Efiling: Here is everything you need to know about income tax india efiling including how to file ITR Online to importance & types of efiling income tax at Moneycontrol.
Income Tax return refers to tax form or forms an individual uses to file Income Tax with the Income Tax department. It is a way to inform the government about the money you have earned during a financial year and the taxes you have paid.
According to the Income Tax Act, Income Tax returns must be filed every year by an individual or business for all sorts of income one has received in that year which could be through wages, dividends, interest, capital gains and other sources. Such income needs to be above a basic exemption limit. If the returns show that one has paid excess tax during a given financial year, one is eligible for returns. In this article, we will focus on Income Tax returns for individual assessees.
About e-Filing of Income Tax returns
E-Filing or electronic filing is simply filing your Income Tax returns online. The traditional method to file returns is the offline way where one needs to go to the income tax department’s office or a bank branch to physically file returns.
Filing your tax returns through the Internet or online is an easier process because one does not need to take a physical print out of the documents. Also, it is a simple process and can be done for free online through the Income Tax Department’s website https://www.incometaxindiaefiling.gov.in.
Types of e-Filing
There are three types of e-Filing. Let us take a look.
The first option is to file your returns electronically without the digital signature certificate (DSC). In this case, ITR-V form is generated. The form should be printed, signed and submitted to CPC or Income Tax Department Centralized Processing Centre, Bangalore using an ordinary post or speed post within 120 days of e-Filing. There is no further action required once the ITR V form is submitted.
The second option is to e-File the Income Tax Return through an e-Return Intermediary ( ERI) with or without DSC.
The third option is to use DSC or Electronic Verification Code (EVC )to e-File in which case no further action is needed.
Remember that you can choose any one of these options to e-File your returns.
Importance of ITR Filing
Now we will look into the importance of ITR filing. There are several reasons to file your Income Tax returns.
It shows that you are a responsible citizen: According to Income Tax law, individuals who earn a specified amount of income every year are required to file a tax return within due date. The tax calculated under the Income Tax laws must be paid by the individual. If you fail to file IT returns and to pay tax to the government, you will be penalised. Individuals who earn an income less than the specified limit may also voluntarily file returns. So filing your returns is a sign that you are a responsible citizen.
It is required to get a loan or a credit card
When applying for a loan or a credit card, one of the things that the banks check is your financial position. If you have filed your Income Tax returns regularly, it is proof that you have a regular income and have paid taxes on it. Financial institutions like banks will insist on seeing your IT returns for the last few years before giving you a home loan, a car loan or a credit card. Insurance companies may also ask for IT receipts when you are buying term insurance of a higher amount. For this reason you should file your income tax returns even though it is voluntary as it gives you a strong financial standing.
You can claim tax deductions: The Income Tax Act allows an individual to claim several deductions to reduce one’s tax outgo. These deductions are a legal way of minimising your taxes and maximising your income. However, to claim these deductions under various sections of the Income Tax Act, it is important to file your Income Tax returns every year.
You can claim tax returns: In many cases, due to tax deductions or TDS getting deducted on your income you are eligible for a refund from the Income Tax department. Filing your returns is crucial if you want to eligible for a refund. Once you have filed your return you can claim your refund if you are eligible for it.
You can adjust your capital gains and losses: If you are heavily into investing in equities, filing your Income Tax returns is extremely important for you. This is because capital losses can be adjusted against capital gains. Also as a taxpayer, you can ensure that in case you have any capital loss, you can carry it forward for the next eight consecutive financial years if you file your Income Tax returns regularly.
Tax returns are required for Visa processing: If you are travelling abroad and applying for a Visa, the foreign consulate would require proof of your income. You will be asked for Income Tax receipts for a certain period like six months to three years for the same. This is even more important if you are planning to travel to USA, Canada, Europe and Great Britain.
How to File Income Tax Returns
You can submit Income Tax returns both online and offline. From the financial year 2013-14 all taxpayers earning more Rs 5 lakh must file their returns electronically.
You can file your returns online through the e-Filing website of the Government of India www.incometaxindiaefiling.gov.in
There are two ways to file Income Tax returns online.
