ITR filing 2025: Income Tax Return (ITR) is a formal statement filed by a taxpayer with the Income Tax Department, declaring their income, expenses, tax deductions, and the taxes paid (or payable) during a financial year. Filing an ITR in India is a crucial annual exercise for taxpayers. Here’s a breakdown of who should file, why it’s important, when to file, and how to do it:
Who should file ITR?
-Income>basic exemption limit (before deductions)
In India, generally, an ITR must be filed by:
Individuals whose gross total income exceeds the basic exemption limit. These limits vary based on age:
Under 60 years: Above Rs. 2.5 lakh
60 to 80 years (Senior Citizens): Above Rs. 3 lakh
Above 80 years (Super Senior Citizens): Above Rs. 5 lakh
These limits apply to the old tax regime. Under the new tax regime, the basic exemption limit is Rs. 3 lakh for all individuals, but you still need to file if your income exceeds this, even if your tax liability is zero due to the rebate under Section 87A.
Companies and Firms: Regardless of profit or loss, all companies and firms (including LLPs) must file an ITR.
Individuals who wish to claim a tax refund: Even if your income is below the exemption limit but you have paid excess tax (e.g., through TDS), you need to file an ITR to claim the refund.
Individuals who want to carry forward losses: If you have incurred losses from certain sources (like business, capital gains, or house property), filing an ITR on time allows you to carry forward these losses to offset against future income, reducing your tax liability in subsequent years.
Individuals with financial assets outside India: If you are a resident Indian and own any asset or have signing authority in any account located outside India, you must file an ITR, irrespective of your income.
Individuals meeting specific criteria (even if income is below the exemption limit):
-Deposited more than Rs. 1 crore in a current bank account.
-Deposited Rs. 50 lakh or more in one or more savings bank accounts.
-Spent over Rs. 2 lakh on foreign travel.
Incurred electricity expenses exceeding Rs 1 lakh.
TDS or TCS (Tax Collected at Source) is over Rs 25,000 (Rs 50,000 for senior citizens) in the previous year.
Business turnover over Rs 60 lakh.
Professional income over Rs 10 lakh.
Certain other entities: This includes trusts (charitable or religious), political parties, universities, research institutions, mutual funds, etc.
Why to file ITR?
Filing your ITR is not just a legal obligation but also offers several benefits:
- It ensures you comply with the Income Tax Act, avoiding penalties and legal consequences for non-filing or late filing.
- Your ITR serves as an official document proving your income, financial health, and tax payment history. This is often required for:
- Loan applications: Home loans, car loans, personal loans.
- Visa applications: Many foreign consulates require ITRs for visa processing.
- Buying insurance policies.
- Renting a property.
- Participating in government tenders.
- Claiming Refunds: If you have paid excess tax (e.g., through TDS), filing ITR allows you to claim the refund.
- Carrying Forward Losses: As mentioned, it’s essential to carry forward business or capital losses to offset them against future income.
- Avoiding Penalties: Late filing or non-filing can attract penalties (e.g., up to Rs. 5,000 or Rs. 10,000 depending on income, with a lower penalty of Rs. 1,000 for income below Rs. 5 lakh).
- Faster Loan Approvals: Banks and financial institutions often require ITRs for the past few years to assess your repayment capacity, making loan approvals smoother.
- Building Financial Track Record: Regular filing helps in establishing a strong financial track record, which is beneficial for various financial transactions.
- Applying for Government Schemes/Subsidies: Some government schemes or subsidies may require proof of income through ITR.
- Financial Planning: The process of gathering documents and calculating income for ITR filing helps you keep track of your finances, investments, and expenses, promoting better financial planning.
When to file ITR?
The deadline for filing ITR varies based on the category of the taxpayer and whether an audit is required.
For the Financial Year 2024-25 (Assessment Year 2025-26), the key due dates are:
July 31, 2025: For individuals, Hindu Undivided Families (HUFs), Association of Persons (AOPs), Body of Individuals (BOIs), and other non-audit cases (e.g., most salaried individuals, freelancers, and professionals not subject to tax audit).
