Income Tax Return (ITR) Filing - Overview

An income tax return, or ITR, as it is commonly called, is a document filed by a taxpayer with the Income Tax Department of India. ITR reflects your contribution directly to public services and infrastructure. This contains all the information you need about your income sources, deductions & exemptions, tax liabilities, and filing information.

e-filing of income tax returns is mandatory for registered companies, individuals, HUFs, or other professionals. Based on the type of taxpayer, there are multiple income tax return forms filed. Every taxpayer should complete their ITR filing within the deadline to avoid penalties.

Total Income of a Person Mainly Comprises 5 Heads i.e., Salary, House Property, Capital Gain, Busines & Profession, Income from Others Sources

Advantages of Income Tax Returns (ITR ) Filing

• Compliance with Laws
• ITR Returns Can Act as a Verified Income Statement
• Effective for Easy Loan Processing
• Easy to Claim Tax Refunds
• Avoid Legal Consequences

Individual/Proprietorship

Process of Income Tax Return Filing

Filing your income tax returns online is a complex process. Errors during income tax return filing may result in multiple issues. Vakilsearch provides a one-stop solution for filing out your income tax returns online. We have a team of tax experts who can complete your ITR filing in India in just three easy steps:

• Consult our tax Experts
  Get in touch with our tax experts to resolve all your queries. Our inhouse CA will provide you with tailor-made advice to save on taxes
• Provide all the Required Documentation
  As per the requirement to submit all the income statements and documentation of investment proves to our team.
• Get your ITR Filed
  Based on the scenario, our team will choose the apt ITR forms and file them on your behalf on time.

Documents Required to File Income Tax Return File

Along with other forms, the following documents should be provided to file your income tax returns online:

Eligibility Criteria for Income Tax Returns (ITR ) Filing

• Individuals or companies that fall under the following criteria should file IT returns in India:
• Salaried individuals whose gross income exceeds the threshold level before considering deductions under Section 80c and Section 80u should file ITR returns
• Entities like private limited companies and limited liability partnerships, irrespective of profit or loss, should file ITR returns
• Individual directors or partners holding positions in private limited companies or limited liability partnerships should file income tax returns online
• Individuals earning dividends from multiple sources like mutual funds, equity, fixed deposits, interests, and bonds should file their ITR online Individuals sourcing income from charity, religious trust, or other forms of voluntary contributions should file IT returns
• Businesses and individuals who are eligible for tax refunds should definitely file their income tax returns online
• Non-resident Indians should file an income tax return based on their incomes.

Checklist for Income Tax Returns (ITR ) Filing

• Here is a detailed checklist for filing ITR returns
• Make sure to have all your personal information, like your name, address, contact details, and PAN
• Find out the appropriate income tax return forms
• Select the proper forms and collect all the income details
• Keep proofs of all the deductions and exemptions
• Take note of the information on TDS returns, capital gains, and foreign assets and incomes
• In the case of a firm or registered company, make sure to have all the financial statements, audit reports, TDS compliances, and other related party transactions.
• Have proof of all the annual compliances in hand.

Why Should You File ITR?

• As per the income tax laws, every citizen who is earning income should file an income tax return if their total income exceeds the basic threshold. Online ITR return filing helps you carry forward the losses in the present year to the next financial year.
• Filing ITR returns online creates a valid proof of income. It is mandatory for applying for any loans in the future; filing ITR returns is required for applying for credit cards in the future. It is valid proof when it comes to visa applications.

Mandatory E-filing for Individuals

Filing income tax return in India is mandatory for individuals under the following circumstances:

• Individuals below 60 years whose gross total income exits ₹2.5 lakh
• Individuals above 60 years but below 80 years who's gross total income exit ₹3 lakh
• Individuals above 80 years who's gross total income exceeds ₹5 lakh
• Apart from this if the income falls within these sources one must file and it are return online
• Individuals having deposits over ₹1 crore in the current bank Account
• Deposits over ₹50 lakhs and savings bank account Individuals who spent over ₹2 lakh on foreign travel
• Electricity expenses more than ₹1 lakh
• TCS or TDS over ₹25000
• Business turnover above ₹60 Lakhs
• Professional income over ₹10 lakh

ITR Last Date and Penalty

Last Date for e-filing Income Tax Return

Generally one can file ITR returns after the financial year ends. The online income tax return filing deadline is July 31, of the applicable assessment year.

Penalty for Late Filing of ITR

If the income tax returns are not filed on time it may incur late filing fees and interest. Here is a complete outline of the same:

• If the income tax return is not filed within the due date one might have to pay a late filing penalty of ₹5000
• If the overall income is less than ₹5 lakhs then the penalty amount is further reduced to ₹1000
• Under Section 234a one percent interest collected per month is part of the month for the unpaid Tax amount.

