significantly speed up your income tax return filing process.

1. Your PAN Card and Aadhaar Card: Your PAN card is a unique tax ID, essential for all financial transactions and e-filing of income tax returns. Your Aadhaar card is now mandatory to link with PAN for tax filing, ensuring streamlined verification. Both are fundamental for accurate submissions.

2. Form 16 from Your Employer: For salaried individuals, Form 16 is crucial for income tax return filing. Issued by your employer, it details TDS (Tax Deducted at Source) from your salary and provides a breakup of salary components and declared deductions (Part A & B). If you changed jobs, get one from each employer.

3. Bank Statements and Interest Certificates: These are vital for accurate income tax return filing. They help report all interest income from savings accounts, FDs, and RDs, even if eligible for deduction. They also assist in identifying high-value transactions and reconciling tax refunds.

4. Proof of Investments for Deductions (80C, 80D, etc.): To claim tax deductions, you need proof of investments and expenditures. For Section 80C, gather receipts for PPF, ELSS, life insurance, home loan principal, and children's tuition fees. For Section 80D, keep health insurance premium receipts. These documents reduce your taxable income.

5. Form 26AS: Your Annual Tax Statement Form 26AS is an indispensable annual tax statement for income tax return filing. It shows all TDS/TCS, advance tax, self-assessment tax paid, and refunds received linked to your PAN. Reconciling it with your records ensures accuracy. It's now complemented by the Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) for a comprehensive financial view.