The e-filing of income tax returns is compulsory for all income-earning individuals in India. To file your taxes online, you will have to submit your income tax returns on the portal. E-filing of your taxes is hassle-free and convenient.
What is E-Filing?
As per section 139(1) of the Income Tax Act, 1961 in the country, individuals whose total income during the previous year exceeds the maximum amount not chargeable to tax, should file their income tax returns (ITR).The process of electronically filing income tax returns is known as e-filing. The filing of returns can be done in two ways – one is the conventional offline route which requires you to visit the office of the Income Tax Department and doing it manually, and the other is to file the returns on the internet. E-filing has been gaining a lot of popularity in recent years thanks to advancements in technology. E-filing is also relatively easier in comparison with offline filing as it doesn’t involve tedious paperwork and can be done from the comfort of your home.The due date for filing tax returns (physical or online), is August 31st.
Types of e-Filing:
- Use Digital Signature Certificate (DSC) to e-file. It is mandatory to file IT forms using Digital Signature Certificate (DSC) by a chartered accountant.
- If you e-file without DSC, ITR V form is generated, which should then be printed, signed and submitted to CPC, Bangalore by ordinary post or speed post within 120 days from the date of e-filing.
- You can file e-file IT returns through an E-return Intermediary (ERI) with or without DSC.
Steps to follow to file Income Tax Returns:(eFiling)
Filing your income tax returns online doesn’t have to be a complicated process. Simply follow the below steps.
First, log on to IncomeTaxIndiaeFiling.gov.in And register on the website.
- Your Permanent Account Number (PAN) is your user ID.
- View yourtax credit statement or Form 26AS. The TDS as per your Form 16 must tally with the figures in Form 26AS.
- Click on the income tax return forms and choose the financial year.
- Download the ITR form applicable to you. If you’re exempt income exceeds Rs.5,000, the appropriate form will be ITR-2(If the applicable form is ITR-1 or ITR 4S, you can complete the process on the portal itself, by using the ‘Quick e-file ITR’ link – this has been explained below).
- Open excel utility(the downloaded return preparation software) and fill out the form by entering all details using your Form 16.
- Check the tax payable amount by clicking the ‘calculate tax’
- Pay tax(if applicable) and fill in the challan details.
- Confirm all the data provided in the worksheet by clicking the’validate’
- Generate an XML file and save it on your desktop.
- Go to ‘upload return’on the portal’s panel and upload the saved XML file.
- A pop-up will be displayed asking you to digitally sign the file.In case you have obtained a digital signature, select’˜Yes’. If you have not got digital signature, choose ‘No’.
- The acknowledgment form,ITR Verification (ITR-V) will be generated which can be downloaded by you.
- Take aprintout of the form ITR-V and sign it in blue ink
- Send the form by ordinary or speed post to the Income-Tax Department-CPC , Post Bag No. 1 , Electronic City Post Office, Bangalore, 560 100, Karnataka within 120 days of filing your returns online.
Things to watch out for while e-filing:
- If the same mobile number or email address is used for more than four taxpayers, you cannot file returns on the website, unless the required change is done. For instance, in some cases, more than five returns may be filedâ€” yours, wife, mother, mother-in-law and the Hindu undivided family (HUF) of which you are the karta, the executor of a will.
- If your name mentioned in your bank documents or official statements is even slightly different from the one given in the PAN card, the portal will consider you a different individual. In certain instances, some individuals give their father’s name as their ‘middle’ name in their PAN card, but do not use it for their bank accounts.
- If anon-resident Indian has to file income tax returns, he will need both an India number and a foreign number.
Checklist for e-Filing IT Returns
There are a few prerequisites to filing your tax returns smoothly and effectively. Major points have been highlighted below.
- How to choose the right form to file your taxes electronically
- It can be confusing deciding which form to submit when filing your tax returns online. The different categories of Income Tax Return (ITR) forms and who they are meant for are tabulated below.
