What is Income Tax Return?
Today, whether you are salaried or self-employed, filing ITR has become an important financial responsibility. But many people get confused – What is ITR? Why should we file it? Who files it? And how to file it?
In this blog post, we will explain in easy language the basics of ITR, its types, process, and the documents you need. Ready? Let’s start!
What is ITR?
The full form of ITR is Income Tax Return. It is a legal document in which you tell your annual income details to the government (Income Tax Department of India).
Through this form, you tell what your income is, how much tax you have paid, and if any refund is due, you can also claim it.
Who files Income Tax Return?
In India, these people file ITR or it is necessary for them to do so:
- Salaried individuals whose income is more than ₹2.5 lakh
- Business owners or freelancers
- NRI (Non-Resident Indians) with income in India
- Senior citizens above 60 years with taxable income
- Companies and partnership firms
- Investors with capital gains or dividend income
Benefits of filing Income Tax Return
Many people think that if their income falls under the tax slab, then it is not necessary to file the ITR. But look at the benefits:
1. Easy to take a loan
The bank asks for the ITR of the last 2-3 years when you apply for a loan.
2. Helpful for visa applications
ITR proofs are also very important for a foreign visa.
3. To claim the refund
If you have paid extra tax, then you get a refund by filing the ITR.
4. Legal proof of income
ITR is the official proof of your income, which is helpful in business deals and legal issues.
Types of ITR in India – Which Form is Right for You?
ITR-1 (Sahaj):
For salaried individuals whose income is up to ₹50 lakh and is from salary, pension, or one house property.
ITR-2:
If your income is from capital gains, foreign income, or multiple properties then this form is applicable for that.
ITR-3:
This form is filed when there is income from business or profession.
ITR-4 (Sugam):
For small businesses and freelancers with temporary income.
(There are other forms like ITR-5, ITR-6, ITR-7 for firms, companies, trusts etc.)
Process to File ITR – Step by Step Guide
Step 1: Keep the documents ready
- PAN Card
- Aadhaar Card
- Bank Statements
- Form 16 (if salaried)
- Investment proofs (LIC, PPF, ELSS, etc.)
- Interest certificates (FD, savings)
Step 2: Calculate Income
Add your salary, freelance income, rent, and capital gains.
Step 3: Calculate Tax liability
Whatever deductions (80C, 80D, etc.) are applicable, subtract them and find out the net taxable income.
Step 4: File ITR
Go to the official portal of Income Tax India (https://www.incometax.gov.in/) and file ITR. Or you can take the help of a CA.
Step 5: Verification
After filing, the ITR has to be verified. You can do this through Aadhaar OTP, bank account, or ITR-V courier.
What is the last date for filing Income Tax Return for 2025?
Usually, the last date for filing ITR for individual taxpayers is 31 July 2025. But if an audit is required, then the date can be extended.
There may also be a penalty for late filing ranging from ₹1,000 to ₹5,000, so it is best to file on time.
Common Mistakes People Make When Filing ITR
- Giving the Wrong bank details
- Not being able to claim deductions
- Ignoring capital gains or FD interest
- Not verifying ITR
- Choosing the wrong ITR form
Avoid these mistakes to stay safe and compliant.
FAQs – What is ITR?
Q1. If my income is less than ₹2.5 lakh, can I file ITR?
Yes, absolutely. You can file. It is helpful for getting a refund, a visa, or income proof.
Q2. Is it mandatory to file ITR?
If your income is above the tax slab, then yes, it is mandatory.
Q3. Which ITR form is right for me?
The form is decided on the basis of whether you are salaried, do business, or have capital gains income.
Q4. Can ITR be filed without a CA?
Yes, you can file ITR yourself from the government portal or tax filing websites.
Q5. What happens after filing ITR?
You have to verify your ITR. After verification, assessment is done, and refund (if any) is credited to your account.
Conclusion – Become Financially Smart
Today’s smart citizen is one who is aware of his taxes and finances. The answer to “What is ITR?” is not just a legal requirement, but also a proof of being a responsible citizen.
So if you have not filed ITR till now, start from 2025. Keep your documents ready, choose the right form, and boost your financial health.
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