One of the ways is to download the ITR preparation software, prepare the return using the downloaded software, generate the XML and then upload it. The other is to directly enter details in an online form and submit it.
First, let us take a look at the steps to follow if you are using the first method.
Step 1: From the ‘Downloads’ page, download the ITR preparation software for the relevant assessment year to your PC or laptop.Step 2: Prepare your return using the downloaded software the following way.
- Gather all the relevant information regarding income; taxes paid, deductions availed, and so on.
- By using the pre-fill button, fill up personal details and tax payments. Compare with the information you have to check that there are no mistakes and nothing is left out
- Enter all the relevant data and then click ‘Calculate’ to calculate the tax and interest liability and also the how much tax you need to pay or refund you are entitled to.
- If taxes are to be paid to pay it immediately and enter the details appropriately. Repeat the above step so that the tax payable is nil.
- Generate and save the Income Tax return data in the XML format in your PC or laptop.
Step3: Login to the e-Filing website with a User ID, Password, Date of Birth/ Date of Incorporation and enter the captcha code.
Step 4: Go to e-File and ‘upload return’.
Step 5: Select the appropriate ITR, Assessment Year, and XML file previously saved
Step 6: Upload using a digital signature ( DSC), if applicable. Ensure that the DSC is registered with e-Filing.
Step 7: Click on the ‘submit’ button
Step 8: When a submission is successful, ITR-V is displayed (if you have not used DSC). Click on the link and download the ITR-V. The ITR-V is also sent to you via your registered email. After you upload the ITR-V with DSC, the return filing is complete.
In another scenario, when the return is not uploaded with DSC, the ITR-V form should be printed, signed and submitted and submitted to the CPC within 120 days of e-Filing. Only once the ITR-V is received, will the return be processed. The Income Tax Department will send you email and SMS reminders reminding you of non-receipt of ITR-V.
How to File Income Tax Returns Online
The other way to file Income Tax returns online directly enters the details in the form and submit it. Here are the steps to follow. Remember that only ITR 1 and ITR 4 can be filed online without having to download any software. Here are the steps to follow.
Step 1: Login to the e-Filing website with a User ID, password, Date of Birth / Date of incorporation and captcha.
Step 2: Go to ‘e-File’ and click on ‘Prepare and submit ITR online’.
Step 3: Select the Income Tax return Form ITR/ ITR 4 and assessment year
Step 4: Fill in the details and click the ‘Submit’ button
Step 5: Upload a digital signature if applicable. Ensure that DSC is registered with e-Filing.
Step 6: Click on the ‘Submit’ button
Step 7: On successful submission for form, ITR-V would be displayed ( if DSC is not used). Click on the link to download the ITR-V. ITR-V will also be sent to the registered email. If ITR-V is uploaded with DSC, the return filing process is complete.
If the return is not uploaded with DSC, the ITR-V form should be printed, signed and submitted to CPC within 120 days from the date of e-Filing. The return will be processed only after the signed ITR-V is received. Check your email and SMS regularly for reminders on the non-receipt of ITR-V.
The process of filing your returns online is now complete.
Apart from filing your Income Tax returns online through the e-Filing website of the Income Tax Department, Government of India, you may also use one of the several tax filing portals available. While these tax filing portals have a basic free or low-cost plan, there are several CA assisted plans depending on the kind of income you have, whether it is salaried income, property income, capital gains, foreign income and so on. Using these CA assisted Income Tax filing plans is more convenient as a CA assists you in filling the relevant details, preparing your form and submitting your tax returns.
You can also approach a chartered accountant offline and ask him to prepare your tax returns and file them for you online. Expert help is recommended as a mistake in tax filing can lead to complications later.
About ITR forms (Types of ITR Forms List and Explanation)
There are different ITR forms that a taxpayer needs to fulfil. These forms can be downloaded from the e-Filing website of the Income Tax department. When filing returns, a taxpayer needs to determine which ITR form he needs to fill depending on his type of income.
