A comprehensive guide on ITR filing

An Income Tax Return (ITR) is an annual tax form that every individual, including salaried professionals, self-employed individuals, and businesses has to file with their tax authorities. In India, the Income Tax Department (ITD) requires individuals to file claims, report their income, and detail their taxation records for the previous financial year (April to March). You may also file ITR even if you do not have a reliable income or you are carrying forward losses. It is not only a legal requirement to file ITR but it is also your responsibility as a citizen to contribute to the development of your country. Even as  a DSA partner, your customers may reach out to you for ITR queries. Here’s what you need to know about ITR filing as a loan agent:


Types of ITR Forms

You can earn your income from any source. But make sure it is legal and verified, such as a DSA partner. Based on the nature of your income, the ITD has categorized their forms. When filing ITR, you must choose the one that matches your financial circumstances.


  • ITR 1: This form applies to individuals with a total income of up to INR 50 lakhs from salary, house property, and other sources except for lottery winnings and racehorse income. Another name of the form is ‘Sahaj’.

  • ITR 2: This form applies to individuals and HUFs (Hindu Undivided Family) with a total income of more than INR 50 lakhs from any source except for business or profession. This form is also used for foreign income or assets.

  • ITR 3: This form applies to individuals and HUFs whose primary source of income is their business. 

  • ITR 4: This form applies to individuals, HUFs, and partnership firms who have opted for the presumptive taxation scheme under Section 44AD, 44ADA, or 44AE of the Income Tax Act.

  • ITR 5: This form applies to LLPs (Limited Liability Partnerships), where every partner is not liable for his other partner’s debts, and the Association of Persons (AOPs), where a group of people comes together intending to make money. 

  • ITR 6: This form applies to companies that are not claiming an exemption under Section 11 of the Income Tax Act.

  • ITR 7: This form applies to persons who are required to furnish a return under Section 139(4A) or Section 139(4B) or Section 139(4C) or Section 139(4D) of the Income Tax Act.


Benefits of Filing ITR


  • Compliance with the law: Filing ITR is a legal requirement for all individuals and businesses who are liable to pay taxes. Even as a loan agent, you will need to file your taxes. If you do not comply with these regulations, you may have to pay penalties and the prosecution can take legal action against you. 
  • Claiming refunds: If you have paid more taxes than you owe to the government, you can claim a refund by filing ITR. The refund amount will be credited to your bank account.
  • Loan and credit card applications: If you pay your taxes regularly, it can give you an edge when applying for loans and credit cards. ITRs establish your credibility as a reliable borrower. Banks and NBFCs also ask for ITR documents as proof of income when processing loans and credit card applications. 
  • Visa applications: Some countries require ITR as proof of income while processing visa applications. Filing ITR regularly can help you with visa applications and travel to those countries.
  • Building financial credibility: Filing ITR regularly can help you establish your financial credibility and trustworthiness. It can also help you get preferential treatment in financial transactions.


How to File ITR?

The Income Tax Department of India allows you to file your ITR online. Here’s what to do when filing an ITR. 


  • Gather all your relevant documents, including Form 16, salary slips, bank statements, and investment proofs.
  • Your ITR form should include all your income details, such as your salary details, payment invoices, and interest from your income. You can claim tax deductions under Section 80 C. You should also add TDS, TCS, or any advance tax that you may have paid throughout the year. Fill in Form 26AS to calculate your TDS. 
  • Download the relevant ITR form from the ‘Downloads’ in the top menu bar of the Income Tax Department’s website (www.incometax.gov.in) or e-filing portal.
  • Choose your  assessment year and download the offline utility software i.e. Microsoft Excel or Java or JSON utility. 
  • Fill in the details in the ITR form, including personal information, income details, deductions, and tax payable. You can also use the pre-filled XML file downloaded from the income tax department’s website to fill in the ITR form automatically. 
  • Click on the ‘Validate’ button on the right side of your screen to ensure that all the information you entered is saved. 
  • Check the form for accuracy and completeness. Ensure that all details are correctly entered and that there are no errors.
  • Calculate the tax payable or refundable based on the details entered in the form.
  • Pay any remaining tax payable through net banking or challan payment. If you have overpaid tax, claim the refund in the form.
  • Next, you have to generate the XML file and upload it to the income tax department’s website or e-filing portal. Click on the ‘e-file’ tab on the online platform to select the ‘Income Tax Return’ option. Provide the necessary details like your PAN card information, assessment year, ITR form number, and the Submission Mode. Then, attach the XML file from your device and press ‘Submit’. 
  • You will also be asked for an e-verification as a final checker. You can choose between verifying your Aadhar OTP or electronic verification code (EVC). If you are submitting a physical copy of the form, attach all relevant documents and submit it to the nearest income tax office.
  • Once the form is submitted, you will receive an acknowledgment receipt. Keep this receipt safe as it is proof of filing ITR.


What to Remember When Filing ITR?


  • Your deadline for filing an ITR is on the 31st of July of the following financial year. 
  • If you miss the deadline for filing your ITR, you will attract a penalty. 
  • If you miss the deadline, you may file a belated ITR by 31st December but would need to pay a penalty. 
  • Before submitting the ITR form, make sure to check if there are any errors. Ensure that you are submitting only the most updated information. Incorrect details and delays may lead to penalty charges.
  • Keep all your necessary documents, including Form 16, bank statements, and investment proofs handy before beginning the process of filing ITR.


To Conclude

Filing ITR is one of the most essential aspects of being a responsible citizen and contributing towards the development of the country. It also helps you to claim refunds, secure loans, and establish financial credibility. If you have more than one source of income such as being a part-time DSA partner or loan agent, or you are confused about the process, you can consult a CA or financial advisor to help you with the process. Follow Andromeda Loans for more.