Income Tax Filing in India

The process of income tax filing in India involves submission of income tax along with relevant documents declaring yearly income of the individual or company. The process of income tax filing in India is governed by the Ministry of Finance.

The Ministry of Finance of the Government of India has dedicated departments that are involved with the process of tax collection and maintenance of all relevant records associated with it. The main body that is authorized to implement the process of income tax filing in India is the Department of Income Tax, Government of India. The corpus accumulated by this department from individuals and companies as income tax is forwarded to the Ministry of Finance, Government of India. The revenue so collected is used to run the Government of India machineries. The whole process of income tax filing in India is done in accordance with the Income tax acts and rules as drafted by the Department of Income Tax under the guardianship of Ministry of Finance, Government of India. The main objective of filing income tax returns in India is to have structured records of India's income tax payers.

The procedure of income tax filing in India by an individual or a company involves submission of yearly income details in an account number, which is being allotted by the Income Tax Department of India. This account number is characterized by a unique combination of alpha-numeric character called Permanent Account Number (PAN). This Permanent Account Number enables the tax department of India to record each and every relevant details pertaining to tax declaration and collection of an individual or company.

The individual or companies that comes under the purview of income tax filing in India are as follows -

• Individuals, Hindu Undivided Family (HUF) - Filing of Income Tax returns is a legal obligation of every Individual/HUF whose total income for the previous year has surpassed the upper limit of tax relaxation
  
  
• Firms/AoPs/BoI - Filing of Income Tax returns is a legal obligation of every Firm/AoP/BoI whose total income for the previous year has surpassed the upper limit of tax relaxation
  
  
• Companies - Filing of Income Tax returns is a legal obligation of every company whose total income for the previous year has surpassed the upper limit of tax relaxation
  
  
• Trusts - Filing of Income Tax returns is a legal obligation of every Trust whose total income for the previous year has surpassed the upper limit of tax relaxation
  
  
• FBT - Filing of Income Tax returns is a legal obligation of every individual whose total fringe benefit value for the previous year has surpassed the upper limit of tax relaxation

Please note all the above-mentioned taxable entities can enjoy tax rebates on their income or benefits under the provisions of the Indian I.T. Act, 1961.

Since, the inception of first organized Income tax collection regime in 1922 the present regime have made tremendous progress, especially in the following areas -

• Rationalizing of income tax rates
• Inclusion of wide variety of taxpayers
• Increased penetration
• Increase in effectiveness and productivity of the nation
• Increase in the quantum of revenue collection
• Improvement in services of the government
• Improvement in employability across all industry verticals
• Induction of modern technology in to the system
• Rationalization of terms and condition of the Indian economic system
• Rationalization of employment terms and conditions of the Indian workers

The important declarations that are to be made while undertaking the process of income tax filing in India are as follows -

Information required for individual tax payer -

• A copy of latest / preceding year tax return
• Bank Statement
• TDS certificates
• Savings certificates / Deductions
• Interest statement showing interest paid to the individual throughout the year

Information required for corporate tax payer -

• A copy of latest / preceding year tax return
• Bank Statement
• TDS certificates
• Savings certificates / Deductions
• Interest statement showing interest paid to the corporate throughout the year
• Profit and Loss Account
• Balance Sheet

India Income Tax Returns