An income tax return is a form that enables a taxpayer to declare his income, expenses, tax deductions, investments, taxes, etc. The Income Tax Act, 1961 makes it mandatory under various scenarios for a taxpayer to file an income tax return.
An income tax return is a form filed to report the annual income of a taxpayer. However, there may be various other reasons to file an income tax return even in the absence of income like carrying forward losses, claiming an income tax refund, claiming tax deductions, etc.
The Income Tax Department provides the facility for electronic filing (e-filing) of an income tax return. Before discussing the steps involved in the e filing of income tax return, it is essential for a taxpayer to keep the documents for calculation and reporting data in ITR.
The taxpayer will be required to calculate their income as per the income tax law provisions applicable.
The calculation should take into account income from all sources such as salary, freelancing, interest from income, etc. The taxpayer can claim the deductions such as tax-saving investments under section 80C and so on.
Also, a taxpayer should take into account credit for TDS, TCS or any advance tax paid by them.
The taxpayer should summarise his TDS amount from the TDS certificates received by him for all the 4 quarters of the financial year. Form 26AS helps the taxpayer with the summary of the TDS and tax paid during the financial year.
The taxpayer must first ascertain what ITR form they must fill out before proceeding to file returns. You can either file your returns online or offline. Only two forms, ITR 1 and ITR 4 are available for tax payers online. All other income tax forms must be uploaded offline (generating XML and uploading) .
Visit the site www.incometax.gov.in and click on ‘Downloads’ from the top menu bar.
Choose the assessment year and download the offline utility software, i.e. Microsoft Excel or Java, or JSON utility based on your preference. The excel and java utility are discontinued by the income tax department from AY 2020-21
Upon downloading the offline utility, fill in the relevant details of your income, and check the tax payable or the refund receivable as per the calculations of the utility. The details of income tax challan can be filled in the downloaded form.
You can see a few buttons on the right-hand side of the downloaded form. Click on the ‘Validate’ button to ensure all the required information is filled.
Upon successfully validating, click on the ‘Generate XML’ button on the right-hand side of the file to convert the file into XML file format.
Now, log in to the income tax e-filing portal and click on the ‘e-File’ tab to select the ‘Income Tax Return’ option.
Provide the necessary details such as PAN, assessment year, ITR form number, and the submission mode. Remember to choose the option ‘Upload XML’ from the drop down corresponding to the field name ‘Submission Mode’ as given in the image below.
Now, attach the XML file from your computer and click on the ‘Submit’ button.
Choose one of the available verification modes—Aadhaar OTP, electronic verification code (EVC), or sending a manually signed copy of ITR-V to CPC, Bengaluru.
Income tax department has mandated to file the return to individuals only if their income is above basic exemption limit or if they meet certain criteria like expenditure on foreign travel being more than Rs.2 lakh, electricity consumption of Rs.1 lakh or more, deposited an amount/aggregate of an amount above Rs.1 crore in one or more current accounts in FY 2019-20 or onwards.
In the case of a resident whose asset is located outside India or has signing authority for an account-based outside India. It is always a good idea to file your ITR even if you are not eligible due to the benefits.
Income tax is a direct tax on your income. It means a portion of your income is paid to the government. The government charges this amount for expenditure related to health, education, providing subsidy to agriculture, infrastructure etc. It is paid by an individual/HUF/any taxpayer depending on income levels or gains in a financial year. A company has to pay income tax irrespective of the level of income. The government passes laws prescribing the rate of taxation on your income from time to time.
You have to pay your taxes before filing your tax return. If you are a salaried individual, then most of your tax liability is deducted from your salary by your employer in the form of TDS and paid to the government on your behalf. In case you are liable to pay advance tax, then you have to pay 90% of it before the 31st of March every financial year. You can file your ITR once the financial year ends.
The window to file ITR is generally open till the 31st of July of the relevant assessment year. However, the due date to file ITR may get extended, and the IT department will notify the same through notifications. It is always advisable to file your ITR within the due date. It’s worthwhile noting that you attract a late filing fee of Rs.5,000 on failing to file ITR within the due date of the assessment year.
There are many ways to save income tax by proper tax planning. Income tax Act provides certain deductions and exemptions that can be claimed which will reduce your total taxable income and reduce tax outflow. Below are some of the most common deductions and exemptions:
You can file your ITR return online either through the income tax e-filing portal or through ClearTax. If you wish to file the return through the government portal, then you have to file it using the “offline” mode or the “online” mode.