How to File an Income Tax Return

Mandated by the Income Tax Department of India, filing an income tax return is a process of reporting your gross taxable income from all sources, while also mentioning various tax deductions and thereby declaring your net tax liability. As a taxpayer, you can file your income tax return online (e-filing) on the official website of Income Tax Department.

It’s a common misconception that the e-filing of income tax on the income tax website is a tedious process. If the taxpayer follows guidelines properly and fulfills all the necessary steps in the filing process, it becomes a fast and smooth procedure.

Here’s how you can perform the e-filing of your income tax returns accurately.

First things first, keep all of the necessary documents ready and handy. These documents may include Form 16/16A which you receive from your employer, Form 26AS which can be downloaded from TRACES, proof of investment and loan certificates received from your insurer or bank.

 

What is Form 16 &16A? Form 16 is a certificate provided by the employer in order to certify your annual salary, allowances and the TDS deducted.

 

What is Form 26AS? This form contains consolidated information on all taxes that have been deducted on your income by tax collectors, any advance or self-assessment taxes paid and tax refunds, among others.

To e-file ITR accurately, the next step is to understand which ITR form applies to you. One of the following forms needs to be checked and filled, depending on your income sources and the income earned, in order to file income tax online.

 

ITR 1: Resident individuals with incomes from salary or pension, one residential property, other sources or agricultural income up to INR 5,000 can fill in this form. Total income must be less than INR 50 Lacs.

 

ITR 2: Resident individuals with income from salary or pension, one residential property, or other sources can fill in this form. Total income must exceed INR 50 Lacs. Agricultural income must be above INR 5,000. If another individual’s income is clubbed with the assessee’s, this form can be used. Those who have invested in unlisted equity shares or the ones posing as an individual director of a company are eligible to file ITR 2.

 

ITR 3: Resident Individuals with incomes from profession or business sources, one residential property, or other sources can file this return. Those who have invested in unlisted equity shares or those serving as an individual director of a company are eligible. Those who are a partner in a firm can file ITR 3. If your business turnover is beyond INR 2 Crores, file ITR 3.

 

ITR 4: Resident individuals, Hindu Undivided Family (HUFs) and Partnership Firms other than LLP (Limited Liability Partnership) with incomes from profession or business can file this return. If you have signed up for any income schemes under Section 44AD, 44ADA, and 44AE, you can file ITR 4.

 

ITR 5: Firms, Limited Liability Partnership (LLP), Artificial Juridical Person (AJP), Body of Individuals (BOI) and Association of Persons (AOP) are eligible to file this form. Also, business trusts, the estate of the deceased, and estate of insolvent and investment funds can file ITR 5.

 

ITR 6: Those companies who have not claimed a tax exemption under section 11 (income from the property based on a charity or religious establishment) have to file ITR 6.

 

ITR 7: If persons/companies (trusts) are required to furnish ITR under either of the sections 139(4A), 139(4B), 139(4C), 139(4D), 139(4E), 139(4F), they must file ITR 7.

 

The third step is to use an income tax calculator. It is important for a taxpayer to follow this step and find the amount of tax refund and liability applicable. An income tax calculator will also help compute any deductions or exemptions you are eligible for. The deadline for investing in tax saving instruments in order to qualify for deductions or exemptions is March 31, 2020. If you’re looking to do some last minute tax-saving, you can invest in instruments like ULIPs (Unit Linked Insurance Plans), which are insurance-cum-investment products that come under EEE (Exempt-Exempt-Exempt) status. The ULIPs on Bajaj Markets can not only help you save tax but also offer exciting perks like the top-rated rated funds in the market, zero allocation charges and the flexibility of switching your funds, as per your risk appetite and investment horizon.

Now that the above steps are in place, visit the official Income Tax e-filing website, to start filing. Register yourself on the e-filing portal; basic personal information like user type, name, birth details, PAN, residential status will be required if this is your first time filing an income tax return. If not, log-in to your account using your PAN, password and a captcha.

Select the assessment year you want to file the ITR for, and then choose the ITR form you are eligible to file. You will then be redirected to a web-page where you can fill details in the chosen form only after reading through the General Instructions. Fill your General Information. Once done, enter the Income Details and Tax Details. Carefully fill the details under the Taxes Paid and Verification section.

Go through the details entered once again thoroughly before submitting by clicking on the Preview button.

Click on Submit to upload your ITR. This doesn’t complete the process of e-filing your income tax return. To complete the process, e-verify your return by using an Aadhar OTP or EVC. You can also choose to verify the return offline by sending ITR-V signed printout to the CPC, Bengaluru. A 120 days (from the date of income tax return filing) deadline is effective if you wish to verify the return offline.

An acknowledgement will be sent to your registered email address. It will be available on the website for you to download. Upon successful verification of the ITR, you will be notified by the Income Tax Department via email or SMS. This will officially mark the completion of filing the income tax return. If followed correctly, the e-filing process is quite easy and smooth.