ITR (Income Tax Return)

An income tax return is the annual statement in which a taxpayer reports income for a year, claims deductions and exemptions, reports taxes already paid through TDS and advance tax, and arrives at either a balance payable or a refund due. In India it is filed electronically on the Income Tax Department's e-filing portal, and the form used is selected according to the nature of the income rather than its size.

The form choice is where most first-time filers go wrong. A salaried individual with one house property and modest other income generally uses the simplest form; adding capital gains, more than one house property, foreign assets, or non-resident status moves the filing to a fuller form; business or professional income moves it further still; and presumptive taxation has its own form. Filing on the wrong form is a common reason a return is later flagged as defective.

Filing is not only for people who owe tax. It becomes mandatory once gross income before deductions crosses the basic exemption threshold, and separately in a number of situations regardless of income level, including certain high-value transactions and specified deposits or expenditure. It is also the only route to a refund where TDS exceeds actual liability, and the only way to carry a loss forward to set against future income, which requires the loss-year return to be filed by the original due date.

Submission is not the end of the process. A return must be verified, and the window is 30 days from filing. An unverified return is treated as invalid, meaning it is never processed and no refund is ever computed, even though the portal issues an acknowledgement that looks like proof of filing. Verification can be completed through Aadhaar OTP, net banking, and other electronic routes, or by sending a signed physical acknowledgement.

After verification the return is processed at the Centralised Processing Centre, which cross-checks the figures against Form 26AS, the Annual Information Statement, and the department's own records, then issues an intimation under Section 143(1) setting your figures beside its own. Where they agree, nothing further is required. Where they diverge, the intimation shows exactly which line is in dispute, and the correct response depends on whether the error was in your return or in the processing.