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Comprehensive Guide on Income Tax Return and E-Filing
19 Jul 2019
Description

The term Income Tax Return is a type of form wherein an assessee is required to reveal information regarding annual income, deductions and tax payments to the Income Tax Department. The name ‘Income Tax Filing denotes the process of ITR filing’. Overall income tax you are bound to the Government is determined upon filing.

If in case, additional tax were paid in a financial year, the Income Tax Department would instantly refund the money to the account holder. If there are any dues, it has to be paid immediately and later proceed to ITR filing.

Some of the various Income Tax Forms are as follows:

  • ITR-1
  • ITR-2
  • ITR-3
  • ITR-4
  • ITR-5
  • ITR-6
  • ITR-7

The forms mentioned above might need disclosures like Profit and Loss Statement, Balance Sheet.

What is the purpose behind filing ITR?

It does not matter whether you are Indian or a Non-resident Indian (NRI), filing ITR is mandatory if annual income exceeds more than 2.5 lakhs. There is no harm in filing an income tax return even in circumstances where yearly salary does not cross the threshold. It is one of the essential documents to be produced while applying for a home loan. Financial capacity of the borrower can be gauged.

Those people who are planning to visit overseas to pursue higher studies or scouting for a job should file ITR of three years consecutively. Concerned personnel who are dealing with Visa application request you to present ITR documents to determine the financial stability. Moreover, it is a confirmation that he/she can support themselves while residing abroad.

What is meant by the term E-filing?

E-filing is the process of submitting income tax returns online. Income tax returns can be filed in two ways:

  • Offline way:

You need to visit the Income Tax Department directly to file returns.

  • Online mode:

It is executed via E-filing. For the past few decades, Efiling has gained popularity since it does not require printed documents.

Some of the advantages of E-filing are as follows:

  • E-filing ensures quick processing of refund returns when compared to a paper filed returns.
  • E-filing can be accessed twenty-four hours a day. Customers do have the option file both federal and state tax returns.
  • Another benefit of E-filing is that it furnishes a proof of receipt verifying acceptance of returns
  • E-filing is a user-friendly tool that provides comprehensive details on how to take advantage of it.
  • Chances of flaws are minimum since the software can track mistakes.
  • E-filing guarantees optimum security as opposed to mailing tax returns.
  • You can rest assure hassle-free experience with E-filing due to the absence of postage fees and W-2 statements.
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