All about Income Tax Return ITR Filing
Filing IT returns may sound like a difficult process, but in reality, it is not. Here is a complete guide on how to file an IT return.
How to File Income Tax Return ITR?
The income tax return is a form where taxpayers state their tax liability and deductions according to the form’s category and demand. This form is available in ranges, ITR-1 to ITR-7.
When an individual fills the respective form and submits it to the IT Department, she/he has filed an income tax return. But how? Let us tell you about this process.
An income tax return can be filed both via online and offline methods. We will start with the online IT return filing method first.
Step-by-step process to file an IT return online
- Step-1- Visit Income Tax Department’s official portal.
- Step-2- Register with PAN, which is your user ID. Registered users can click on ‘Login Here.’
- Step-3- Navigate to e-file and click on ‘Income Tax Return.’
- Step-4- From the drop-down menu, choose the ITR form number and AY. You have to select “Original/Revised Return’ as the filing type, and ‘Prepare and Submit Online’ as the submission mode.
- Step-5- Click on ‘Continue.’
- Step-6- Fill in the essential details demanded in that ITR form.
- Step-7- Calculate the payable tax.
- Step-8- From the ‘Taxes Paid and Verification’ tab, select the relevant option.
- Step-9- Next, select ‘Preview and Submit.’
- Step-10- Complete the verification process either by Aadhaar OTP, electronic verification code (EVC) through details of bank account, bank ATM, details of Demat account, or by dispatching a filled ITR-5 (either speed post or normal) to the IT Department.
- Step-11- For final submission, type OTP/EVC sent to your registered mobile number within its validity period and follow such instructions to submit.
If you are not comfortable with filing IT returns online, you can easily take the old school/conventional method, i.e., the offline process.
Step-by-step process to file IT returns offline
The process of how to file ITR step-by-step involves an individual having to download the applicable form, fill in the mandatory details offline and save and upload the newly generated XML file.
However, this method requires downloading one of the following ITR utilities –
- Excel Utility
- Java Utility
Follow these steps mentioned below to file an income tax return offline.
- Step-1- Visit the official e-filing portal.
- Step-2- Download the relevant ITR utility under ‘Download ˃ IT Return Preparation Software.’
- Step-3- Extract the utility ZIP file that you have downloaded.
- Step-4- Open that particular utility file.
- Step-5- Provide the necessary details in the IT returns form.
- Step-6- Confirm all the tabs and compute the tax.
- Step-7- Create and save the XML file.
- Step-8- Login to the e-filing portal by providing PAN and password. Next, enter the Captcha code.
- Step-9- Select e-file.
- Step-10- Select the ‘Income Tax Return’ link.
- Step-11- Subsequently, provide details like Assessment Year, ITR form number. Next, set the filing type as ‘Original/Revised’ form as well as the ‘Submission Mode’ to XML. In this stage, the PAN will be auto-uploaded.
- Step-12- To confirm the ITR, select any of the options like ‘Aadhaar OTP,’ ‘EVC Through Bank Account Details,’ ‘Demat Account Details,’ or ‘Digital Signature Certificate’ that is present.
- Step-13- Select ‘Continue.’
- Step-14- Attach the ITR XML file.
Step-15- Depending on the selected verification option, you have to attach/provide the required file. To be precise,
- If you choose DSC as a verification option, you have to provide the signature file created from the DSC utility.
- If you select Aadhaar one-time password (OTP) as a verification option, you must provide the OTP sent to your UIDAI-registered mobile number.
- If you choose ‘EVC Through a Bank Account,’ ‘Bank ATM,’ or ‘Demat Account’ as a verification option, you have to provide an EVC number sent to your linked mobile number with the bank or Demat account.
- If you choose any other verification option, the ITR submission process will get completed; however, the procedure will not commence until the verification is complete. Thus, this is how you can submit an income tax return.
Individuals need to e-verify the submitted ITR by using the My Account ˃e-verify option. The document has to be sent to the IT Department (CPC, Bengaluru) and the individual’s signature on it.
Step-16- Click on ‘Submit’ ITR.
What are the documents required for IT Return Filing?
Here is a list of all the essential documents required for IT returns as per your income type. Find your income category and gather the documents accordingly.
Type of Employment
Form-16 (Known as tax deducted at source certificate)
Income from other sources
Bank account/bank passbook statement for interest earned on savings, Rent agreement or TDS certificate (as required), Interest or TDS certificate for bank FD interest, Dividend warrant (if income is generated from dividend), Other documentary proof (as required)
Tax savings investment
Receipt of medical insurance, Receipt of the life insurance premium paid, Fixed deposit receipt, Donation paid certificate, Tuition fee paid certificate, Education loan repayment certificate, Public Provident Fund (PPF) passbook, Mutual fund consolidated account statement (CAS)
Capital gains income
Purchase and sale deed of immovable property, Purchase and sale proof/receipts of all applicable capital assets, Contract note, Demat account statement
Income from business or profession
TDS certificates, Balance sheets, Audited financial records (as required), Income tax payment (self-assessment tax/advance tax) challan copy
Leave travel allowance
Applicable tickets and receipts of purchased tickets
Tax deduction on medical expenditure
Medical expenses bill
Receipts of rent paid
In general, here is the list of enclosures to be made along with IT returns –
- Salary slips
- Interest certificates from banks and post office
- Tax saving-investment proofs
- Deductions under 80D to 80U
- Capital gains
- Home loan statement from bank and NBFC
- Aadhaar card
How to file an IT Return with and without Form-16?
