Mint Money: Confused about ITR forms? Here’s how to pick the right one
As the tax filing deadline of 31 July looms, individuals and small business entities rush to navigate the income tax website to choose the right ITR form.
While the website does provide guidance to some extent, mistakes in filing can happen. Submitting the wrong form can result in the IT department treating it as invalid and rejecting it. In such a case, you can always submit a revised return with the correct details by 31 December to avoid income tax notice or penalty.
Missing the 31 July deadline, however, can lead to significant consequences.
Failure to submit the ITR form on or before the deadline can incur a late payment penalty of ₹5,000, said Prakash Hegde, chartered accountant. The penalty could be ₹1,000 if total income is less than ₹5 lakh.
If there is a pending tax liability, an interest of 1% per month would be applied for late filing, in addition to 1% a month for late payment until it is paid. Additionally, losses, other than that from house property, will not be allowed to be carried forward.
Besides, taxpayers will not be allowed to opt for the old tax regime. If the ITR is still not filed by 31 December, the filer might be liable for a much higher tax liability when he files an updated ITR.
Choosing the correct ITR form is a crucial step in tax filing. Here’s a guide, using fictional characters for illustrative purposes, on which ITR form to file. Note that this should not be treated as a substitute for getting a chartered accountant to handle your ITR filing needs.
Suppose an engineer who started working last year has to file his ITR. Considering it’s his first job, let’s say he spent all his income on buying gadgets and investing some in mutual funds. Which ITR form should he be filing, considering he
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