The Income Tax Return filing is held under The Income Tax Act of the Indian constitution requires that each and every citizen who is of able age is required to file an ITR (Income Tax Return) with the Income Tax authority to declare all his sources of income which has been earned in a financial year. The returns are required to be filed before the date specified by the Income Tax department. It is mandatory to file the ITR under the laws stated in the Income Tax Act, 1961 and the Income Tax Rules, 1962. Both these acts require the residents to file the income tax return with the Income Tax Department at the end of the financial year.
There are various forms and every form is applicable to a certain section of Assesses only. The forms which are filed by the Assesses who are eligible are processed by the Income Tax Department of India. It is, therefore, necessary to understand the form which is applicable to you in order to file the ITR. Moreover, the filing of ITR is important from the point of view of the government as well. The Indian has to have the database of the database regarding the income of all the people working on the turf and the boundary of the Indian sub-continent because then only it can accurately decide the tax rate as well as the amount of the taxation that the Indian economy is going to earn as direct taxation in the economy.
This is important because direct taxation brings a considerable amount of revenue for the Indian Economy. It is an open secret that the taxation capacity of the Indians is not as high as compared to most other countries in the world. Therefore, it was necessary to devise a taxation scheme that should be in line with the taxation capacity of the Indians. This major bottleneck required that the government must have the data regarding the incomes of the people, thus ITR (Income Tax Return filing) came to the rescue of the problem if the Indian Government. With the introduction of the ITR (Income Tax Returns), the government is able to get the data regarding the income of the people and thus they are able to devise the income tax rate for the general the population of India.