Looking for information on individual income tax returns (ITR) filing 2021? Unlike previously, the process of filing ITR in India is easier today.

In this piece of information, we will access the benefits of filing IT returns and the complete procedure to file income tax returns in India.

Why file IT returns?

The advantages of filing IT returns are:

Visa: IT returns proofs are scrutinized by immigration centres as part of a mandatory requirement for Visa applicants.

Loans: Bank loans such as education loans, personal loans, and vehicle loans can be availed easily if IT returns of the last three years are provided to the banks or financial institutions.

Avoiding penalties: The Income Tax Department imposes a heavy fine on individuals who default on filing IT returns. Therefore, it is important for everyone to file IT returns on time to avoid legal repercussions.

Who Should File Individual Income Tax Returns?

As per the Indian Income Tax Department, the following individuals are required to file ITR every year:

• Salaried individuals whose gross income (before deductions under Section 80C to 80U) exceeds the exemption limit.
• All individuals with foreign assets, foreign income, and NRIs and tech professionals on on-site deputation.
• Individuals who have changed from one job to another are also required to file IT returns.
• Individuals who want to claim income tax refunds.
• Individuals who have received income from property under religious trusts, charitable trusts, or income from voluntary contributions.

Documents Required For Filing Income Tax Returns In India

To file income tax returns in India, the following documents are required:

-Tax deducted at source (TDS) certificates in Form 16 or 16A as applicable

-Proof of investments

-Bank statements

-Documents of purchase and/or sale of assets/investments

-A copy of PAN application and acknowledgement if you have applied for a PAN but yet to receive it

-If PAN issue application has not been made till now, a PAN application form duly filled in along with two passport size photographs

-Payment receipts of insurance premium, new equity shares, mutual fund, rent, medical expenditure, tax-saving documents, donations, etc. to support unclaimed deductions

-Tax paid challans like self-assessment tax or advance tax

Due Dates For Filing IT Returns

July 31: Individuals who are exempted from audit.

September 30: Individuals who are not exempted from audit.

March 31: All individuals filing belated returns.

What Are The Different Types Of ITR Forms?

The different types of ITR forms include:

ITR-1 (Sahaj): Individuals who earn an income from pension, salary, rent received, interest on one house property, or any other form of income up to Rs. 50 lakhs in a financial year are required to use this form.

ITR-2: Individuals whose income is not from business profits or profession in a financial year are required to use this form.-

ITR-3: Individuals whose source of income is from the profits of a profession or business in a financial year are required to use this form.

ITR-4: Individuals having pension, salary, or income from one house property as their source of income.

ITR 4S (Sugam): Individuals who have opted for the presumptive income scheme under Section 44AD and Section 44AE of the Income Tax Act, assuming the annual turnover is less than Rs. 2 crores.

How To e-file Your ITR?

You can initiate the process of e-filing your income tax return in the following steps:

1. Register yourself on the Indian income tax department’s e-filing portal.
2. Create a user ID using your PAN number and keep a scanned copy of the required documents (Form 16, Form 26AS, bank statements, IT returns of previous years, Aadhar card, etc.) ready.
3. Now, visit the e-file section and choose the “Prepare and Submit ITR Online” option. It is important to remember that only ITR 1 and 4S can be filed online by you. For all other forms, you need to manually download and print the forms, prepare the return, and then upload them.
4. Once you have downloaded the forms, you need to pre-fill the section of personal details and tax payments. For this, you need to select the “Pre-fill” option (this will include your claimed deductions, taxes to be paid, income details, etc.)
5. Select the “Calculate” option after you have entered the tax liability. Please ensure that you have cross-checked all details before submitting.
6. If taxes are owed, you need to make an immediate payment and set the tax payment amount to ‘zero’. After this, you can proceed with generating and saving the ITR data in XML format.
7. You will now need to login to the ITR department’s e-filing portal, visit e-file and choose the “Upload Return” option. If required, please upload your Digital Signature Certificate (DSC).
8. Click on the “Submit” option to submit your form.
9. If Digital Signature Certificate has not been used and the form was successfully submitted, you will notice the generation of an ITR V. Click on the provided link and then download the ITR V that will then be sent to your registered email address.
10. Take a printout of the ITR V form, sign it, and send it to the Centralized Processing Centre (Income Tax Department, Bengaluru) within 120 days of filing your returns.

Exemption of Allowances

House Rent Allowance

· Individuals can claim the least of the following as House rent allowance exemption:

· Total HRA received from the employer

· Rent paid less 10 percent of (Basic salary + Dearness Allowance)

· 40 percent of salary (Basic salary + Dearness Allowance) for non-metros and 50 percent of salary (Basic salary + Dearness Allowance) for metros

Children Allowances

An individual can claim a maximum of 100 per month as exemption or Rs. 1200 per annum; subjected to a maximum of 2 children.

Section 80C, 80CCC, and 80CCD (1)

Individuals can claim a maximum exemption of Rs. 1,50,000 on the following investments:

· Life insurance premium

· Contribution to PPF Account

· Employee Provident Fund (EPF)

· National Saving Certificate

· Fixed Deposits

· Equity Linked Savings Scheme (ELSS)

· Principal payment on home loans

· Sukanya Samriddhi Account

· Annuity/Pension Schemes

· National Pension Scheme

· Post office time deposits

Medical Expenditure and Insurance Premium (Section 80D)

Individuals can claim exemptions on medical expenses. The limit is:

· Rs 25,000 for premiums paid for self and/or family.

· Rs. 50,000 for premiums paid for parents (senior citizens).

· Rs. 5,000 for health checkups

· Rs. 50,000 on medical expenditure towards senior citizen parents or incurred by senior citizens

Interest on Home Loan (Section 80C and Section 24)

Individuals can claim exemptions up to Rs. 2 lakhs on home loan for self-occupied property. If the property has been let out, a deduction for the entire interest related to the home loan can be exempted.

Donations (Section 80G)

Donations to charitable organizations can be exempted 50–100 percent, with or without restriction.

If you need more assistance on how to file ITR in India, please feel free to visit Legalo, one of India’s most trusted names when it comes to tax, accounting, GST, ITR, business contracts, and more.