- Check your tax credit – Form 26AS vs. Form 16
You should check Form 26AS before filing your returns. It shows the amount of tax deducted from your salary and deposited with the IT department by your employer. You should ensure that the tax deducted from your income as per your Form 16 matches with the figures in Form 26AS. If you file your returns without clarity on errors, you will get a notice from the IT department.
- Claim 80G, savings certificates and other deductions
You can claim extra deductions if you forgot to claim them. Similarly, you can also claim deductions under section 80G on donations made to charitable institutions.
- Interest statement – Interest on savings accounts and fixed deposits
A deduction for up to Rs.10,000 is allowed on interest earned on savings accounts. However, interest earned on bank deposits, if any, forms a part of your taxable income and is taxable at applicable slab rates.
- In addition to the above, have the following at hand.
- Last year’s tax returns
- Bank statements
- TDS (Tax Deducted at Source) certificates
- Profit and Loss (P&L) Account Statement, Balance Sheet and Audit Reports, if applicable
- Ensure your system is equipped with the below.
Java Runtime Environment Version 7 Update 6 or above
List of Required Documents for e-filing of tax returns
It is always good to stay a step ahead, especially when it comes to tax filing. The checklist provided below will help you to get started with the e-filing of tax returns.
- Bank account details
- PAN Number
Reporting salary income:
- Rent receipts for claiming HRA
- Form 16
- Pay slips
Reporting House Property income:
- Address of the house property
- Details of the co-owners including their share in the mentioned property and PAN details
- Certificate for home loan interest
- Date when the construction was completed, in case under construction property was purchased
- Name of the tenant and the rental income, in case the property is rented
Reporting capital gains:
- Stock trading statement is required along with purchase details if there are capital gains from selling the shares
- In case a house or property is sold, you must sought sale price, purchase price, details of registration and capital gain details
- Details of mutual fund statement, sale and purchase of equity funds, debt funds, ELSS and SIPs
Reporting other income:
- The income from interest is reported. In case of interest accumulated in savings account, bank account statements are required
- Interest income from tax saving bonds and corporate bonds must be reported
- The income details earned from post office deposit must be reported
Who should e-file income tax returns?
Online filing of tax returns is easy and can be done by most assessees.
- Assessee with a total income of Rs. 5 Lakhs and above.
- Individual/HUF resident with assets located outside India.
- An assessee required to furnish a report of audit specified under sections 10(23C) (IV), 10(23C) (v), 10(23C) (VI), 10(23C) (via), 10A, 12A (1) (b), 44AB, 80IA, 80IB, 80IC, 80ID, 80JJAA, 80LA, 92E or 115JB of the Act.
- Assessee required to give a notice under Section 11(2) (a) to the assessing officer.
- A firm (which does not come under the provisions of section 44AB), AOP, BOI, Artificial Juridical Person, Cooperative Society and Local Authority (ITR 5).
- An assessee required to furnish returns U/S 139 (4B) (ITR 7).
- A resident who has signing authority in any account located outside India.
- A person who claims relief under sections 90 or 90A or deductions under section 91.
- All companies.
Benefits of E-Filing
E-filing is preferred to offline filing among many taxpayers in India. Here are some of the major benefits of filing your income tax returns electronically:
- Quick Processing:When you file your returns online, they will be acknowledged promptly by the Income Tax Department. One of the major benefits of e-filing is that if there are any refunds, they will be processed much quicker in comparison with returns that are filed on paper.
- Convenient:You can file your returns anytime, anywhere, if you have a mobile device or a laptop and an internet connection. The e-filing facility is open 24/7, making it a way more convenient option in comparison with manual filing of returns.
- Accuracy:The software created for the e-filing of returns comes with built-in electronic connectivity and validations that make it seamless. The software also reduces errors to a considerable extent. Since filing your returns manually can leave the door open to human errors, electronic filing of returns can ensure that there are no manual errors.
