What is IT Return Filing?
ITR filing is an annual event applicable for all types of taxpayers whether it is a company, LLP or Individual. The income is taxed differently based on type of tax payer. Any individual who is doing any business, trading or providing any services such as consulting, training, website developments and have a taxable income above basic threshold limit i.e. Rs 2.5 lakhs mandatorily need to file income tax return online on income-tax department’s portal annually.
|Type of Taxpayer||Due date|
|Company||31st October 2020|
|LLP and Partnership Firm||30th November 2020|
|Proprietor and Individual||30th November 2020|
Filing of income tax return is a self assessment method wherein the taxpayer needs to make a computation of taxable income earned during the previous year and the income tax payable thereon. Before filing the return, the due tax must be paid. The tax can be paid online or through challan 280 by depositing in bank with cheque or cash.
The government mandates that individuals who earn a specified amount of annual income must file a tax return within a pre-determined due date. Filing returns is a sign that you are responsible. Not just that, it also makes it easier for individuals and businesses to enter into subsequent transactions since their income is recorded by the tax department with applicable tax, if any, having been paid.
If you apply for any loans such as a home loan, car loan, etc., the eligibility and quantum of loan would depend on your income. This can be established through filed ITRs. ITR will help your lender to assess your repayment capacity. If you plan to travel overseas, proof of earning is required. If you are salaried then a certificate from the employer will work. But if you are self-employed then income proof & details need to be submitted.