ITR -1, ITR-2, ITR-3 and ITR-4 apply to individuals, while other ITR forms apply to firms and companies. We look at those ITR forms that apply to individuals.
ITR1(Sahaj): Residents who have a total income of up to Rs 50 lakh, have income from salary, from one house property, other sources (interest) and agricultural income up to Rs 5,000 have to use ITR-1 to file their returns. Non-residents cannot file ITR-1 irrespective of their income. Persons who are a director of a company and who has held any unlisted equity shares anytime during the financial year also cannot file ITR-1.
ITR 2: ITR-2 can be used to report all types of income other than income from business or profession. It applies to residents who are not eligible for ITR -1 and those who have a total income of above Rs 50 lakh. ITR 2 is also applicable to a non –resident or a director in any company or one who has invested in unlisted equity shares any time during the financial year, even if their income is less than Rs 50 lakh. Those with income from more than one house property also need to file ITR-2.
ITR 3: ITR-3 is meant especially for those taxpayers who earn profits and gains from business or profession and who is not eligible to file ITR -1, ITR2- or ITR-4 (Sugam). The assessee can have income from a partnership firm but cannot have any income from proprietary business or profession, in which case ITR-4 is applicable. The income he receives should not include any income other than by way of interest, salary, bonus, commission or remuneration received by him from the firm.
ITR-4 Sugam: ITR-4(Sugam) can be used by individuals who conduct business or earn income through a profession. They can have a total income of up to Rs 50 lakh. Such taxpayers should have opted for the presumptive income from a business or profession as per sections 44AD, 44ADA or 44AE. While ITR 3 does not apply to those who have income from proprietary business or profession, ITR 4 applies to these cases. Those who have presumptive income but also have directorship in companies or hold unlisted shares in companies are not eligible to use ITR-4 and need to file ITR-3.
Who needs to file an Income Tax Return?
If you are an individual and fall in any of the categories, you would need to file Income Tax returns.
One needs to file Income Tax Returns in case one’s income falls above the taxable limit.
If you are less than 60 years old and your annual gross income exceeds Rs 2.5 lakh you are required to file Income Tax returns. According to budget 2019, there will be no tax liability if your taxable income is Rs 5 lakh or less, but you would still need to file ITR if your income exceeds the basic exemption limit. In the case of a senior citizen between 60 and 80 years of age, this limit is Rs 3 lakh. If you are a super senior citizen aged 80 years or above you have to file IT returns if your total gross income exceeds Rs 5 lakh in a financial year.
If you have deposited TDS or advance tax and want to claim tax refunds, e-Filing of returns is also mandatory. Also, if you want to carry forward a loss under a head of income, you are required to file your Income Tax returns.
If you are an Indian resident and possess a financial asset outside India, you are required to file IT returns even if your income is not taxable. You also need to file ITR if you are an Indian citizen and act as a signing authority for any foreign account.
If you have undertaken high-value transactions like purchasing or selling a property, a luxury car, or do high-value transactions in shares and mutual funds, or spent a high amount on your credit card or done cash transactions of very high value, you would need to file IT returns as the IT department may be having you under scrutiny.
As we have seen earlier, if you have incurred capital losses, you can carry forward your losses for eight consecutive years and set it off against future gains and income. However, for that, it is mandatory that you file your IT returns for all these years. Even if your income is not the taxable filing of IT returns is thus required.
You also need to file your IT returns if you have received income from a property held under any trust for charitable or religious purposes.
If you want to avail a loan, filing you're IT returns is vital as the bank or the lending institution will want to look at your IT returns.
Documents Required for ITR Filing
While one does not require to submit any document to the Income Tax department; one needs to keep the following records ready when filing income tax returns.
If you are a salaried employee, the most important document to file your ITR is Form 16. Essentially Form 16 is a certificate provided by your employer that provides details of the salary you have earned during the year and the TDS that has been deducted. Form 16 takes into account your salary, allowances and deductions. You also need to keep your salary slips ready.