- Confidentiality:Filing your returns on paper has the potential for your details to get leaked. Online filing of returns, however, is much safer in comparison with manual filing as your data will not be accessible by chance or design.
- Easy to Use:The e-filing portal has been designed in a manner such that it is really easy to file your returns. There are detailed instructions that you can follow to ensure that the process is completed in a smooth and hassle-free manner.
- Proof of Receipt:Filing your income tax returns online will mean that the confirmation will be sent to you promptly through email on your registered email address. Since the process is automated, there will be no wastage of time in getting your confirmation.
- Electronic Banking:In case any refunds are due to you, they will be directly deposited to your bank account. In case you have any tax payments to make, they too will be directly debited from your bank account. You also have the choice to file your returns now and pay the taxes later. You can accordingly choose to instruct your bank account and enjoy the convenience offered by the facility.
- Accessibility:All the information regarding your past data can be accessed with relative ease when you file your returns online. The applications ensure that the data has been stored securely, so that it is easy for individuals to access it when filing their returns again.
Income Tax Return Due Date:
Generally, the due date for filing Income Tax Return (ITR) for Hindu Undivided Family (HUF)/ Individuals/ AOP (Association of Persons)/ BOI (Body of Individuals) is 31st July of the next Financial Year. For example – The ITR due date for Financial Year 2018-19 would be 31st July, 2019.
How do I file e-Returns?
- Fill income tax returns offline and upload XML on the official website: IncomeTaxIndiaeFiling.gov.in
- Prepare and submit ITR 1 online.
What to do if you don’t have Form 16
If you are a salaried individual and want to file your income tax returns, you will have to approach your employer to get your Form 16. All employers are obligated to provide their employees with a Form 16. In case you do not have your Form 16, there is no reason to worry as you can still go ahead and file your income tax returns. A Form 16 is essentially a TDS certificate which contains details regarding your TDS and taxable income. Your taxable and income and TDS can still be calculated even without a Form 16. The following are the steps to file your income tax returns without a Form 16:
- Accumulate your payslips to ascertain your taxable income
To start filing your income tax returns, you will have to compute your net salary from each payslip you got from your employer/s over the course of the financial year. In case you have switched employers over the course of the financial year, you will have to ensure that all the payslips are put together for the computation of your taxable income.
- Find the tax deducted through Form 26AS
The tax deducted at source by your employer over the course of the financial year will have to be calculated, and the amount must match the one mentioned on your Form 26AS. In case there is any discrepancy in the amount that was actually deducted and the amount that was meant to be deducted, your employer must be contacted immediately and the error must be rectified as soon as possible.
- Claiming House Rent Allowance
The salary of most employees contains a component for House Rent Allowance. In order to claim this deduction, your rent receipts must be submitted to your HR/payroll department well before the due date. In case you forgot to submit your receipts to your employers, they can be submitted at the time of filing your returns.
- Claiming deductions
There are several different investments that can offer tax benefits. All the documents relating to your investments must be kept handy so that you can determine which ones are eligible for deductions under Section 80C of the Income Tax Act. These investments could include PPF, EPF, life insurance, etc. Deductions can also be claimed under Section 80D of the Income Tax Act, such as premium payments towards medical insurance, and under Section 80E of the Income Tax Act, such as interest on education loan. When making claims for deductions on Provident Fund, it is important to only claim the amount that you have contributed, and not the amount contributed by your employer.
- Income from other sources
In case you earn income from multiple sources and not just through salary, you will have to include the same under the taxable income. The kinds of income that qualify under this head include income from rent on a property you own, interest accrued from fixed deposits, etc.
- Make additional tax payment if required
In case you have paid lesser tax over the course of the financial year than you actually should, it is important to pay any dues you may have.
- File your returns
If you have confirmation that the overall tax you have paid over the course of the financial year is actually the right amount, you may proceed to pay your taxes online.
What is the next step after you have e-filed your income tax returns?
