Though Income Tax Returns and GST Returns are completely different from each other, taxpayers have to file both to ensure they are compliant with the respective tax authorities. The taxpayers who earn income that is more than the basic exemption limit are mandated to file Income Tax Returns. Whereas the businesses with an annual turnover of more than Rs 40 lakhs in case of supply of goods and Rs 20 lakhs in case of service supply need to file GST Returns. Here is a complete guide on the essential steps for filing income tax returns and GST returns, and what is the importance of these returns.
Essential Steps for Income Tax Returns (ITR)
Individuals, companies, firms, HUFs, and institutions are all eligible for File your ITR if they have income exceeding the basic exemption limit. The basic exemption limit for the Financial year 2024-25 (Assessment year 2025-26) is Rs 3 lakhs u/s 115BAC, though those whose income does not surpass this limit can still choose to file ITR for many purposes. Getting loans, receiving income tax refunds, and carrying forward losses become easy after filing income tax returns. Therefore, you must opt for filing them and ensure your compliance with the Income Tax Department’s rules in India.
Here is a step-by-step guide on how to file returns for the current assessment year online on the official portal of e-filing.
Step 1:
When it comes to tax filing, the first and foremost step is to calculate total taxable income. Consider all the sources of income like rental, house property, business, profession, capital gains, stocks, shares, investments, salary, and other sources, Etc. Because, based on the overall income, you will be able to decide the applicable tax rates and total tax liability.
Step 2:
It is time to examine the TDS paid by inspecting Form 26AS. Form 26AS is a form that you can use to summarize the TDS/TCS Returns amount. Now comes the time for selecting the right ITR form among all. Based on the type of taxpayer you are, you can choose to file from ITR 1 to ITR 7.
Step 3:
- ITR 1 for resident individuals
- ITR 2 individuals and HUFs (who are eligible for ITR 1)
- ITR 3 for individuals and HUFs having income from profits and gains from business and profession
- ITR 4 individuals and HUFs under presumptive taxation
- ITR 5 for entities such as firms, LLPs, AOPs, BOIs, etc.
- ITR 6 companies registered under the Companies Act 2013
- ITR 7 those eligible under section 139 (4A, 4B, 4C, & 4D)
Step 4:
Download the form from the portal and fill it up with all the details and validate the form, and then submit it with an electronic verification code or Aadhaar OTP.
Essential Steps for GST Returns
Goods and Services Tax, or commonly known as GST, replaced previous indirect taxes and made the indirect taxation more unified and streamlined. It is a destination-based tax means the goods or services will be taxed in the state where they are consumed, not in the state where they are produced. Different types of businesses file different File Your GST Returns, ranging from GSTR 1 to GSTR 10. These returns record business purchases, sales, output on sales, input tax credit, etc.
Here is a step-by-step process following which you can file easy GST Returns and make your business GST compliant, and assist the government to make the system more transparent.
Step 1:
Visit the GST portal for the online filing procedure and log in with valid credentials using the Permanent Account Number and state code for data verification. And select the form appearing on the computer screen and start to prepare online.
Step 2:
The returns appear based on the filing frequency as they are monthly, quarterly, or annual returns. Upload the invoices to generate a unique invoice reference number. It enables you to file outward and inward returns.
Step 3:
Submit all the details, and after submission, you can track the return status to know whether it is approved or is yet to be approved by the authorities. Also, clear the tax liability after offsetting it with the input tax credit. Submit it with DSC or EVC, as applicable.
Seek Professional Help from TaxDunia
Filing Income Tax Returns and GST Returns takes a lot of time, as you must have a deep understanding of each in and out. Therefore, reaching out to an expert can save you time and help you navigate swiftly. Let us handle your taxes while you keep focus on the business and strategic decision-making for growth.