According to Income Tax laws, interest from the fixed deposit and recurring deposit is taxable, and you pay taxes as per applicable tax rate. Interest on a savings account is also taxable, post deduction that is available under section 80TTA of a maximum of Rs 10,000 per year. For this purpose, you would require the bank statement or passbook for interest on your savings account and interest certificates or TDS certificates from banks and Post offices for fixed deposits
Form 16A, 16B and 16C are also documents you may require. Form 16A reflects the TDS deduction from income other than salary; Form 16B is a TDS certificate which reflects that the amount deducted as TDS on the property by the buyer and Form 16C is the TDS certificate that reflects the amount of TDS on rent. This applies to individuals who pay a rent of more than Rs 50,000 per month.
Another document you require is Form 26AS which is a consolidated record of the various taxes deducted from your income by the deductor which could be your employer, bank, or a tenant as the case may be and deposited with the You can cross check TDS deductions mentioned in form 16A and Form 16B by referring to Form 26AS. Form 26AS can be downloaded through netbanking if PAN is mapped to that particular account.The Income Tax Act allows one to claim various deductions as expenses. In case one is a salaried person and has already submitted these documents to the employer, they are not further needed during filing of income tax returns. However if one is not a salaried person, these are some of the documents that would be required to claim deductions under Section 80C. This would however depend from person to person.
- Life Insurance premium receipts
- Public provident fund contribution receipts
- Receipt of subscription to ELSS mutual funds
- Receipt of provident fund contribution
- Senior Citizen Savings Scheme receipts
- Receipt of 5 year Bank FDs
- Receipt of tuition fees
- Receipt of investment in National Pension Scheme
- Receipt of contribution made to ULIPs
- Receipt of principal repayment on your home loan
Health insurance premium certificates for self and parents, interest certificate on education loans and loan statement from bank or NBFC if you have a home loan are also other documents you may need.
How to Check Income Tax Return Status?
The Income Tax Department has been making an effort so that the taxpayer can access all its services online. You can not only submit your IT returns online, you can check the status of your Income Tax return online through the Income Tax India e-Filing website www.incometaxindiaefiling.gov.in. Checking the status of your Income Tax returns online is a simple process. This lets you track your Income Tax return status online in a few clicks.There are two options to check your Income Tax return online. For one you need your tax filing acknowledgement number and your PAN number. The other way is to login to the e-Filing website of the Income Tax Department, Government of India using your login id and password and then check the status of your IT returns.
With your acknowledgement number and PAN numberHere are the steps to check your Income Tax return status using your acknowledgement number.
- Go to the Income Tax India e-Filing website www.incometaxindiaefiling.gov.in and click on ITR status
- It opens into a new page where you are asked to enter PAN number, acknowledgement number and captcha code. Visually challenged users can use the OTP option instead of captcha. The OTP is received on the mobile
- After you fill in the details, press submit and the status is displayed on your screen
By logging in to the eFiling websiteYou can also check your Income Tax return status by logging into the Income Tax India e-Filing website. Here are the steps.
- Login to the Income Tax India eFiling website www.incometaxindiaefiling.gov.in with your login credentials. You can register yourself in case you do not have an account
- On the dashboard, you will see an option ‘Returns / Forms ‘
- You will be taken to a new page. Here from a dropdown menu select Income Tax returns and the Assessment year for which you want to check the IT returns status and click ‘Submit.’
- On clicking on submitting the status of your IT return will be displayed on the screen.
Income Tax Return Due Dates
It is important to file your taxes on time because it saves you paying penalties and helps you keep your finances in order. Here are some important dates you should mark in your calendar.First is important to know what we mean by financial year and assessment year. The financial year starts from April 1 and ends of March 31. The financial year 2019-20 for example started on April 1 2019 and will end on March 31 2020. An assessment year is the year which follows the financial year wherein the Income of the Financial Year is assessed. For example, in the assessment year 2019-2020, you will be filing returns for FY 2018-19. Now let us take a look at some important due dates.
July 31: Due date for filing income tax returnsYou must file your Income Tax returns for the financial year that ends on March 31 by July 31 of the same year. In some cases, an extension might be provided.
