Why is income tax return filing important?
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.
Filing of ITR creates a valid proof of income,
ITR is required for applying for any loan in the future
ITR is required by banks even for applying credit cards
ITR is required for VISA applications etc.
Hence it is advisable to file ITR even if your income is below the basic exemption limit.
How to file an income tax return online?
You can file your ITR return online either through the income tax e-filing portal .
First you have to register for E-filing.
To register for e-filing, follow the below steps:
Open the income tax e-filing website using the following link: http://www.incometaxindiaefiling.gov.in/home
Click on the option “Register Yourself”
Select the user type
Fill the necessary details such as PAN number, surname, first name and date of birth
Fill the registration form
Validate using the OTP sent on the mobile number and email address
If you wish to file the return through Income tax portal, then you have to file it using the “offline” mode or the “online” mode.
a) Off line Mode -by downloading ITR utility :
Step 1: Calculation of Income and Tax
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.
Step 2: Tax Deducted at Source (TDS) Certificates and Form 26AS
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.
Step 3: Choose the right Income Tax Form
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) .
Step 4: Download ITR utility from Income Tax Portal
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
Step 5: Fill in your details in the Downloaded File
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.
Step 6: Validate the Information Entered
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.
Step 7: Convert the file to XML Format
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.
Step 8: Upload the XML file on the Income Tax Portal
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.
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