In filing IT returns, Form-16 plays a crucial role. Form-16 is an essential certificate that employers provide to employees with all the important details of tax deducted at source (TDS) and proper salary break up.
That is why it is the basic form that individuals should collect. However, there are some cases where an individual can apply for IT files even without Form-16.
Therefore, to clear the fog around how to file ITR with Form-16 as well as without it, we have discussed both these processes.
File ITR with Form-16
The income tax form is issued under Section 203 of the Income Tax Act. This document contains detailed information regarding salary, the components paid by an employer, and the tax exempted from the salary.
Below is discussed how to file an income tax return with Form-16.
- Step-1-Visit the official e-filing portal.
- Step-2- Register yourself, in case you have not done it yet. The PAN will be your user ID and your date of birth will be your password.
- Step-3- Generate the Form-26AS, which can be downloaded from NSDL- TIN website.
- Step-4- Download the ITR-1 form from the income tax website (if your income from salary/pension is below ₹50 lakhs), or download ITR-2 if your income from salary/pension exceeds ₹50 lakhs.
- Step-5- Fill in the ITR form with the required details. Refer to Form-16 for effective assistance. Undeclared reports or other information can easily be obtained from Form-16 and Form-26AS.
- Step-6- Fill in the income details and complete the validation process with the help of the essential documents.
- Step-7- Compute your tax liability.
- Step-8- Follow the tab displaying tax payment status (if it’s paid, yet to be paid, or to be refunded). Fill in the bank details and validate the declaration.
- Step-9- Upload the documents and click on the ‘Submit’ button.
- Step-10- Generate ITR-V (acknowledgement and verification document).
- Step-11- E-verify the details.
File ITR without Form-16
If you have not received Form-16 from your employer due to some reasons, you can continue to file an IT return. Following is how to file ITR without Form-16.
- Step-1- Identify your income from all sources. It may include salary and pensions, capital gains, income from house property, income from other sources like fixed deposit interest, interest on refund, etc.
- Step-2- Get Form-26AS (can be termed as annual tax statement). You can download it from the TRACES website of the Income Tax Department.
- Step-3- Gather data related to various payments and investments and claim deduction under Section 80C and 80D of the Income Tax Act as applicable.
- Step-4- The next step in the process of how to file an income tax return without Form-16 involves claiming House Rent Allowance (HRA) and other allowances.
- Step-5- After the deduction and claim are decided, the total taxable income has to be calculated. You can calculate the total taxable amount by subtracting the total deductions (that is to be claimed) from the total income (earned in the respective FY).
- Step-6- Next, calculate the tax liability per the applicable slab rate.
- Step-7- Determine the payable tax.
- Step-8- After you have finished doing all the above-mentioned steps, you can visit the official e-filing portal.
- Step-9- File ITR returns without Form-16.
- Step-10- Once you have completed filing ITR, you need to e-verify it.
If you complete all the procedures and do not e-verify, the submission will not start.
What are the Benefits of Filing Income Tax Returns?
Income tax is the money/amount you pay that comes as a boon and helps build the nation with more uniformity.
On top of that, you can avail a host of benefits by filing IT returns. Read along!
- Hassle-free loan approval- Filing IT returns helps get easy approval on various financial products like two-wheeler or four-wheeler loans, business loans, etc. Major financial institutions can ask for a copy of IT returns while verifying the documents.
- Fast visa processing- If you are willing to travel overseas, the foreign consulate demands ITR receipts of the previous two years at the time of interview. Moreover, some embassies even ask to furnish the previous three years’ IT returns. Hence, filing for an IT return will facilitate faster visa processing without any trouble.
- Income and address proof- Another major benefit of filing an IT return is that, at times, it works as an address proof.
- Avoid penalty- If you are due to file an IT return but have not filed yet, you may incur a hefty penalty. Therefore, filing IT returns within the stipulated date can save a substantial amount.
- Claim tax deductions- If you have paid more than your actual tax liability, you can claim a refund.
- Carry forward losses- You cannot carry forward losses of the current financial year to the next financial year unless you have not filed an IT return. Therefore, it is imperative to do the same within the due date.
- Deductions on high-worth investment- When you purchase a property, the information is reported to the IT Department. Therefore, when you pay taxes and file IT returns, you can claim a deduction on the transaction and payment.
What to do if you do not File Income Tax?
If an eligible taxpayer does not file an IT return, it can spell major consequences. The tax laws can impose three to seven years of imprisonment along with a minimum penalty of 50% of the tax and interest on the tax liability from the date of receiving notice from the IT Department until the return is filed.
What is the Penalty of Non-filing of Income Tax?
According to Section 234F of the Income Tax Act, a late penalty fee for filing IT returns will be levied from FY 2018-19 onwards. If you file an IT return after the due date but before the 31st December of the Assessment Year, you will have to pay a late fine of ₹5000. In case you pay after the 31st of December of that AY, the penalty will be ₹10000. However, the late fee would not exceed ₹1000 if your income does not exceed ₹5 lakhs.
The above-mentioned write-up extensively talks about how to file an IT return, the benefits of filing an IT return, the required document, the due date of filing returns, etc. Read the details thoroughly and file an IT return before the deadline to avail of significant benefits offered under it.