Income Tax Return
What is a Tax Return
Income Tax Return
A tax return is a form(s) filed with a taxing authority that reports income, expenses, and other pertinent tax information. Tax returns allow taxpayers to calculate their tax liability, schedule tax payments, or request refunds for the overpayment of taxes. In most countries, tax returns must be filed annually for an individual or business with reportable income (e.g., wages, interest, dividends, capital gains, or other profits).
Three Sections of a Tax Return:-
- The income section of the tax return lists all sources of income. The most common method of reporting is a W-2 tax form. Wages, dividends, self-employment income, royalties, and in many countries, capital gains must also be reported.
- Deductions decrease tax liability. Tax deductions vary considerably among jurisdictions, but typical examples include contributions to retirement savings plans, alimony paid, and interest deductions on some loans. For businesses, most expenses directly related to business operations are deductible. Taxpayers may itemize deductions or use the standard deduction for their filing status. Once the subtraction of all deductions is complete, the taxpayer may determine their tax rate on their adjusted gross income.
- Tax credits are amounts that offset tax liabilities or the taxes owed. Like deductions, these vary widely among jurisdictions. However, there are often credits attributed to the care of dependent children and seniors, pensions, education and many more.
TYPES OF ITR RETURNS:-
INCOME TAX RETURN VARIES AS PER THE CATEGORY OF ASSESSES.
- FOR INDIVIDUALS/HUF—ITR-1, ITR-2, ITR-3 & ITR-4
- FOR COMPANY–ITR-6 & rnITR-7
- FOR OTHER THAN INDIVIDUALS AND COMPANY —ITR-5
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