Filing one’s taxes is considered a tedious and complex process. Contrary to the popular notion, tax filing need not be complicated. Over the last few years, many improvements have taken place in the income tax filing process in India. From online filing to pre-fetched data in forms, the government is trying to make it easier to file taxes to increase both the accuracy and quantum of tax filed by taxpayers. With easing in the mechanism of tax filing and simplification in procedures, it is hoped that tax compliance will also increase. Many online avenues (websites & apps) are available these days to help you file your taxes correctly.
What is Income Tax Return (ITR)?
An Income Tax Return or popularly known as ITR is a form that taxpayers use to file income tax as per the rules set by the government of India. The taxes are calculated on the basis of taxpayers’ income from the job or other sources. If the taxpayer has paid extra taxes, they can claim a refund over the paid amount.
Everyone has to go through the process of income-tax filing to provide information about their earnings to the government. It can be profit from the business, gifts received from someone else, salary, or the amount earned via investment into mutual funds, dividends, or any other schemes.
How to e-File Your ITR?
ITR e-Filing – Login & Required Documents
Make sure you have these things ready before you start filing your taxes-
- Have your PAN Card and Aadhar Card mapped to an active mobile SIM
- Have your Form 16 ready. Typically this will be available on your company’s HR webpage or you can ask your HR team for this.
- House Rent Receipts
- Investment Proof payment receipts – LIC, ULIP etc.
- Documents/bills as proof related to other exemptions
- Details of interest earned from other sources (bank deposits, family pension, dividend income etc.)
Link your PAN to Aadhaar
- Visit the e-filing portal of Income Tax
- Login to your account and visit the dashboard
- Click on Link Aadhaar to PAN option on dashboard
- Then click on Link Aadhaar
- Enter your aadhaar and PAN number
- Now validate. If the information entered is correct, it will link
Pre-fill your Personal Information
- Visit the official site of Income Tax Department
- Click on the download section
- Click on the relevant assessment year and then download the ITR form
- Now click on the Pre-fill option, the information will be filled instantly such as personal information, TDS or ITR details
- Enter the relevant info and now you can calculate the tax and interest you will have to pay
Edit and Review Details
- Login to your income tax portal
- Visit my account section and then tap on the services menu
- Now click on Request types and then on new request to make changes
- No click on ITR form particulars
- Then click on acknowledgment number and enter all the necessary details to make new changes
- Once done, click on submit
A self-declaration lists all your income on the portal that you have made in the particular financial year. For self-declaration, you will have to submit details of all your investments. Login to your account on the income tax portal, look for form 12BB, download the form and fill it with the correct information. Sign the self-declaration form and then submit it. Keep a copy for future reference.
For paying taxes, you will have to calculate the taxes as per the rates set by the government. You can refer to the tax rate section on the Income Tax official website. On the website, you can also find the tax calculator which will help you in calculating the payable taxes.
- Login to http://www.tin-nsdl.com
- Now click on services, and then on e-payment
- Now click on the challan generated
- Enter your PAN or TAN details and other important information as required
- Enter the name of bank under which you will pay the taxes
- Your full name will be shown on screen if the information entered is verified
- Now you will be directed to the net banking site to pay the amount
- Login on the net banking site and complete the transaction
ITR Submitted Successfully
Here are all the steps you will have to follow to pay your income tax filing successfully-
- Visit the income tax e-filing website https://eportal.incometax.gov.in/ and click on login in the top right corner
- You can log in using either your PAN Number or Aadhar Card Number. In case you are logging in for the first time you will need to set up a password. If you have logged into the site earlier but have forgotten your password, please click on Forgot password.
- Once you have logged in, you will see this screen. Click on the A+ icon on top if you wish to increase the font size. It is advisable to do this on a laptop although you can also do it through a smartphone. Check your personal details on the left (partly erased here for privacy). You will get a chance to update these later.
- Click on File Now. On the next page select the assessment year and press continue.
- The next screen will ask you to select the mode of filing – Online or Offline. Select Online and proceed
- On the next screen click on “Start New Filing” and then select “Individual” for Status Applicable to you.
- On the next screen you need to select which type of ITR you wish to file. Select ITR 1 from the drop down and click on proceed. There is a help button on the left side of the screen which will help you decide between ITR 1 and ITR 4.
- On the next screen you will see some helpful items such as document list and Frequently Asked Questions (FAQs) which you may go through and then click on “Let’s get started”
- On the next screen is a declaration of why you are filing returns. For most filers, the first option is applicable “Taxable income is more than basic exemption limit. Choose the one which is best applicable to you. People who have their taxable income less than the basic exemption limit are still required to file taxes if they have deposited Rs.1 Crore or more in aggregate in their current accounts or incurred an expense greater than Rs.2 Lakhs for foreign travel or if they have consumed electricity greater than Rs.1 Lakh in the financial year. Select the correct option for you and click “Continue” to proceed.
- Next you will be shown the steps you need to complete –
- Validate your return
- Confirm your Return Summary
- Verify & Submit
- Under Validate Return you need to confirm Personal Information, Gross Total Income, Total Deductions, Taxes Paid and Total Tax Liability. You can modify the pre-filled data but be sure to maintain proof of the changes that you make since there may be a query from the Income Tax department later.
- Confirm / modify Personal Details
- Decide which income tax regime – old or new – you wish to choose. The new tax scheme has a lower tax rate but without the deductions applicable in the old tax regime. You may want to take the help of online calculators to decide your choice of tax regime. Accordingly select the response to the question “Are you opting for new tax regime u/s 115 BAC?”
