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Basics of ITR

When it comes to managing your finances, filing an Income Tax Return (ITR) is not just a mere legal obligation but an important step in maintaining financial discipline and ensuring compliance with tax laws. However, terms like ITR forms, deductions, and refunds may sound overwhelming at times, especially for beginners. But what is an Income Tax Return? Is it important for everyone?Read More

Let’s break down the basics of ITR meaning, the different types of ITR, and all about income tax returns.Read Less

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Written ByShruti gujarathi
AboutShruti gujarathi
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Shruti gujarathi has 5 years of experience in the BFSI sector, and as Manager- Digital Marketing at Bajaj Allianz Life Insurance, manages digital and content marketing. She has had hands-on experience in content strategy, performance marketing and Strategic Alliances over a career spanning 10 years.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 21st Feb 2025
Modified on: 22nd Feb 2025
Reading Time: 15 Mins
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What is an income tax return (ITR)?
 

An income tax return (ITR) is a form through which businesses, individuals, and other entities report the A-Z of their income, expenses, and tax liabilities to the Income Tax Department. In other terms, you the taxpayer, declare your income, expenses, and taxes paid during a financial year. The Income Tax Department uses this information to analyses if you have paid the right amount of tax, if you owe any additional taxes, or are eligible for a refund.

In a nutshell, ITR is like a financial report card that shows your earnings and the taxes you owe/have paid.
 

Why should you file an ITR?
 

Filing your ITR has benefits way beyond fulfilling your duties and legal requirements. Here’s how it helps:
 

  1. Claim refunds:

    If your employer or bank has deducted more tax (TDS) than required, filing an ITR is the only way you can claim a refund.

  2. Carry forward losses:6

    Filing ITR enables you to carry forward business or capital losses to offset against future income.

  3. Proof of income:

    ITR is an official proof of income. This is useful when applying for visas, loans, or credit cards.

  4. Legal compliance:

    This is the obvious reason. Filing an ITR shows your compliance with tax laws and avoids legal scrutiny or notices from the Income Tax Department.

  5. Build financial credibility:

    Regular filing shows financial discipline and can even strengthen your financial profile.
     

What are the types of ITR forms?8 5
 

The Indian government offers different types of ITR forms5 for various categories of taxpayers. Here are the most common ones:

Type of ITR form

Form Details

ITR-1 (Sahaj)

Resident Individuals who are Salaried salaried or individuals, pensioners, or those with income from one house property (subject to certain exclusions) or interest, or with agricultural income of up to ₹5000 or income from other sources. Here, the total income should not exceed ₹50 lakhs in addition to other exclusions. .

ITR-2

An individual or Hindu Undivided Family (HUF) must use this Return Form for AY 2024-25 if their income includes incoem from -  salary/pension, house property, capital gains, other sources (including lottery winnings or racehorse income), or foreign income. It also applies if-  they are a company director, have investments in unlisted equity shares, qualify as a resident not ordinarily resident (RNOR) or non-resident, earn agricultural income over ₹5,000, own foreign assets or have signing authority abroad, had tax deducted under Section 194N, in case payment or deduction of tax has deferred on ESOP tax, or need to carry forward losses. Additionally, if clubbing income from a spouse, child etc ,with the income of assessee  or another person applies, this form should be used where such income falls under above category. The total income can exceed ₹50 lakh.

Individuals with income from capital gains, multiple properties, or foreign assets/income.4 It also applies if you are an individual director in a company or a HUF (Hindu undivided family).

It is applicable for individuals with income above ₹50 lakhs or capital gains.

ITR-3

The ITR-3 Form is for individuals or Hindu Undivided Families (HUFs) with income from a proprietary business or profession. It applies to those not opting for presumptive income, those required to maintain account audited books and or required to get them audited, individuals with investments in unlisted equity shares, and partners in a firm. It can also include income from salary/pension, house property, and other sources. Those ineligible for ITR-1, ITR-2, or ITR-4 should file ITR-3.

For individuals and HUFs with income from business or profession. Also, if you are an individual or HUF who isn’t eligible to file ITR-1, 2, and 4, you need to file ITR-3.

