An income tax return (ITR) is a form you file with the Income Tax Department in India. It basically reports your income for a specific financial year (April 1st to March 31st of the next year) and the taxes you owe on that income.

 Reports your income: 

You’ll detail all your income sources like salary, business income, property income, capital gains, and interest income.

• Calculates your tax liability: Based on your income and deductions, the ITR helps determine the amount of tax you owe.
• Claims deductions and exemptions: You can claim deductions for expenses allowed by tax laws (like medical bills or charitable donations) to reduce your taxable income.

There are different ITR forms depending on your income sources and filing requirements. You can find more information about ITR forms.

Filing your Income Tax Return (ITR) is important for a few reasons that benefit both you and the country:

·        Claim tax refunds: If taxes were deducted from your income (called TDS) throughout the year, but your total taxable income falls below the basic exemption limit, you can claim a refund by filing an ITR.

·        Get loans and visas: An ITR acts as proof of your income and income tax compliance. This can be crucial when applying for loans, credit cards, or visas where they may ask for your ITR for the last few years.

·        Carry forward losses: If you incurred business losses during the year, filing your ITR allows you to carry forward those losses and offset them against your income in future years, reducing your tax burden.

·        Build credit history: Although not directly a credit score factor, filing ITRs demonstrates financial responsibility, which can be positive for your credit history.

·        Nation Building: The taxes you pay contribute to government funds used for public infrastructure, social programs, and national development.

·      Avoid penalties: Failing to file your ITR by the due date can lead to penalties and interest charges.

Documents for Income tax return filing

Mandatory Documents:

• PAN Card: This is your Permanent Account Number, a unique identifier used by the Income Tax Department.
• Aadhaar Card: Linking your Aadhaar with your PAN is mandatory for most taxpayers filing ITRs. In some cases, you can use your Aadhaar number instead of your PAN to file.
• Bank Account Details: You’ll need your bank account information for receiving any tax refunds.