October 31, 2025: For businesses requiring a tax audit.
November 30, 2025: For businesses requiring a transfer pricing report (in case of international or specified domestic transactions).
Belated Return: If you miss the original due date, you can file a “belated return” by December 31, 2025, for FY 2024-25 (AY 2025-26), usually with a late filing fee.
Revised Return: If you made a mistake in your original ITR, you can file a “revised return” by December 31, 2025, for FY 2024-25 (AY 2025-26).
Updated Return (ITR-U): From April 1, 2025, you can file an “updated return” (ITR-U) within 48 months from the end of the relevant assessment year, even if you missed the belated return deadline. However, this comes with an additional tax liability (25% to 70% of tax and interest).
How to file ITR?
The process of filing ITR is largely online in India, via the Income Tax Department’s e-filing portal.
Steps to File ITR Online (General Process):
Gather Required Documents:
PAN (Permanent Account Number)
Aadhaar Card
Form 16 (for salaried individuals, from employer)
Form 16A (for TDS from other incomes like interest)
Form 26AS (Tax Credit Statement, reflecting all TDS/TCS against your PAN)
AIS (Annual Information Statement) and TIS (Taxpayer Information Summary) – available on the e-filing portal.
Bank statements (savings account, fixed deposits)
Investment proofs (for deductions under Section 80C, 80D, etc.)
Details of income from other sources (e.g., interest, rental income)
Capital Gains statements (if any)
Loan statements (for home loan interest, education loan interest)
Determine the Correct ITR Form: The Income Tax Department has various ITR forms (ITR-1, ITR-2, ITR-3, ITR-4, etc.) depending on your income sources, total income, and taxpayer category. The e-filing portal often helps you select the correct form.
ITR-1 (Sahaj): For Resident Individuals having total income up to Rs. 50 Lakh, with income from salary, one house property, family pension income, agricultural income (up to Rs. 5000), and other sources (interest income etc.).
ITR-2: For individuals and HUFs not having income from business or profession, but with capital gains, more than one house property, foreign income/assets, etc.
ITR-3: For individuals and HUFs having income from business or profession.
ITR-4 (Sugam): For Resident Individuals, HUFs, and Firms (other than LLP) having total income up to Rs. 50 Lakh and having income from business and profession computed under presumptive taxation.
Login to the e-Filing Portal: Go to the official Income Tax Department website (incometax.gov.in). Log in using your PAN/Aadhaar as User ID and password. If you’re a new user, register first.
Select “File Income Tax Return”: On your dashboard, navigate to e-File > Income Tax Returns > File Income Tax Return.
Select Assessment Year and Mode of Filing: Choose the relevant assessment year (e.g., AY 2025-26 for FY 2024-25). Select “Online” as the mode of filing.
Select Your Status: Choose your applicable status (Individual, HUF, etc.).
Choose ITR Form: Select the appropriate ITR form based on your income sources.
Fill in Details: The portal will often pre-fill much of your personal information, salary details (from Form 16), TDS details (from Form 26AS). Review these carefully. Enter details for all your income sources, deductions (like Section 80C, 80D), exemptions, and taxes paid.
Calculate Tax Liability: The system will automatically calculate your tax liability or refund amount.
Preview and Confirm: Review all the entered information for accuracy. Ensure there are no discrepancies.
Pay Tax (if applicable): If there is a tax payable, make the payment online.
Submit and E-Verify: After submitting the return, the final and crucial step is to e-verify it. This must be done within 30 days of filing. There are several methods for e-verification:
Aadhaar OTP
Net Banking
Electronic Verification Code (EVC) through pre-validated bank account/Demat account
Sending a physical copy of ITR-V (acknowledgment) to CPC, Bengaluru (less common now).
By following these steps, you can successfully file your Income Tax Return in India and ensure compliance with tax regulations.
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