Once you have filed your income tax returns, you will have to verify them. The following are the steps to e-verify your income tax returns:
- Use your credentials to login to incometaxindiaefiling.gov.in.
- Click on the ‘View Returns/Forms’ link to view your e-filed tax returns.
- Choose the option that says ‘Click here to view your returns pending for e-verification’.
- Choose the option that says ‘e-verify’.
- Once you have clicked on ‘e-verify’, you can choose one of the modes via which an EVC can be generated.
- Once the EVC has been successfully generated, you will have to enter the code and submit it.
- You will then receive a confirmation message along with an EVC code and a transaction ID. You will then have to click on the option that says ‘Click here to download attachment’.
You can also e-verify your income tax returns using your Aadhaar Card. Here are is a step-by-step procedure for the same:
- Login to incometaxindiaefiling.gov.in.
- Once you have logged in, a popup will show up on the screen requesting you to link your Aadhaar number to your e-filing account. In case the popup does not appear, you will have to visit the blue tab at the top called ‘Profile Settings’, and select ‘Link Aadhaar’.
- You will then have to ensure that your PAN details are accurate and the Aadhaar number must be entered before you click on ‘Save’. Once the validation is complete, your Aadhaar number and your PAN will be linked together.
Once your PAN and Aadhaar have been linked, here are the steps you must follow to e-verify your income tax returns:
- Upload your income tax return on the e-filing website of the Income Tax Department.
- After uploading your income tax returns, you will get a choice of methods through which you want your returns to be verified. Here are the options you will see:
- I already have an EVC to e-verify my return.
- I would like to generate Aadhaar OTP to e-verify my return.
- I do not have an EVC and would like to generate EVC to e-verify my return.
- I would like to send ITR-V/I would like to e-verify later.
- Choose the option to generate Aadhaar OTP and you will receive a one-time password on your registered mobile number. Please note that the validity of the OTP will expire in 10 minutes.
- The OTP will have to be entered on the page and submitted after which you will receive a message that says ‘Return successfully e-verified’. The acknowledgment will then have to be downloaded, and you will also receive a copy of the same in your registered email address.
Should I e-file returns if I earned less than the taxable income?
Individuals who earn an income in excess of the minimum threshold will not be required to file their income tax returns. However, there are certain benefits to e-filing your income tax returns even if your income is lower than the taxable limit. They are as follows:
- Adjustment of capital gains or losses:In case you are making investments in the equity market, or have been purchasing and selling shares, it will be beneficial to file your income tax returns. Doing so will enable you to adjust your short-term capital losses against your capital gains. You can carry the adjustment forward for 8 years by submitting your income tax returns for the respective year.
- Loan applications:An income tax return is more than a financial document. It indicates the yearly earnings of an individual. Banks as well as non-banking financial institutions require a copy of your income tax returns when they are approached for a loan. E-filing of your income tax returns will ensure that your chances of availing a personal loan are higher.
- Claiming tax refunds:After the deduction of tax, if you are to receive any refunds, you will only receive them if you furnish your income tax returns for the particular year. For instance, TDS on rent payments in case of NRIs, deduction of tax at source by banks on FDs, etc., can only be refunded when your income tax returns have been filed to claim the tax deduction.
- Foreign assets:Indian residents who own foreign assets are mandated to file their income tax returns according to the law. These assets include movable as well as non-movable foreign assets such as overseas bank accounts. If you fail to disclose your foreign holdings, you could be fined for it as it is considered as an economic offence.
- Claiming tax deductions:The exemption limits of Rs.2.5 lakh is on your gross income. In case your income exceeds Rs.2.5 lakh, and you wish to bring that amount down in order to avail tax exemptions, you can only do so by filing your income tax returns. Whether or not you have a tax liability, your income tax returns will have to be filed mandatorily if you want tax deductions under any section of the Income Tax Act, 1961.