- Under Bank Details you will be shown previously entered bank accounts. You need to select one of these accounts to which the refund amount if any will be transferred. You have to nominate one of these accounts whether or not you will have any refunds. You can also add a new account and nominate it.
- Next section Income from salary is pre-filled basis your Form 16. Please go through the Part B of your Form 16 and verify the Gross Salary, Net Salary and other relevant values. You can press on the “Edit” button to modify the values.
- Delete the non-applicable items and then press “Save”
- Under Income from house property fill in the interest component from your ongoing home loan. You can get the Home Loan interest certificate from your bank to get this value and the certificate can act as proof of the same.
- Income from other sources section will show income received from other accounts. If not, please add those.
- You can get a certificate from your bank for interest on deposits or you can add the interest credits in your account from your bank statements. Usually these credits are quarterly.
- Deductions section: Please enter any deductions you are eligible for e.g. donations, 80GG etc, LIC premium, Provident Fund etc. The details will be pre-filled if you had informed your employer of the same at the start of the financial year. Do ensure that you familiarise yourself with these deductions as they can significantly reduce your tax liability.
- Tax Paid section: For TDS, you will get the pre-filled details on the screen from your employer.
- Verify your Total Tax Liability and confirm it.
- With this the first step Validate Return is complete and next step is Confirm your Return Summary
- You need to enter your name and your father’s name and select “Self” from the drop down. Scroll down the screen to verify whether all the deductions have been included correctly.
- Your tax is nil until Rs. 2,50,000 of salary. If your tax liability is less than Rs. 12,500 then your tax liability will be nullified under section 87A.
- After checking all items please click on “Proceed to Validation”
- Errors if any will be shown here and you will be allowed to go back and rectify the errors. Clicking on the error will take you to the relevant page so you can make the rectification.
- In case you have errors you will have to go through the last few steps again until there are no more errors. You will get a “Validation Successful” prompt at the end.
- Then click on “Proceed to Verification” and your tax filing is done!
- Filing taxes is considered as complex and difficult
- In the last few years filing has been made much simpler & easier
- It is possible to file taxes on your own even though there are multiple options to get it done by paying a fee
- Keep the pre-requisite details & documents handy before you start to file your taxes online by yourself
Importance of Filing ITR
- Income tax filing on time is a proof that you are a responsible citizen
- Income tax filing on time can you save you from legal trouble. Not paying taxes on time can land you in jail and the government can declare you as a fraudster.
- Your income tax filing documents can help you during applying for loan or a credit card
- You can claim tax deductions if you have filed your ITR
Types of ITR Forms
There are seven different types of ITR forms-
- ITR 1 is for people income of less than 50 Lakhs
- ITR 2 is for people having income of more than 50 lakhs
- ITR 3 includes every income from ITR 2, partner in any firm,
- ITR 4 is for firms, individuals or HUFs
- ITR 5 is for LLPs, or any partnership firms
- ITR 6 is for companies
- ITR 7 is for trusts
How to Calculate Tax in ITR?
To help taxpayers calculating how much tax to pay, Income tax department has a calculator on their website where you can put information and gather how much amount you will have to pay. Information you need to calculate tax-
- Assessment year
- Taxpayer status
- Whether you are opting for tax filing under section 115BAC
- Your gender
- Residential status
- Your net taxable income
Once you enter all the asked information, it will calculate the income tax payable after relief,
surcharge, health and education class, and the total payable amount. You can visit https://www.incometaxindia.gov.in/Pages/tools/tax-calculator.aspx to calculate the taxes.
Phew! Maybe Mr. Einstein was correct. On a serious note, it may seem daunting at first but it is advisable that you do this on your own. Your personal understanding of the tax structure and how to benefit from it will improve if you take an active part in filing your returns. In case all this seems too overwhelming, there are many avenues to get help. From your friendly neighborhood CA to online websites and apps to helpful colleagues, are just some of your options. You can even try to do it on your own while getting inputs from the aforementioned sources. Everything seems difficult the first time around but once you get the hang of it, it becomes easy. Lastly, do not take it as a chore. Feel proud to be one of the tax-filers in this country, on whose hard work the future of the country is dependent upon.
Ans. No, deductions applicable depend on the tax-filer’s individual circumstances. So some deductions which may be applicable for you may not be for someone else.
The government has given 2 options – new tax scheme vs the old one. The new one has a lower tax rate but you cannot avail the deductions applicable in the old tax regime. Usually people find the old tax regime more economical due to them having adjusted their finances around deductions since the past years. But its better to check for yourself before opting for either. There are various calculators available online to help you decide which tax regime would be favorable for you.
You can either request a certificate from your bank or you can go through your bank account statement and add up the interest credits during the financial year.
You can invest in various government-backed schemes that offer income tax reduction and enjoy exemption status such as health insurance, public provident fund, national savings certificate, and more.
You can visit the income tax portal to know the seven different types of ITR forms and fill the one which matches your eligibility. Your employer will also provide you with an ITR form to help.
As a taxpayer, you can file ITR 1 and 4 online on your own via the income tax portal.
If you are a salaried individual, you will have to file ITR 1.
If the income exceeds INR 2,50,000, the individual falls under the tax slab and will have to pay taxes.
Read more about How to File GST Return.