ITR-4 (Sugam)

ITR-4 applies to resident individuals, HUFs, and partnership firms (excluding LLPs) with income from business (under Section 44AD/44AE) or profession (under Section 44ADA) opting for the presumptive income scheme. It also covers salary/pension, income from one house property (subject to certain exclusions), and other sources, provided the total income does not exceed ₹50 lakh (excluding lottery and racehorse income). Freelancers with gross receipts up to ₹50 lakh can also opt for this scheme. If business turnover exceeds ₹2 crore, ITR-3 must be filed.

This applies to individuals and HUFs, Partnership firms (other than LLPs),   freelancers, professionals, or small business owners using the presumptive taxation scheme. Note that the total income must not exceed ₹50 lakhs.

ITR-5, ITR-6, and ITR-7

ITR-5 is applicable for firms, LLPLimited Liability Partnerships, Association Of Persons, Body Of Individuals, Artificial Juridical Persons (AJP), estates of deceased ,or estate of  insolvent individuals, business trusts, and investment funds.

For firms, partnerships firms, LLPs, associations of persons (AOPs), BOIs (body of individuals), companies, trusts, Artificial Juridical Person (AJP), scientific research institutions, colleges/universities, and political parties.

ITR-6

For companies, excluding those claiming exemption under section 11 (Income from property held for charitable or religious purposes), the return must be filed electronically.

ITR-7

For individuals, including companies, who are required to file returns under sections 139(4A), 139(4B), 139(4C), 139(4D), 139(4E), or 139(4F).


How to file ITR in India?
1
 

The process of filing an ITR is quite easy. Here’s how you can file itr do it:

  1. Paperwork:

    Gather all necessary documents that are needed

  2. Log in to the income tax portal:

    Next up, register or log in to the e-filing portal (www.incometax.gov.in) with your PAN and security message.

  3. Select the appropriate form:

    Based on your income type, choose the ITR form that suits you.

  4. Fill and submit:

    Herein, fill in your personal details, income details, and deductions. Make sure that you double-check and verify all the details before submitting the form online.

  5. Claim deductions:

    Use deductions under sections like 80C (investments), 80D (health insurance) (in case of old tax regime), and others to reduce your taxable income.

  6. Calculate tax:

    The portal will automatically calculate your tax liability or refund.

  7. Verify and submit:

    Once submitted, verify your return using Aadhaar OTP, net banking, or an offline method like sending a signed ITR-V to the CPC office/the Income Tax Department.

    1. Section 80C:

      Deduction of up to ₹1.5 lakhs for investments in PPF, EPF, ELSS, tax-saving FDs, etc.

    2. Section 80D:

      Premiums paid for medical insurance can be deducted up to ₹25,000, ₹50,000 if you are below 60 years old (deductions for senior citizens can go upto ₹1,00,000).

    3. Section 24 (b):9

      Deduction from house property income on home loan interest (up to ₹2 lakhs).

    4. Section 80E:8

      Deduction for interest on education loans.

    5. Section 80G:

      Deductions for donations to approved charitable institutions and eligible funds.

    6. Section 10(13A):

      Exemptions for house rent allowance (HRA)7.

    7. Section 80CCD(1B):

      Allows an additional deduction of up to ₹50,000 for contributions to the National Pension Scheme (NPS) and the Atal Pension Yojana (APY).

    8. Section 80TTA:

      Provides a deduction of up to ₹10,000 on interest earned from savings accounts.

    9. Section 80TTB:

      Exclusively for senior citizens, it offers a deduction of up to ₹50,000 on interest income from savings accounts, post office deposits, and fixed deposits.

    1. Do I need to file an ITR?3

      Filing your ITR becomes mandatory in case your income exceeds the basic exemption limit set by the government.

    2. Which at documents are needed to file the ITR?2

      You need to submit form 16, PAN Card, Aadhaar Card, Form-16A/ Form-16B/ Form- 16C (if applicable), Bank account details, bank statement/passbook, Form 26AS s and Annual Information Statement (AIS)/ Taxpayer Information Statement (TIS).

      Home loan statement, tax savings instruments, capital gains detail, rental income, foreign income, dividend income, interest certificate (if applicable).
       

Deductions you should know about
 

A part of understanding the ITR meaning also involves knowing the deductions. Claiming deductions can significantly reduce your tax burden. Here are some common ones under the new old tax regime:6,74
 

Conclusion
 

Filing ITR is important irrespective of who what you are, i.e., a salaried employee, business owner, or NRI. After all, staying compliant ensures peace of mind and allows you to benefit from tax refunds, deductions, and a clean financial record. If you are unsure about the process or need expert guidance, consider consulting a tax professional to walk you through the process. Remember, timely ITR filing ITR helps you avoid penalties and helps you build a stronger financial future.
 

