Income Tax Return Filing Guide for Individuals: ITR Forms and Process

Filing income tax returns is a crucial annual obligation for taxpayers in India. This comprehensive guide will help you understand the process, choose the right ITR form, and file your returns correctly.

Why File Income Tax Returns?

Legal Compliance

• Mandatory if income exceeds basic exemption limit
• Avoid penalties and legal issues
• Comply with tax laws

Financial Benefits

• Claim tax refunds
• Carry forward losses
• Lower TDS deductions in future

Documentation Benefits

• Proof of income for loans
• Visa applications
• Government tenders
• Subsidy applications

Other Benefits

• Faster loan approvals
• Higher credit card limits
• Business credibility
• Peace of mind

Who Must File ITR?

Mandatory Filing

Income Criteria:

• Individual below 60 years: Above ₹2,50,000
• Senior citizen (60-80 years): Above ₹3,00,000
• Super senior citizen (above 80): Above ₹5,00,000

Other Mandatory Cases:

• Deposited more than ₹1 crore in bank accounts
• Incurred expenditure of more than ₹2 lakhs on foreign travel
• Electricity bill exceeds ₹1 lakh in a year
• Income from assets located outside India
• Signing authority in foreign accounts
• Director in a company
• Holding unlisted equity shares

Voluntary Filing

Even if income is below threshold, you should file if:

• TDS has been deducted
• Want to claim refund
• Need income proof
• Want to carry forward losses

ITR Forms: Which One to Use?

ITR-1 (SAHAJ)

Who Can Use:

• Resident individuals
• Income up to ₹50 lakhs
• Income from salary, one house property, other sources

Who Cannot Use:

• Business or professional income
• Capital gains
• More than one house property
• Agricultural income above ₹5,000
• Director in a company

Best For: Salaried employees with simple income structure

ITR-2

Who Can Use:

• Individuals and HUFs
• Income from salary, house property, capital gains, other sources
• No business or professional income

Who Cannot Use:

• Business or professional income
• Partnership firm income

Best For: Salaried individuals with capital gains or multiple properties

ITR-3

Who Can Use:

• Individuals and HUFs with business/professional income
• Partners in partnership firms

Best For: Professionals, consultants, freelancers, business owners

ITR-4 (SUGAM)

Who Can Use:

• Resident individuals, HUFs, and firms (not LLP)
• Presumptive income under Section 44AD, 44ADA, 44AE
• Total income up to ₹50 lakhs

Best For: Small businesses opting for presumptive taxation

Documents Required for ITR Filing

Basic Documents

• PAN card
• Aadhaar card
• Bank account details (for refund)
• Bank statements (all accounts)

Income Documents

For Salaried Individuals:

• Form 16 from employer
• Form 16A (if TDS on other income)
• Salary slips
• Form 12BA (pension income)

For Business/Professional Income:

• Books of accounts
• Profit and loss statement
• Balance sheet
• Presumptive income computation

For House Property:

• Rental income details
• Home loan interest certificate
• Municipal tax receipts
• Property tax receipts

For Capital Gains:

• Sale deed
• Purchase deed
• Brokerage statements
• Mutual fund statements

Investment Proofs (For Deductions)

Section 80C:

• LIC premium receipts
• PPF statements
• ELSS statements
• NSC certificates
• Home loan principal certificate
• Tuition fee receipts

Section 80D:

• Health insurance premium receipts
• Preventive health check-up bills

Other Deductions:

• Home loan interest certificate (Section 24)
• NPS statements (Section 80CCD(1B))
• Education loan interest certificate (Section 80E)
• Donation receipts (Section 80G)

TDS Documents

• Form 26AS (Annual Tax Statement)
• TDS certificates (Form 16, 16A)
• AIS (Annual Information Statement)

Step-by-Step ITR Filing Process

Step 1: Gather Documents

• Collect all income and investment documents
• Download Form 26AS from Income Tax portal
• Check AIS for all income sources

Step 2: Choose ITR Form

• Determine applicable ITR form based on income sources
• Download utility or use online filing

Step 3: Register/Login to Income Tax Portal

• Visit www.incometax.gov.in
• Login with PAN and password
• Verify Aadhaar OTP

Step 4: Download Pre-filled Data

• Download pre-filled XML
• Verify salary, TDS, and other details
• Make corrections if needed

Step 5: Fill ITR Form

Personal Information:

• Name, PAN, Aadhaar
• Address, contact details
• Bank account for refund

Income Details:

• Salary income (from Form 16)
• House property income
• Capital gains
• Other sources

Deductions:

• Section 80C investments
• Section 80D health insurance
• Other applicable deductions

Tax Computation:

• Calculate total income
• Apply deductions
• Compute tax liability
• Adjust TDS and advance tax

Step 6: Verify Calculations

• Check all figures
• Verify TDS matches Form 26AS
• Ensure all income is reported
• Review tax computation

