“What is ITR Filing?”, Advantages of filing Income Tax Return Form, and Additional Information that needs to be filed in ITR Form by Taxpayer

Introduction

From ITR-1 to ITR-6, every form is essentially the same as last year. There have been no significant modifications to these. However, starting this year, income tax payers will need to include a few more details on the ITR form. In this article we will look into the additional information that needs to be filed in ITR Form by Taxpayer, “What is ITR filing”, and Advantages of filing Income Tax Return form is mentioned.

The source of the taxpayers’ pension, interest from their EPF (Employee Provident Fund) accounts, the date they bought or sold their land, and many other details would now need to be disclosed. You could have trouble filling out the return form if you are unaware of these changes.

What is ITR Filing?

ITR stands for Income Tax Return. A person must file an Income Tax Return form with the Indian Income Tax Department. It includes details on the individual’s earnings and the yearly taxes owed.

Advantages of filing Income Tax Return Form

• Tax Refund can be claim 

Even if your total taxable income is below the basic exemption limit and you owe no taxes for that year, there maybe times when tax has been withdrawn from your income in the form of TDS (Tax Deducted at Source). You will need to file an income tax return in this situation in order to receive the TDS Refund.

• Taxpayer can carry forward there losses

You can carry forward losses to subsequent years if you file the return by the original due date. These losses can then be utilised to offset future income. As a result, you can lower your tax obligation on future income by deducting some losses from the relevant income. The income tax return must be filed in order to accomplish this.

• Hustle free loan approval

When a person needs to apply for a vehicle loan, a house loan, or any other type of loan, filing the ITR will help them in getting easy loan approval. A copy of tax returns maybe requested as evidence of income statement by all major banks. This document is necessary for the easy and quick loan approval process.

6 Information that needs to be filed in ITR Form by Taxpayer

• Information of Interest Accrued on EPF Account

If an employee contributes more than INR 2.5 lakh to their Employees’ Provident Fund account in a fiscal year, starting in assessment year 2022–23, the interest they earn is taxable in their hands.

• The annual cost of land and building improvements

The cost of every modification or improvement done to the house will be taken into account. An individual must this year include year-by-year details on the price of house improvements when filing their ITR (Income Tax Return).

• Information related to Pension

Pensioners must identify the source of their pension on ITR forms. The following options must be selected by pensioners from the “Nature of Employment” drop-down menu:

1. SC for retires from the state government.
2. PSU is open to anyone who receive pensions from public-sector employers.
3. Other pensions, such as EPF, family pensions, etc., that people may receive.

• Information on Property sold out of India

An individual taxpayer must report the sale on the new Income Tax Return form if they sell property abroad. Details like the buyer’s address and the property must be included in this.

• Date of Purchase or Selling of Land

Starting this year, you must report the purchase and sale dates on the ITR form’s “Capital Gains” schedule if you sold real estate or a building between April 1, 2021, and March 31, 2022. Annual disclosure of this information on land or building renovation costs is also required.

• Information on Indexed cost of Acquisition and Initial cost of Purchase

A person only needed to mention the asset’s indexed cost of purchase when reporting capital gains achieved during a financial year. This year, the taxpayers are required to submit reports for both the initial cost of acquisition and the indexed cost of acquisition.

Conclusion

The current income tax slabs and tax rates were not changed or revised in the Union Budget 2022, which was unveiled on 1 February 2022. However, IT (Income Tax) Department has announced the above 6 additional information that needs to be filed in ITR Form by taxpayer.