Income Tax News: How To File ITR? Exemptions, Eligibility & Procedure

For income tax-paying citizens, 31st July is around the corner. With that comes legal jargon, incomprehensible to many. Here’s a simple guide on how you should file your Income Tax Return (ITR).

Are You Liable to File ITR?

Income taxes are paid by every natural and artificial person, i.e., individuals, Hindu Undivided Families (HUFs), Association of Persons (AOPs), Body of Individuals (BOIs), Firms, Limited Liability Partnerships (LLPs), Companies, Local Authorities, and any artificial juridical person.

If you fall in any of these categories, you must pay your income tax on or before 31st July 2025; this is known as the assessment year for the income that you earned between 1st April 2024 and 31st March 2025, known as the previous year.

An individual earning more than 2,50,000 and a senior citizen between the ages of 60 and 80 between 1st April 2024 and 31st March 2025 earning 3,00,000 is not liable to pay income taxes.

Beyond these income limits, you are charged taxes based on your income tax brackets.

What are some ITR Exemptions?

The income definition includes salary received in cash, kind, or facility from an employer, profits, sale of capital assets, and interest, dividends, or commissions arising from investments.

Despite these, you can seek some exemptions. Capital receipts, which include receipts on the sale of residential buildings and personal jewellery, are exempted from taxation.

Agricultural income is also exempt, but animal husbandry is not considered agricultural income.

You can claim relief in the presence of double taxation by both India and a foreign country as per section 91 of the Income Tax.

Professionals (individuals and HUFs) can also file for exemption if they earn less than 2,50,000 in income and less than 25,00,000 in turnover.

Other professions not in the category are also exempted if their incomes are less than 1,20,000 and turnover is less than 10,00,000.

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How to File ITR?

After making sure you are eligible, you should file for ITR by logging into the e-filing website (https://www.incometax.gov.in) using your PAN (Permanent Account Number).

The government may collect your taxes either through voluntary payment, taxes deducted from the source (TDS), or taxes collected from the source (TCS).  You are expected to keep track of books of accounts and all related documents for the relevant assessment year, as taxpayers must be responsible for computing their taxes correctly.

While filing for ITR, make sure you take the correct precautions. Choose correctly whether you are paying corporation tax or income tax, the amount and mode of tax payment, the type of payment, the assessment year, and the correct PAN.

In the case where you have incorrectly understated your income and, therefore, your tax, a demand will be raised by the department, and you must pay within 30 days of receipt of the demand. It is called the Tax on regular assessment.