Filing Income Tax Returns FY 2023-24The process of filing income tax returns (ITR) in India has become technology oriented. This article provides a high-level understanding about filing personal income tax for the financial year (FY) 2023-24, outlining the conditions and documents required.
Who is required to file ITR?
Individuals are required to file only if their total income in a financial year (April to March) exceeds the annual income. Basic exemption limit Such as if you choose the old tax regime – Rs 2.50 lakh (if age is below 60 years or non-resident), Rs 3 lakh (if age is 60 years or above but below 80 years) or Rs 5 lakh (if age is 80 years or above). If you choose the default new tax regime, the basic exemption limit is Rs 3 lakh.
There are certain additional conditions under which a person is required to file ITR even if his income falls within the basic exemption limit. An illustrative list is as follows:
- Residents and Ordinarily Residents (ROR) who hold foreign assets or have signing authority on a foreign account.
- Making deposits of Rs 1 crore or more in the aggregate in one or more current bank accounts or Rs 50 lakh or more in one or more savings bank accounts
- Expenditure of Rs 2 lakh or more on foreign travel (for self or any other person)
- Expenses of Rs 1 lakh or more on electricity bill
- Tax deduction/collection at source (TDS/TCS) is Rs 25,000 or more (Rs 50,000 for senior citizen)
Also, if there is any TDS/TCS, and you do not have ITR Filing As per the requirement, you need to file ITR to claim tax refund. Similarly, if you need to claim losses to carry forward to future years, you may need to file ITR.
Also Read | Income Tax Expectations Budget 2024: Tax exemption limit on savings account interest to be raised to Rs 25,000?
Illustrative myths
myth: ITR is not required if only interest income is received from banks and/or TDS has already been deducted.
fact: If any of the prescribed conditions for filing ITR are fulfilled then you should file ITR even if you have received only interest income and/or TDS has already been deducted. There is relief only in case of specified senior citizens who have pension income and bank interest income, provided the specified conditions are fulfilled.
myth: I am a ROR with income less than Rs 2.5 lakh (and no TDS/loss) and have invested in foreign equities. I am not required to file ITR.
fact: Filing ITR is mandatory if your assets are outside India.
myth: Gifts are completely tax free
fact: Gifts received from a non-relative whose value exceeds Rs 50,000 may also be taxed.
Also Read | Form 16 for ITR filing: Top points to check in Form 16 before filing your income tax return for FY 2023-24
ITR filing: Which documents to keep with you?
Below is an illustrative checklist that can help you with the filing process:
- PAN and Aadhaar: Linking of both is mandatory (except for notified exceptions).
Form 16 Issued by the employer, indicating details of salary paid and the corresponding TDS- Form 16A/16B/16C: Income and TDS details on income other than salary
- Form 26AS: Consolidated annual tax deduction/collection details as reflected in income tax records
- Annual Information Statement (AIS) and Taxpayer Information Summary (TIS):
These statements provide a comprehensive view of the information submitted by various reporting entities (banks, investment brokers, etc.) and reflected in the income tax records. The tax department has also launched a mobile app “AIS for Taxpayers” to download these forms.
- Bank statements: To report interest income and verify other financial transactions.
- Investment Proof: Documents supporting deductions under section 80C, 80D, 80G etc.
- Home loan details: To claim interest and principal repayment benefits.
Which ITR form to file?
It is also important to file ITR in the correct form. For example, if you are a resident individual (without foreign assets) having salary, pension, one house property, interest and total income less than Rs 50 lakh, you must file ITR-1 (SAHAJ). ITR-2 can be filed by individuals who are not covered under ITR-1 and do not have business/professional income.
What are the consequences of late application?
The last date to file for FY 2023-24 is 31st July 2024 (for non-tax audit cases). Here are some of the consequences of late filing:
- Additional interest liability due to delay
- Fee: Rs 1,000/ Rs 5,000 (depending on income)
- No carry forward of business or capital losses allowed
- The option to opt out of the new tax regime has been abolished.
Also Read | Income Tax Return Filing: Is it mandatory to file ITR if income does not exceed Rs 7 lakh?
conclusion
Early bird licks: Do not wait till the last moment to file your ITR to avoid any problems or correct any errors.
A watchful eye: If your income profile is complex or you have doubts, seek professional help.
Finalize: After you e-file your ITR, ensure it is successfully verified within 30 days.
(The author is National Leader, Global Mobility Services – Tax, KPMG, India)
