Income Tax e-Filing – A Step By Step Guide to Filing Income Tax Return Online
Filing income tax return is mandatory for every eligible taxpayer in India. However, the government of India has made this process simpler and more transparent by introducing the option of e-filing income tax returns. To know the details of filing income tax returns online, read on.
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The Income Tax Act, Section 139(1), 1961 mandates all eligible taxpayers to file their income tax returns (ITR) annually. The procedure to file income tax has been made electronic by the Government of India so as to reduce hassle as well as increase transparency. This process is referred to as e-filing the income tax returns.
The government has allowed income tax returns to be filed either offline or online. The offline method requires taxpayers to manually file the returns by visiting the Income Tax Department. The online method or e-filing method allows the taxpayer to file returns on the government portal through the internet.
E-filing of income tax returns was introduced as advancement in technology so as to make the return filing process easier for the taxpayers. It can be done from the comfort of one’s home without the involvement of tedious paperwork.
Income tax returns can be e-filed using:
- Digital Signature Certificate (DSC): It is compulsory to e-file ITR with through a DSC of a Chartered Accountant.
- Form ITR-V: In case ITR is e-filed without a DSC, the form ITR-V will be generated. This form will have to be printed, signed, and submitted by speed post to Centralized Processing Centre, Bangalore within 120 days of e-filing.
- E-return Intermediary (ERI): With or without a DSC, ITR can be e-filed using an ERI.
The last date for filing ITR online or offline is July 31st of the Financial Year immediately succeeding the one for which returns are to be filed. Due date for filing returns of Financial Year 2018-19 is 31st July, 2019.
Firstly, it is important to know the eligibility of the taxpayer before filing income tax returns. As per the Income Tax Act, the following conditions apply to mandate taxpayers for filing income tax in India:
- As per the age, individuals are mandated for filing income tax if their gross annual income is more than the amount shown:
- Less than 60 years: Rs. 2.5 lakhs
- More than 60 years but less than 80 years: Rs. 3 lakhs
- More than 80 years: Rs. 5 lakhs
- If they earn income through sources other than salary (such as house property, etc.)
- If they wish to claim a refund from the department on income tax paid
- If they want to apply for a loan or visa
- For all businesses regardless of their profit or loss
Once the taxpayer has found their income slab, s/he will have to choose the form which rightly fits to their category in order to file income tax. Various ITR forms are shown below as per their categories:
- ITR 1 (Sahaj): For individuals who earn income through salary and interest
- ITR 2: For individuals and HUFs which do not earn an income from a business or profession
- ITR 3: For individuals and HUFs who are partners in a business and do not run a business or profession under a sole proprietor
- ITR 4: For individuals and HUFs who earn income from a business or profession under a sole proprietor
- ITR 4S (Sugam): For individuals and HUFs who earn income from a presumptive business
- ITR 5: For firms, LLPs, BOIs, and AOPs
- ITR 6: For companies except the ones which have claimed exemption under Section 11 of the Income Tax Act
- ITR 7: For individuals and companies which are required to file their returns under Sections 139(4A), 139(4B), 139(4C), 139(4D), 139(4E), or 139(4F) of the Income Tax Act.
The following documents will be required by the taxpayer so as to e-file income tax returns:
- Personal details: name, PAN, bank account details, etc.
- Proof of income from salary: copies of rent receipts for claiming HRA, pay slips, Form 16, Form 26AS, TDS certificate
- Proof of income from house property: house property address; co-owners details including their PAN and share in the said property; home loan interest certificate; construction completion date of any property purchased while under construction; tenant’s name and income earned from rent if the property is rented.
- Proof of capital gains: statement of stock trading and purchase details of capital gained by selling shares; sold property’s sale price, purchase price, registration details, and details of its capital gains; mutual fund statement details, sale and purchase of debt funds, equity funds, SIPs and ELSS.
- Proof of other income: income earned from interest, along with bank account statements if interest is collected in savings account; income earned from interest through corporate bonds and tax-saving bonds; details of income earned from deposit made in post-office.
Filing income tax returns online is an easy process which can be completed by following these simple steps:
Step 1 – Log in to the Income Tax E-filing website and register yourself. Your used ID will be your PAN.
Step 2 – View Form 26AS or your tax credit statement. The TDS figures in your Form 16 and Form 26AS should match with each other.
Step 3 – Click on “Income Tax Return Forms” and enter your financial year.
Step 4 – Select and download your ITR form according to your taxpayer category.
Step 5 – Keep all your documents ready and make sure they all match with each other. In case your income is more than Rs. 50 lakhs, fill out an additional column ‘AL’ by entering the value of your Assets and Liabilities in it and declaring the cost of your assets.
Step 6 – Fill and Upload: The ITR form can be filed offline as well as online:
- To fill the form offline, download the form, fill the details, click “Generate XML”, and then go online to the website and select “Upload XML”. Then click “Submit”.
- To fill the form online, stay connected with your internet and e-file your form by entering required details and submitting the form online.
Step 7 – Verify ITR-V: Upon submitting the ITR form, your will be generated an acknowledgement number.
- If you have e-filed the returns using a DSC, you will have to save this number.
- If you have e-filed the returns without using a DSC, ITR-V will be generated and e-mailed to your registered e-mail address. Verify ITR-V online or by mailing a signed copy of your ITR-V to the department’s Centralized Processing Centre, Bangalore within 120 days of e-filing income tax returns. The process of filing ITR will be complete once your ITR-V gets verified.