March 31 (of AY): Due date for filing late income tax returns or revised returnsIf an assessee is unable to file returns by the due date, the assessee can still file belated returns within a period of one year from the assessment year or before the completion or conclusion of the assessment as per Section 144, depending on which takes place earlier. For example, if you have not filed your returns for FY2018-19(AY19-20) by July 31, then you can file late returns up to March 31, 2020, or on completion of assessment by the assessing officer, whichever is earlier. However, would have to pay a late fee of up to Rs 10,000 in that case.
March 31 (of FY): Due date for making tax-saving investmentsAll tax saving investments like in PPF, ELSS, Tax Saving FDs and so on need to be completed by March 31 of the financial year to claim deductions. However remember that you should start your tax saving investments as soon as the financial year begins so that there is no rush at when the due date approaches.
Due dates to pay advance taxes
|Due Date||Advance Tax Payable|
|15 June||15% of advance tax less advance tax already paid|
|15 Septmeber||45% of advance tax less advance tax already paid|
|15 December||75% of advance tax less advance tax already paid|
|15 March||100% of advance tax less advance tax already paid|
If you are a salaried individual and your source of income is your salary, you do not need to pay advance taxes since your employer deducts tax at source. But if you are self employed and have other sources of income, you need to pay advance tax.It is mandatory to pay your taxes in quarterly installments if your tax payable is more than Rs 10,000 annually or if you have any income under the head profits/ gains from business profession.
Last date for submission of investment declaration to avoid TDS
Mach 31 of a financial year is the last date by which you need to declare your investments to your employer. However you need to provide proof only by February next year. Some of these declarations would include:
Eligible deductions through investments
Interest on home loans , if any
Deductions for medical insurance, education loan interest and so on.
What is Income Tax return?Income Tax Return or ITR is a prescribed form through which the details of income earned by a person in a financial year and the taxes paid on such income is communicated to the Income Tax department. It also allows a taxpayer to carry forward losses and claim refunds from the Income Tax department.
Do I need to file returns even if my company has deducted tax on my salary?Yes. Even if tax is deducted at the source and you do not have to pay any more tax to the Government, it is still mandatory to file returns if your income exceeds the exemption limit.
What is ITR verification?Once you have filed your Income Tax returns, you need to verify it. Only once the IT return is verified by the taxpayer, it is considered valid. You can verify you IT returns in several ways. You can print it, sign it and send it to the Centralised Processing Centre, Bengaluru. You can also verify it using an electronic verification code ( EVC), netbaking, ATM or through your bank account.
What is ITR-V?ITR-V stands for Income Tax Return verification form. It is a single page document that you receive when ITR is filed online without using a digital signature. On receipt of ITR-V you have to sign the copy and submit to the Income Tax department for verification.
What will happen if I do not file my returns by the due date?
If you do not file your returns by the due date, the Income Tax department will penalise you. According to the amended rules of Section 234F which came into effect from April 1, 2017, delay in payment of Income Tax returns can mean that you are liable to pay up to Rs 10,000 as penalty depending on when you file Income Tax your returns.
Also, if you are late in filing your returns, you also have to pay interest on the unpaid tax. This interest will be calculated on the outstanding tax and will increase with the delay in filing returns.A delay in filing IT returns would further mean that the taxpayer will lose certain other privileges he is entitled to.
Is it necessary to attach documents when filing Income Tax returns?No. It is not required to attach any documents like proof of investment, TDS certificates and so on when filing Income Tax returns whether filed manually or electronically. The taxpayer would need to refer to these documents when filing his Income Tax return. However, such documents should be produced before the tax authorities in case of assessment or inquiry.
How to file Income Tax returns electronically?Taxpayers can log on to the filing portal set up by the Income Tax department to file their returns electronically. E-Filing is mandatory for an assessee if he is claiming a refund or whose total income exceeds Rs 5,00,000.
Is there any e-Filing helpdesk provided by the Government?
In case of queries on e-filing of return, the taxpayer can contact 1800 180 1961.Disclaimer: Note that the Union Budget 2019 is going to be presented in the first week of July and some of the information mentioned above may be subject to change.