Steps to file ITR 1 & ITR 4S Online:
Prepare and Submit ITR1 / ITR 4S (Sugam) Online
You have the option to submit ITR 1/ITR 4S forms by uploading XML or by online submission
- Login to e- Filing application
- Go to ‘e File’ ‘Prepare and Submit ITR Online’
- Select the Income Tax Return Form ITR 1/ITR 4S and the assessment year.
- Fill in the details and then click the submit button and choose DSC(Digital Signature Certificate)’ (if available) Click on ‘Submit’.
- After submission, acknowledgement detail is displayed.
- Click on the link to view or generate a printout of acknowledgement/ITR V form.
To use DSC, you have to register it in the e-filing application. You can do so by logging in on the e-filing website of the IT Department and updating the Profile Settings section. Under Profile Settings, you have to select Register Digital Signature Certificate and download the ITD e-Filing DSC Management Utility. You can use this utility to generate the DSC file.
You could also make use of several websites to file your income tax returns online. The portals typically charge fees (Rs. 250 to 300) depending on the kinds of service they offer.
Frequently Asked Questions: e-filing Income Tax Returns
- I file ITR online without an account on the Income Tax e-filing portal?
No, You have to create an account on the portal to file your ITR online. It is an easy process’“ you have to register yourself by providing details such as user type (individual, HUF, companies, chartered accountants, agencies or tax deductors), your PAN, first and middle names and surname, date of birth, and fill in the registration form. If you already have an account but have forgotten password, you can generate it through the’˜Forgot Password’ option.
- How many days do I have to verify the Income Tax Return I filed online?
You have to either send the ITR-V to CPC, Bangalore, or verify it online through electronic verification code or Aadhaar-linked one-time password, within 120 days of e-filing the return.
- Can I e-verify my ITR instead of sending a hardcopy to CPC, Bengaluru?
Yes. The Income Tax Department now allows you to e-verify ITR through an electronic verification code (EVC) or through a one-time password by linking your PAN and Aadhaar.
- Can I e-file my return before all my tax payments are done?
You can only file your Income Tax Return’“ online or through an agency’“ after all your tax payments for the year are done. The deadline for filing ITR is August 31 of the year after the end of a given assessment year’“ that is, you get 4 months to file ITR. This helps you put your accounts in order and make sure all tax-related payments are sorted.
- Is it mandatory for me to do the e-filing or can I depute it to someone?
You can seek the help of chartered accountants and agencies dedicated to ITR filing. It is wiser not to allow anyone to have your PAN and password in order to prevent any kind of fraud.
- How to check the status of Income Tax Refund?
You can check the status of Income Tax Refund online on the website of the Income Tax Department of India. You can track the refund status after 10 days (from the date the refund was sent to you). To check the status, you have to enter your Permanent Account Number (PAN) and choose the correct Assessment Year.
- What is HRA ?
HRA stands for House Rent Allowance. It refers to the amount of rent you pay for your place of residence. While filing Income Tax, you can claim HRA. You can enjoy tax exemption on HRA up to a certain limit. If you are unable to submit rent receipts to claim HRA exemption, then you can claim it while filing your ITR. If you have paid more than Rs.1,00,000 on rent in a financial year, then you will have to provide the PAN of your house owner/landlord. HRA exemption will be the minimum of the following:
- Actual HRA received.
- Actual Rent Paid.
- Rent Paid – 10% of Basic Salary.
- 50% (metro)/ 40% (non-metro) of Basic Salary.
To claim HRA exemption in ITR1 (If your employer has not calculated HRA), you have to deduct the HRA exemption amount from your Gross Salary and enter the result in the section ‘Income from Salary/Pension’.
- What is ITR–V ?
If you e-File ITR without using DSC or you e-File through e-Return Intermediary, then ITR-V form will be generated for you. You have to print this form, sign it and submit it to CPC, Bangalore using Speed Post or Ordinary Post only within 120 days, starting from the e-Filing date.