Step 7: Pay Tax (If Applicable)

• Calculate balance tax payable
• Pay through Challan 280
• Note BSR code and challan details

Step 8: Submit Return

• Generate XML file
• Upload on Income Tax portal
• Submit digitally signed or with EVC

Step 9: Verify Return

Methods:

• Aadhaar OTP (instant)
• Net banking (instant)
• Demat account (instant)
• Bank account (instant)
• Send signed ITR-V to CPC Bangalore (within 30 days)

Step 10: Receive Acknowledgment

• Download acknowledgment
• Note acknowledgment number
• Check processing status after 2-3 weeks

Common Mistakes to Avoid

1. Wrong ITR Form

• Using ITR-1 when ITR-2 is required
• Not checking eligibility criteria

2. Incomplete Information

• Missing income sources
• Not reporting exempt income
• Incorrect bank details

3. TDS Mismatch

• Not matching with Form 26AS
• Missing TDS entries
• Wrong TDS amounts

4. Calculation Errors

• Wrong tax computation
• Incorrect deduction claims
• Mathematical errors

5. Not Verifying Return

• Missing 30-day verification deadline
• Using wrong verification method

6. Missing Deadlines

• Filing after due date
• Not paying self-assessment tax

7. Not Reporting All Income

• Missing interest income
• Not reporting capital gains
• Hiding foreign income

ITR Filing Deadlines

For Individuals (Non-Audit Cases)

• Original Return: July 31
• Belated Return: December 31
• Revised Return: December 31

For Audit Cases

• Original Return: October 31
• Belated Return: December 31
• Revised Return: December 31

Penalties for Late Filing

• Up to ₹5,000 if filed after due date
• ₹1,000 if total income below ₹5 lakhs
• Interest on unpaid tax: 1% per month

Tax Refund Process

When You Get Refund

• Excess TDS deducted
• Advance tax paid more than liability
• Self-assessment tax paid in excess

Refund Timeline

• Usually processed within 2-3 months
• Directly credited to bank account
• Interest paid if delayed beyond 3 months

Checking Refund Status

• Login to Income Tax portal
• Check "Refund Status"
• Track through acknowledgment number

New Tax Regime vs Old Tax Regime

Choosing the Right Regime

Calculate Tax Under Both:

• Use online calculators
• Compare final tax liability
• Consider deductions available

Choose Old Regime If:

• You have significant deductions
• Home loan interest
• High 80C investments
• Multiple deductions available

Choose New Regime If:

• Minimal investments
• No home loan
• Prefer simplicity
• Lower income levels

Special Cases

First-Time Filers

• Register on Income Tax portal
• Verify Aadhaar
• Start with simple ITR-1 if eligible
• Seek professional help if needed

NRIs

• Use ITR-2 or ITR-3
• Report foreign income
• Claim DTAA benefits
• Maintain foreign asset details

Senior Citizens

• Higher basic exemption
• Additional 80D deduction
• Interest income benefits
• Simplified filing process

Freelancers and Consultants

• Use ITR-3 or ITR-4
• Maintain books of accounts
• Claim business expenses
• Consider presumptive taxation

Income Tax Portal Features

e-Filing

• Online return filing
• Pre-filled data
• Instant verification
• Acknowledgment download

Form 26AS

• View TDS details
• Check advance tax
• Verify refunds
• Annual tax statement

AIS (Annual Information Statement)

• Comprehensive income information
• All financial transactions
• TDS details
• High-value transactions

Compliance Check

• Outstanding demands
• Pending returns
• Verification status
• Refund status

Professional Help vs Self-Filing

Self-Filing Suitable For:

• Simple salary income
• Basic deductions
• No business income
• Tech-savvy individuals

Professional Help Needed For:

• Business income
• Capital gains
• Multiple income sources
• Complex deductions
• Audit cases
• Foreign income

Post-Filing Actions

1. Save Documents

• Keep ITR acknowledgment
• Save all supporting documents
• Maintain for 6 years

2. Track Processing

• Check processing status online
• Respond to notices promptly
• Verify refund credit

3. Plan for Next Year

• Start tax planning early
• Maintain proper records
• Make timely investments

How Namratha & Co. Can Help

Our ITR filing services include:

• ITR form selection guidance
• Complete return preparation
• Document verification
• Tax computation and optimization
• Online filing and verification
• Refund tracking
• Notice handling
• Year-round tax advisory

Conclusion

Filing income tax returns doesn't have to be complicated. With proper documentation, understanding of the right ITR form, and systematic approach, you can file your returns accurately and on time. Whether you choose to file yourself or seek professional help, ensure compliance to avoid penalties and enjoy the benefits of timely filing.

Remember, ITR filing is not just about compliance—it's about maintaining a clean financial record that helps you in various aspects of life, from loan applications to visa processing.

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Need help with ITR filing? Contact Namratha & Co. for expert assistance and hassle-free tax return filing services.