What is a income tax return ?
It is a prescribed form through which the particulars of income earned by a person through various sources(like salary, business, professional fees, interest, capital gains, etc.) in a financial year and taxes paid on such income is communicated to the Income tax department after the end of the Financial year, called as income tax return or ITR. It is like your report card in school but instead of marks you have income and taxes. It is the constitutional obligation of every person earning income to compute his income and pay taxes correctly. Different forms are prescribed for filing of returns for different Status and Nature of income .
What is efiling ?
Efiling or electronic filing is submitting your income tax returns online. There are two ways to file your income tax returns. The traditional way is the offline way where you go the Income Tax Department’s office to physically file your returns. The other way is when you efile through the internet. Over the past few years, efiling has become popular because it is easier, doesn’t require prints of documents and can be done for free.
What are advantages of e-Filing?
- Anywhere, Anytime files, 24 x7 x 365 service.
- Easy, fast,free and secure
- Faster processing and quicker refunds.
- Value added services like viewing Form 26AS, tracking of refunds,email, SMS alerts regarding status of processing and refunds.
- And now it is also compulsory for most.
Is E-filing of Income tax Return compulsory?
- E-Filing Returns is compulsory for:
Individuals earning over Rs 5 lakh a year. They are required to file their tax returns in the electronic format from AY 2013-14 (FY 2012-13) and subsequent assessment years.
- Individual/HUF, having total Income of Rupees 10 lakhs. It was made mandatory from AY 2012-2013((FY 2011-12) and subsequent assessment years.
- Individual/HUF /Firm auditable under section 44B of the IT Act, 1961. It was made mandatory for AY 2012-2013 and subsequent assessment years.
- All Companies
Difference between AY and FY
Financial Year is period between 1st April to 31st March. Assessment Year is the next year in which the income is liable to tax.
For example, if your financial year is from 1 April 2017 to 31 March 2018, then it is known as FY 2017-18. The assessment year for income earned during this period would begin after the financial year ends–that is on 1 April 2018 till 31 March 2019.