The deadline for filing IT return is drawing close. Many wait till the last moment to finish the exercise, but that is not advisable. Find out the different categories of ITR forms that taxpayers fill
For individuals who are not subject to audit, the income-tax return filing deadline for the financial year 2020-21 was extended by three months from September 30 to December 31. It was first extended from the usual deadline of July 31 because of glitches in the new income tax portal developed by Infosys. Taxpayers also have the option to choose between the old and new income tax regimes while filing the return. Those who choose the new regime will not be able to claim certain deductions such as the standard deduction, house rent allowance and those under Section 80C and 80D. It is also important to select the right ITR form based on your sources of income and residential status. For instance, ITR-1 can only be used by a resident individual having an income of up to Rs 50 lakh from salary or pension, income from one house property and income from other sources. Those with income from capital gains, regardless of the amount, have to file ITR-2. Taxpayers who have income from more than one house property as well as foreign income will also fill this form. ITR 3 and 4 is for taxpayers with income from business or profession, or those who opted for presumptive taxation. To make the task of filing easier and faster for taxpayers, the government this year introduced the Annual Information Statement, which provides comprehensive information to people on their financial transactions.
The AIS contains more information than the existing Form 26AS. The taxpayer can import the information contained in the AIS directly to his or her ITR form through the pre-filled facility. Tax filers need to see if the information contained in Form 26AS matches with the information in the Annual Information Statement (AIS) and in Form 16 issued by employers. Form 26AS includes details about tax deducted at source (TDS), tax collected at source (TCS), advance tax paid, self-assessment tax paid, and financial transactions exceeding certain prescribed threshold limits. This time, the form will also include remittances received from overseas, interest on income tax refund, dividend from mutual funds, purchase of MFs, among others. Taking excess tax credit while filing the return could lead to a notice from the Income Tax Department. Further, if a person files the ITR after December 31, he or she will face a penalty of Rs 5,000. For taxpayers who total income does not exceed Rs 5 lakh, the maximum late filing fee will be Rs 1,000. If a taxpayer also misses the March 31, 2022, deadline for filing belated ITR, they can file the return only in response to a notice from the income tax department.