FAQs

1. Do I need to file an ITR?3
 

Filing your ITR becomes mandatory in case your income exceeds the basic exemption limit set by the government.

2. Which at documents are needed to file the ITR?2
 

You need to submit form 16, PAN Card, Aadhaar Card, Form-16A/ Form-16B/ Form- 16C (if applicable), Bank account details, bank statement/passbook, Form 26AS s and Annual Information Statement (AIS)/ Taxpayer Information Statement (TIS).

Home loan statement, tax savings instruments, capital gains detail, rental income, foreign income, dividend income, interest certificate (if applicable).

References

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Disclaimers:
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The views stated in this article are not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions. Bajaj Allianz Life Insurance Company Ltd., Regd. office Address: Bajaj Allianz House, Airport Road, Yerawada, Pune - 411006, Reg. No.: 116, CIN: U66010PN2001PLC015959, Call us on toll free No.: 1800 209 7272, Mail us: customercare@bajajallianz.co.in

Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility

BJAZ-WEB-ECNF-13130/25

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Disclaimer

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

 

Please refer to BALIC Privacy Policy

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%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Disclaimer

Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116


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^Subject to Section 10 (10D) conditions i.e. aggregate annual premium for ULIP policies issued on or after 1st February 2021 does not exceed Rs. 2.5 Lakhs.

1Minimum premium mentioned is applicable for Bajaj Allianz Life Goal Assure IV - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L204V01) and is subject to policy terms and conditions.

#Source: https://economictimes.indiatimes.com/investments-marts/eight-crucial-numbers-to-ensure-financial-success/10-times-the-annual-income-is-your-life-insurance/slideshow/16699748.cms . Subject to availability in Bajaj Allianz Life ULIP Plans. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajallianzlife.com ) carefully before concluding a sale.

*Benchmark: Nifty 500 Multicap Momentum Quality 50 Index past 5 CAGR Returns, as on 31st December 2024. Past returns of a fund are not necessarily indicative of the future performance of the fund. | Please consult the financial advisor before investing.

The Unit Linked Insurance Products do not offer any liquidity during the first five years of the contract. The policyholder will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of the fifth year.

ULIPs are different from the traditional insurance products and are subject to the risk factors. The premium paid in ULIPs are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. Bajaj Allianz Life Insurance Company Limited is only the name of the Life Insurance Company and Bajaj Allianz Life Future Wealth Gain IV - A Unit- linked Non- Participating Individual Life Savings Insurance Plan (UIN:116L202V01), Bajaj Allianz Life Goal Assure IV - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L204V01), Bajaj Allianz Life LongLife Goal III is A Unit-linked Non-Participating Whole Life Insurance Plan (UIN:116L203V01), Bajaj Allianz Life Invest Protect Goal III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L205V01), Bajaj Allianz Life Magnum Fortune Plus III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L207V01), Bajaj Allianz Life Goal Based Saving III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN:116L206V01) and Bajaj Allianz Life Smart Wealth Goal V - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L201V01) are only the name of the unit linked insurance contracts and does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajallianzlife.com ) carefully before concluding a sale.

Nifty 500 Multicap Momentum Quality 50 Index Fund is available Bajaj Allianz Life Future Wealth Gain IV - A Unit- linked Non- Participating Individual Life Savings Insurance Plan (UIN:116L202V01), Bajaj Allianz Life Goal Assure IV - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L204V01), Bajaj Allianz Life LongLife Goal III is A Unit-linked Non-Participating Whole Life Insurance Plan (UIN:116L203V01), Bajaj Allianz Life Invest Protect Goal III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L205V01), Bajaj Allianz Life Magnum Fortune Plus III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L207V01), Bajaj Allianz Life Goal Based Saving III - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN:116L206V01) and Bajaj Allianz Life Smart Wealth Goal V - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L201V01)

In addition to the already existing funds, Nifty 500 Multicap Momentum Quality 50 Index Fund is now available with the above mentioned products. Customer has an option to choose from other available funds apart from Nifty 500 Multicap Momentum Quality 50 Index Fund.

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I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any Call made, including via Voice over Internet Protocol & WhatsApp, SMS or WhatsApp messages, in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

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