All you need to know about filing Income Tax Returns

Publish date: 28th August, 2018

Filing one’s annual income tax returns, to repeat a tired joke, can be quite taxing. But like flossing one’s teeth before turning in every night, it is advisable. If you don’t file returns thinking you are in the clear as you have paid your taxes, you run the risk of losing any deducted tax amounts the government owes you. More compellingly, it is the law: anyone with an annual income of over Rs 2.5 lakh before deductions in India is mandated to file income tax returns. Needless to say, non-filers can be penalized.

The last date to file your income tax return is July 31. However, the government has extended the date this year to August 31. In case if you have not done so yet, do it by the due date to avoid any future penalties.

Check List

There are two ways that returns can be filed: in the traditional manner – by filling in a form and mailing its signed printout on post, or the modern way – filling in an e-form, electronically. Either way, you need the same set of documents/information. But before starting the process, make sure you have the following details/documents with you:

• Bank statements;
• Previous year’s tax returns;
• TDS (Tax Deducted at Source) certificates
• PAN number;
• Form 16 (you can get it from your employer);
• Salary slips:
• Rent receipts for claiming house rent allowance (HRA);
• Details relating to capital gains, if any (see below);
• Details regarding income from house property, if any (see below):
• Details regarding any other income source (see below).

The following is the break-up of information you have to provide if you have income from different / other sources:

House property income

• Property address;
• Details of co-owners if any, their share and PAN details;
• Home loan interest certificate;
• In case of purchased property, completion date;
• If rented out, tenant’s name and the rental income.

Capital gains

• Stock trading statement along with purchase details for capital gains from selling shares;
• In case of a house or property sale, you have to cite 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.

Other income

• Income from interest is reported; in case of interest accumulated in a savings account, bank account statements are required;
• Interest income from tax saving bonds and corporate bonds;
• Income from post office deposit.

Additionally, you should also update yourself on tax credit, Section 80G deductions and your tax liability on interest income before filing your returns. A few pointers on these:

• Check Form 26AS as this shows the amount of tax deducted from your salary and deposited with the IT department by your employer. Take care to ensure that the tax deducted from your income as per your Form 16 matches with the figures in Form 26AS, as a mismatch can invite a notice from the IT department;
• You can claim any deductions that you forgot to claim earlier, as well as deductions under Section 80G (for donations to eligible charitable institutions);
• Please note that you are allowed deduction for up to Rs 10,000 on interest earned on savings accounts; anything above that falls in the applicable tax slabs.

The 4-Step Process

You will find below the four steps to file your returns, the first step being different for new users and registered filers.

STEP 1: Getting Started

(For first timers)

• Visit the e-filing website at https://incometaxindiaefiling.gov;
• As you are filing returns for the first time, you should click on the “Register Yourself” tab on the homepage;
• After this, select your user type from the options given – individual, HUF, companies, chartered accountants, agencies, tax deductor – and create your profile using your PAN details;
• To complete the registration, use the activation link and One-Time Password sent to your e-mail address and mobile number respectively.

(For registered users)

• As you have filed tax returns earlier, you are already registered;
• Go to the homepage and click on the “Login Here” tab;
• To log in, you have to use your PAN number as the user ID, your password, date of birth (as mentioned on the PAN card) and the mentioned captcha code;
• Use the “login button” at the bottom to sign in.

STEP 2: Choosing the Form

After having logged in, you need to choose the correct ITR form (Income Tax Return form): there are seven – check the list below; this is how you go about it:

• Click on the “e-File” tab and select “Income Tax Return”. Then enter the following details:
  (a) PAN number;
  (b) Assessment Year (the year succeeding the financial year for which returns are being filed);
• Download the ITR form applicable to you. If you are 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)

The List of ITR Forms:

• ITR 1 (Sahaj): Individuals with income from salary and interest
• ITR 2: Individuals and Hindu Undivided Families (HUF) not having income from business or profession
• ITR 3: Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship
• ITR 4: Individuals and HUFs having income from a proprietary business or profession
• ITR 4S (Sugam): Individuals/HUF having income from presumptive business
• ITR 5: Firms, AOPs, BOIs and LLP
• ITR 6: Companies other than companies claiming exemption under Section 11
• ITR7: Persons including companies required to furnish return under Section 139(4A), or Section 139(4B), Section 139(4C), or Section 139(4D)

STEP 3: Filling the Form

• Open excel utility (the downloaded return preparation software);
• Fill out the form by entering all details using your Form 16;
• Check the tax payable amount by clicking the “calculate tax” tab;
• Pay tax (if applicable) and fill in the challan details;
• Confirm all the data provided in the worksheet by clicking the “validate” tab.

STEP 4: Form Submission

The last step in the process is the submission of the ITR filed by you. As stated earlier, forms can be submitted by both post and online.

• The Postal Way
• After you have clicked on the Validate tab, generate an XML file and save it on your desktop;
• Go to “Upload Return” and upload the saved XML document;
• A pop-up will be displayed asking you to digitally sign the file: if you have a digital signature, select “Yes”, otherwise choose “No”;
• The site will generate an acknowledgment form, ITR Verification (ITR-V) – download it;
• Thereafter, take a printout of the ITR-V form and sign it in blue ink;
• Post the form by ordinary post 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.

• The Online Way
• Login to e-filing application;
• Go to “e File” and the “Prepare and Submit ITR Online” tabs;
• Select the form ITR 1/ITR 4S and the assessment year;
• Fill in the details and then click on the “Submit” button (choose DSC – Digital Signature Certificate – if available; see Note below*);
• Wait for the acknowledgement detail to be displayed after submission;
• Click on the link to view or generate a printout of acknowledgement/ITR V form.

(*NOTE: In case the return is submitted using DSC, you just have to preserve this number. If the return is submitted without a digital signature, an ITR-V is generated and is sent to your registered email ID. The tax filing process is incomplete and ITR is invalid unless your ITR V is verified.

(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.)

Verifying Tax Returns

You can e-verify your tax returns using any of the following modes:

• One-Time Password (OTP) on Aadhaar registered mobile number, or
• Electronic Verification Code (EVC) generated through your bank account.

If you want to use the Aadhaar OTP method, this mobile number must be the one linked to your Aadhaar card. In this process, an OTP is generated and sent to the registered mobile number. Enter the OTP in the text box provided and click on submit. A “Success” sign will be displayed. It is important to remember that Aadhaar OTP is valid for 30 minutes only.

You can also opt for the second route. EVC can be generated by clicking on the “Generate EVC” option under the “My Account Tab”. This will produce four options to verify your ITR – choose any.

Points to Remember

Over and above the pointers stated in the “Check List” section, as well as a few in the tax filing steps, there are some points that you could keep in mind:

• The first point is a recap of what was said in Step 1; you cannot file your ITR online without an account on the Income Tax e-filing portal – you have to create an account on the portal to do so;
• The deadline for filing is July 31;
• If you want to verify the ITR filed online, you have to do so within 120 days of filing;
• You cannot e-file returns before making all your tax payments;
• The status of your ITR anytime can be checked anytime from the homepage. Go to 'My Account' and select “View e-Filed Returns/Forms” option;
• You can depute someone else (chartered accountants and filing agencies) to e-file your returns, but it is unsafe to allow others to access to your PAN and password;

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