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Income Tax

What is an Income Tax Return (ITR)?

An Income Tax Return (ITR) is a prescribed form through which taxpayers report their annual income, claim deductions, and disclose taxes paid. The ITR enables the government to assess tax liabilities, refunds, or additional taxes due. Filing an ITR is mandatory for individuals and entities meeting specific criteria under the Income Tax Act, 1961.

Who is required to file an Income Tax Return in India?

You must file an ITR if you:

Earn income exceeding the basic exemption limit
Want to claim a tax refund
Have foreign income or assets
Receive income from capital gains, business, or profession
Are a company or firm, irrespective of income levels
Are eligible under the mandatory conditions outlined in Section 139(1) of the Income Tax Act

What are the advantages of e-filing an Income Tax Return?

E-filing offers multiple benefits, such as

Convenience: File returns online anytime
Speed: Faster processing of refunds
Accuracy: Built-in validation features minimize errors
Environmental Friendly: Paperless process
Status Tracking: Track the status of filed returns online

Can an ITR be revised after submission?

Yes, if you discover errors or omissions in a filed ITR, you can revise it under Section 139(5) of the Income Tax Act before the end of the relevant assessment year or completion of assessment, whichever is earlier.

How many times can an ITR be revised?

There is no limit on the number of revisions, provided it is done within the stipulated timeframe. However, ensure revisions are genuine as frequent amendments may raise scrutiny.

How will I receive a refund if I have paid excess tax?

Refunds are processed directly to the bank account specified in your ITR, provided it is pre-validated with the Income Tax Department. You can track the refund status via the Income Tax e-filing portal or NSDL’s refund tracking page.

Is it possible to file an ITR without a Permanent Account Number (PAN)?

No, a PAN is mandatory for filing an ITR. However, individuals can use an Aadhaar number in place of PAN, provided the two are linked.

Is linking Aadhaar with PAN mandatory for filing an ITR?

Yes, linking Aadhaar with PAN is mandatory under Section 139AA. Without this linkage, you cannot file an ITR unless exempted under specific provisions.

What changes have been made to the ITR forms after the introduction of Section 89A?

Section 89A addresses taxation on income from specified foreign retirement funds. Taxpayers must disclose such incomes and the tax treatment under this provision in the applicable ITR schedules.

Do I need to file an ITR if my income is below the taxable threshold?

Filing is optional if your income is below the exemption limit unless:

You wish to claim a tax refund.
You have foreign assets or income.
You fulfill conditions like deposit thresholds, electricity consumption, or high-value transactions.

What should I do if there are discrepancies between my actual TDS and the TDS credit shown in Form 26AS?

Contact the deductor to verify and correct discrepancies. If the issue persists, you can file a complaint with the Income Tax Department through the TRACES portal.

What happens if errors are found in a filed ITR?

You can correct errors by revising the return before the assessment year ends. Significant errors, if left uncorrected, could lead to penalties, interest, or scrutiny.

Can I file an ITR if I have investments in foreign assets?

Yes, disclosure of foreign assets is mandatory in Schedule FA. Non-compliance can lead to penalties under the Black Money Act.

What are the consequences of failing to file an ITR?

Failure to file may lead to:

Penalties under Section 234F.
Interest under Section 234A.
Loss of opportunity to carry forward certain losses.
Scrutiny or legal action in severe cases.

Are holdings of equity shares in Co-operative Banks or Credit Societies, which are unlisted, required to be reported?

Yes, report unlisted equity shares in the 'Unlisted Equity Shares' column in applicable ITR schedules.

If I am a resident who sold land and buildings situated outside India, do I need to report the details of the property and the buyer in Schedule CG?

Yes, provide complete details of the property, including buyer identification and sale proceeds, in Schedule CG.

In ITR-6, is an unlisted company required to report details of assets held as stock-in-trade in Schedule AL-1?

No, assets held as stock-in-trade are not required in Schedule AL-1. Only non-business assets need to be disclosed.

Does a Farmer Producer Company need to report shareholding details in Schedule SH-1 of ITR-6?

Yes, all companies, including Farmer Producer Companies, must disclose shareholding details in Schedule SH-1.

How can I track the status of my filed ITR?

You can track ITR status online through the Income Tax e-filing portal or by using the acknowledgement number on NSDL’s refund tracking tool.

Are there any special tax benefits available for senior citizens?

Yes, benefits include:

Higher exemption limits.
No Advance Tax liability for seniors without business income.
Deductions under Sections 80D and 80TTB.

Can an Authorized Signatory or Representative Assessee e-verify an ITR on behalf of the taxpayer?

Yes, an authorized representative can e-verify using their Digital Signature Certificate (DSC).

How can I confirm that my e-verification is complete?

Once e-verification is successful, the Income Tax portal shows an acknowledgement, and the status changes to 'Verified.'

Are senior citizens exempt from filing an ITR?

Senior citizens are exempt only if their income is below the taxable limit and they do not fulfill specific mandatory filing conditions.

What should I do if my Self-Assessment/Advance Tax payments do not reflect in Form 26AS?

Submit a rectification request with the challan details on the TRACES portal or contact your assessing officer.

What actions can be taken if there is a tax credit mismatch in a filed ITR?

Rectify the mismatch by filing a revised ITR or contacting the deductor for corrections in their TDS filings.

How does the residential status of a taxpayer impact the taxability of their income?

Residential status determines the scope of taxable income. Residents are taxed on global income, while non-residents are taxed only on income sourced in India.

How is the residential status of a HUF determined for income tax purposes?

A HUF’s residential status depends on the location of control and management of its affairs.

Which types of income are taxable in India?

Income from salaries, house property, business or profession, capital gains, and other sources is taxable under specific provisions.

How should a non-resident report the absence of a Taxpayer Identification Number (TIN)?

Non-residents must declare 'Not Applicable' in the TIN column and attach a residence certificate from the foreign jurisdiction.

How should a foreign company director without a PAN report directorship in the ITR?

They must indicate 'No PAN' in the directorship column and provide supporting details.

If I sold land and earned capital gains, is it mandatory to mention the date and sale details in the ITR forms?

Yes, provide complete transaction details, including the sale date and proceeds, in Schedule CG.

How should the 'cost of acquisition' and 'sale consideration' be reported for unlisted equity shares transferred via special methods?

Use the method outlined in Section 49, reporting values based on the transfer method.

Do I need to report unlisted foreign company shares again under 'Unlisted Equity Shares'?

Yes, this ensures compliance across schedules.

If I sold property to a non-resident, is it mandatory to report the buyer's PAN in Schedule CG?

Yes, mention the buyer's PAN or other details in Schedule CG.

Is it mandatory to provide ISIN details for LTCG calculations?

Yes, for scrip-wise LTCG reporting, ISIN details and calculations are mandatory.

If I hold foreign assets reported in Schedule FA, do I also need to report them in Schedule AL?

Yes, if Schedule AL is applicable, report foreign assets to ensure complete disclosure.

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