Income Tax: Filing your Income Tax Return (ITR) is not just important but also a legal requirement. It provides the Income Tax Department with details about your income and taxes paid. The last date to submit your ITR for the assessment year 2024-25 in India is July 31, 2024. Failing to file by this date will incur a late fee of ₹500 per month or part thereof, up to a maximum of ₹1,000.
It’s mandatory to file an ITR if you earned income from or invested in foreign assets during the financial year. Additionally, having an ITR filed is crucial when applying for visas or loans. Whether your business made a profit or incurred losses, filing your ITR remains a legal obligation.
If you’ve experienced business losses or undercapital gains, you can only carry them forward to the next year if you file your return before the due date.
Choosing the Right ITR Form
For the Financial Year (FY) 2023-24, which corresponds to the Assessment Year (AY) 2024-25, the type of ITR form you need to file depends on the nature of your income.
ITR-1 (Sahaj):
- Intended for resident individuals with a total annual income of up to ₹50 lakh.
- Suitable for individuals earning income from salary, pension, one-house property, or other sources (excluding specific categories).
ITR-2:
- Extensive form for individuals and Hindu Undivided Families (HUFs) with diverse income sources, including capital gains, foreign income, or agricultural income over ₹5,000.
- Applicable to directors of companies, residents not ordinarily resident (RNOR), or non-residents.
- Covers those with investments in unlisted equity, assets abroad, or obligations like tax under Section 194N or ESOPs.
- Allows for carrying forward losses from previous years.
Importance of Timely Filing
Filing your ITR on time not only helps avoid penalties but also ensures you can carry forward any losses to offset against future income. This can significantly benefit those with variable incomes, capital gains, or business losses.
For further guidance on which ITR form to file, individuals can visit the official Income Tax Department website or consult with a tax professional. Timely and accurate filing of your ITR is essential for compliance and to take advantage of potential tax benefits.
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