What is income tax status?

The amount you have to pay in income tax is determined by your tax return status which, in turn, is determined by your residential status. It is important to check your income tax status when filing your income tax return. There are 2 broad categories of residential status based on which tax is levied:

1. Resident

         - Ordinary resident

         - Not-ordinary resident

2. Non-Resident

How to check your tax return status

Your residential status is determined by how many days you have been resident in India during the financial year and for a pre-determined number of preceding years. If you have spent time outside the country during the financial year in question or for years before that, it is important to clarify your tax status. You can either go online to check your status on the income tax department’s website or you can consult a tax professional. Some of the provisions on residential status can be quite detailed so it is important to make sure that you clarify that you have rightly identified your status.

There is no correlation between citizenship and residential status. For example, an Indian citizen may not be resident in India, while a citizen of a foreign country might be a resident of India. Ordinary Residents have the maximum tax liability, followed by Not-Ordinary Residents, and the least tax liability is enjoyed by Non-Residents. Again, make sure that you check your income tax status at the income tax department’s website or consult a tax professional.

What is an income tax return? 

Your income tax return (known as return of income) is a prescribed form that is completed by you and communicates to the government the details of your income for the financial year and the taxes paid on the income. There are different forms for stating the return of income depending on the status and nature of the income.

It is very important to stress that there should be no falsification or deliberate withholding of information on your income tax return.

Additional Reading: 8 common mistakes while filing your tax returns

Help with preparing IT returns

Calculating your tax payment can be a challenging task, especially since it is important to avoid any errors while filling your form.  Using an online Income Tax Calculator tool will make the task quicker and easier. The tool will guide you on how to compute your income and the tax due. More and more people are turning to Income Tax Calculators for the ease and simplicity of calculating their tax payment.

Alternatively, you could contact the PRO of your local tax office for help or approach Tax Return Preparers (TRPs). You could consult with tax professionals who can offer expert help.