Income News: Annual Tax Season in India: Key Details for Filing Income Tax Returns

Income Tax: As the annual tax season kicks off in India, it’s crucial to stay informed about filing your income tax returns (ITR). Here’s everything you need to know, including the deadline, penalties for missing the deadline, common mistakes to avoid, and more.

When Is The Last Day To File ITR?

The last date for filing income tax returns for FY23-24 (Assessment Year 2024-25) is July 31, 2024. That is the end of this month.

What If You Miss The Deadline?

Taxpayers who miss the July 31 deadline can still file a delayed return by December 31, 2024, for FY23-24 / AY24-25.

What is the Penalty for Missing the Deadline?

While you are allowed to file a delayed ITR until the end of the year, these filings will attract penalties ranging between ₹1,000 and ₹10,000, depending on the duration of the delay. Additionally, the more you delay your ITR filing, the more likely you are to miss out on certain deductions for lower tax and face increased scrutiny from the Income Tax Department.

Who is Required to File ITR?

• Income Threshold: You are required to file your ITR if your total income before deductions exceeds the basic exemption limit.
• Foreign Assets: Residents of India must file ITR if they own any asset outside India as a beneficial owner, have an interest in any asset outside India, or are an authorized signatory for any account maintained outside India.
• Investments in Foreign Entities: You must file your ITR if you have invested in shares, bonds, or mutual fund schemes of foreign companies or have Employee Stock Options (ESOPS).
• High Expenditures: Filing is mandatory if you have paid electricity charges over ₹1 lakh, spent more than ₹2 lakh on foreign travel, or have bank deposits exceeding ₹50 lakh in savings accounts or ₹1 crore in current accounts.
• Business Income: Individuals must file ITR if the value of all their sales from business exceeds ₹60 lakh.

What Are the Correct ITR Forms to Fill?

The Income Tax Department released the online and offline ITR forms for FY24 in April. Here’s a guide to choosing the correct form:

• ITR-1 Form: For individuals with income from salary, one house property, and other sources.
• ITR-2 Form: For individuals and Hindu Undivided Families (HUFs) without business income.
• ITR-3 Form: For individuals and HUFs with income from business or profession.
• ITR-4 Form: For presumptive income from business or profession.

Filing your ITR correctly and on time is crucial to avoid penalties and ensure compliance with the tax regulations. Make sure to choose the appropriate form based on your income sources and other criteria. Stay informed and file timely to avoid any complications during this tax season.

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