The deadline applies to taxpayers filing ITR-3, ITR-4, ITR-5 and ITR-7 who have business or professional income and whose accounts are not required to be audited under the Income-tax Act, 1961.
With the deadline about three weeks away, here is a look at who needs to file these returns, which form applies to whom and what taxpayers should keep in mind.
Who needs to file by August 31?
The August 31 deadline primarily covers taxpayers with business or professional income who are not subject to tax audit.
This includes certain individuals, Hindu Undivided Families (HUFs), firms and other entities, depending on their income and legal structure.
Taxpayers should select their ITR form based on the nature and amount of income, sources of income and their taxpayer category.
Which ITR form applies to whom?
ITR-3: This form is generally used by individuals and HUFs who have income from a business or profession. It can also cover taxpayers with other sources of income, such as salary, capital gains or income from house property, along with business or professional income.
ITR-4: This form is meant for resident individuals, HUFs and firms, other than LLPs, who meet the eligibility conditions for the presumptive taxation scheme and have income within the prescribed limits. It is generally used by eligible taxpayers with business or professional income who choose presumptive taxation.
ITR-5: This return is used by entities such as firms, LLPs, association of persons (AOPs), bodies of individuals (BOIs) and certain other entities, subject to the applicable conditions.
ITR-7: This form applies to persons, including certain trusts and institutions, who are required to file returns under specified provisions of the Income-tax Act. The applicable filing requirements depend on the nature of the entity and the section under which the return is required.
Why is the August 31 deadline important?
Filing by the applicable due date helps taxpayers avoid consequences associated with a late return, including interest and other implications under the tax law.
Taxpayers should also ensure that the income, deductions and tax credits reported in the return match the information available in their tax records. This can include checking Form 26AS, the Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) before submitting the return.
What should taxpayers do now?
Taxpayers who fall under these categories should first identify the correct ITR form and keep their income and tax-related documents ready. They should also verify information on the income-tax portal before filing and complete the required e-verification after submitting the return.
The Income Tax Department has urged taxpayers not to wait until the last minute, citing the possibility of a rush closer to the deadline.