Types of ITR Forms and Their Applicability

In India, there are seven distinct ITR forms that each have their own requirements and eligibility criteria. Your income, the sources of your income, and whether you live in India or not will determine which ITR form you must file. Here are the different ITR forms and their eligibility criteria:

• ITR-1 (Sahaj): This form is for individuals with a total income of up to ₹50 lakhs. It is the simplest ITR form and can be filed by anyone who does not have any complex income sources
• ITR-2: This form is for individuals with a total income of more than ₹50 lakhs. It is more complex than ITR-1 and requires taxpayers to provide more details about their income and deductions
• ITR-3: This form is for individuals who have income from a business or profession. It is also used by individuals who have capital gains
• ITR-4: This form is for individuals who are salaried and have opted for the presumptive taxation scheme. This scheme allows taxpayers to pay tax at a flat rate of 5% of their turnover
• ITR-5: This form is for Hindu Undivided Families (HUFs). It requires HUFs to provide details of their members
• ITR-6: This form is for companies. It is a complex ITR form and requires companies to provide detailed information about their income, expenses, and taxes
• ITR-7: This form is for individuals who are non-residents of India.

How Suyog Advisors can Help you ?

There some of the some common mistakes which most of the individuals do during the process of filling their income tax return (ITR), such as:

• Choosing an incorrect ITR form Failure in reconciliation of Form 26AS & TDS information
• Putting in incorrect information
• Missing to report source of Income
• Missing on some Possible deductions that could be claimed

Suyog Advisors take cares of above common mistakes and helps in effective tax planning which will minimize your income tax and optimize your income. Our professionals provide one to one feedback before filling the income tax returns to tax payers and guide them for future years as well. On our dedicated watsapp no. taxpayers can post their queries and our professional provide the solutions for same.

Corporate Tax In India - An Overview

The corporate tax also known as a corporation tax is a direct tax levied on net income, Capital gains, and profits made by entities both domestic and foreign. This tax is imposed at a specific rate as per the provision of Income Tax Act of 1961. The company tax rate is based on the type of entity and revenue earned. The slab rate system outlines the corporate tax rate levied on it, and it differs for domestic and foreign companies.

Benefits of Corporate Tax Filing in India

• Can Retain the Profit For Efficient Tax Planning
• Easily Write Off the Loss
• Deductibility of Business Expenses
• Access to Better Financial Instruments
• Compliance with Laws
• ITR Returns Can Act as a Verified Income
• Statement
• Effective for Easy Loan Processing
• Easy to Claim Tax Refunds
• Avoid Legal Consequences

Process of Corporate Tax Return Filing

• 1. Consultation and Document Collection
  Begin the process with a consultation with Vakilsearch's experts, who will guide you through the required information and documents for your corporate tax return filing. Provide comprehensive financial records, and the Vakilsearch team will assist in organising the necessary data.
• 2. ITR Form Selection
  Vakilsearch's experts will determine the most appropriate Income Tax Return (ITR) form for your business based on its nature, income level, and specific activities. This personalised approach ensures accurate and efficient filing, optimising for your unique circumstances.
• 3. Efficient Form Completion and Verification
  Our team will handle the entire process of completing the selected ITR form, ensuring all sections are accurately filled. We will conduct a meticulous review to catch any errors or discrepancies. Once the form is completed, it will be verified through the necessary means, including digital signatures or physical signatures on a printed copy.
• 4. Submission and Payment Assistance
  Our team takes care of the submission of your corporate tax return through the online portal of the Income Tax Department. If there is a tax liability, the team will guide you through the process of making the payment using approved methods.

Corporate Tax Filing for Different Entity Types

Corporate Tax Filing for Proprietorship Firm

• Individuals with business income functioning as a sole proprietor or proprietorship firms
• Proprietorship forms require audits if the overall turnover is above ₹1 crore or ₹50 lakh for gross receipts during a particular financial year
• The due date for non auditor proprietorship is July 31 and for proprietorships requiring an audit it is extended until September 30. Forms ITR3 and ITR 4 Sugam should be submitted for return filing.

LLP Tax Return

• All the registered limited liability partnerships must file annual income tax returns respective of income or loss
• The limited liability partnerships should file their corporate tax on October 31 in case of any international transactions the deadline is given till November 30
• Form ITR5 has to be used for online filing.

Partnership Tax Return Filing

• All partnership firms registered and treated as separate legal entities must file annual income tax returns
• The deadline is given by October 31 in case of any international transaction it is on November 30 form ITR 5 has to be

Companies

• All Companies registered and treated as separate legal entities must file annual income tax returns
• The deadline is given by October 31 in case of any international transaction it is on November 30 form ITR 6 has to be

Current Corporate Tax Rate in India

The Indian corporate tax rate for domestic companies stands at a basic rate of 30% on total income. However, certain specified domestic companies, particularly startups, may be eligible for concessional tax rates. Here is a detailed Corporate tax rates 2024-25 in India:

Corporate Tax Rate for Domestic Companies

The Tax rate for companies for the year 2023-2024 are:

Surcharge: An additional amount of income tax will be added at the specified rate of that tax:

• 7% – Taxable income above ₹ 1 crore – Up to ₹ 10 crore
• 12% – Taxable income above ₹ 10 crore
• 10% – If the Company opts for taxability under Section 115BAA or Section 115BAB

Note: The table above outlines the Corporate Tax Rates in India for the Assessment Year (AY) 2024-2025. The rates vary based on different conditions, such as the total turnover or gross receipts, and whether the company opts for specific sections like 115BA, 115BAA, or 115BAB. Additionally, surcharge rates are specified for different income brackets, with a special rate for companies opting for taxability under Section 115BAA or Section 115BAB.

Corporate Tax Rate for Foreign Companies

For foreign companies not registered under the Indian Companies Act, 2013 with management and control situated outside India, the following tax rates apply:

Surcharge: An additional amount of income tax will be added at the specified rate of that tax:

• 2% – Taxable income above ₹ 1 crore – Up to ₹ 10 crore
• 5% – Taxable above ₹ 10 crore

Note: The table outlines the income tax rates for unregistered foreign companies in India. A 50% tax rate applies to royalty or technical service fees received under pre-approved agreements made before April 1976, while any other income is taxed at a rate of 40%. Additionally, surcharge rates are specified for different income brackets.

Corporate Tax Planning

Corporate tax planning is crucial for a business to grow at a high degree. Proper corporate tax planning allows a firm to make best use of deductions, tax exemptions and tax benefits with much lower tax liability. The primary objective of corporate tax planning is to increase the savings, reduce tax liability, make productive investments, terminate litigations and achieve overall stability in the company economy. This directly has an impact on the overall business regulations finance corporate law and the fiscal policy. The following aspects have to be taken into account while conducting a corporate tax planning.

• Claim appropriate exemptions claim deductions under various income heads
• Availability the expenses with respect to the accounts
• Capitalise your assets
• Claim deductions on depreciation and additional depreciation
• Analyse unabsorbed depreciation
• Make use of bad debts to avail tax benefits

Corporate Tax Rate in India for AY 2024 -2025

Note: The table provides information on the Corporate Tax Rate in India for the Assessment Year (AY) 2024-2025, distinguishing between companies with turnovers or gross receipts below ₹400 crores and those exceeding ₹400 crores. It also outlines the surcharge rates based on different income brackets, as well as the Health and Education Cess. Additionally, it mentions the Minimum Alternate Tax (MAT) applicable at 15% on Book profit for AY 2024-25.

Latest Update: From the assessment year (AY) 2024-25, subject to specific conditions, the threshold for Section 44AD has increased to ₹3,00,00,000, while the limit for Section 44ADA has been elevated to ₹75,00,000. If a non-resident chooses to be taxed in a particular year, they will not be permitted to offset any unabsorbed depreciation or carry forward losses in subsequent years. These changes will be effective from the assessment year (AY) 2024-25 and onward.

Common Mistakes to Avoid in Corporate Tax Filing

It is crucial to file your corporate tax without any errors. Here are some of the common mistakes that most of the owners make when they are filing their taxes on business:

• Filing corporate tax returns through the wrong business form
• Calculating the wrong Company tax rates
• Not collecting all the required proofs before filing
• Clubbing both business and personal expenses together
• Missing out on crucial business deductions
• Avoiding auditing and accounting proofs while filing corporate tax return
• Not aware of tax exemptions and rebates while filing income tax return and company tax returns
• No knowledge on latest tax compliance
• Making errors while filing the online corporate tax returns forms
• Submitting the wrong files

Timely Corporate Tax Submission and Deadlines

The due date for filing a return of income by a Company is October 31. However, if the assessee is involved in international or specified domestic transactions requiring a report in Form No. 3CEB, the deadline extends to November 30. The following table outlines the due dates for tax filing for the assessment year providing clarity based on the category of taxpayer:

How Suyog Advisors can Help you ?

There some of the some common mistakes which most of the individuals do during the process of filling their income tax return (ITR), such as:

• Choosing an incorrect ITR form
• Failure in reconciliation of Form 26AS & TDS information
• Putting in incorrect information
• Missing to report source of Income
• Missing on some Possible deductions that could be claimed

Suyog Advisors take cares of above common mistakes and helps in effective tax planning which will minimize your income tax and optimize your income. Our professionals provide one to one feedback before filling the income tax returns to tax payers and guide them for future years as well. On our dedicated watsapp no. taxpayers can post their queries and our professional provide the solutions for same.