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What are the big advantages of filing your IT returns online?

05 Jan 2023

To understand the advantages of e-filing tax returns, you need to go back to the prevailing situation 6-7 years ago when it was not mandatory to e-file your returns. You could prepare the returns in the standard format and physically submit at the Income Tax Counters. That entailed a lot of effort in the form of manually filling up returns, then maintaining physical copies of your returns along with Form 16, keeping the ITR handy for follow-up with the IT department, following up for refunds, settling disputes etc. By filing tax returns online, most of these ordeals that income tax assessees had to go through in the past have almost become history. Before understanding the advantages of e-filing tax returns let us understand in brief the steps for filing tax returns online..

Steps for filing tax returns online..
The e-filing can be done by you or by your chartered accountant. In fact, the entire process has been simplified to the extent that you can file your returns yourself. The first step is to create your unique login id and password in the Income Tax website using your PAN as the user name. Then you can either file the returns online or download the appropriate form in XLS format. The third step is actually filing your returns in the downloaded XLS file. The XLS file is totally menu driven and most of the formulae are imputed. As you enter the data, the actual calculations happen automatically. The XLS file also has in-built Quality Check parameters to ensure that no fields are missed out. Fourthly, the entire XLS file once completed and approved by the online system has to be converted into an XML file and uploaded on the Income Tax website. Lastly, the filing process is completed but there is one follow up task pending. The acknowledgement has to be physically signed and sent to the IT Processing Centre. You also have a simpler option. You can avoid physical mailing of the acknowledgement by either using your e-signature or through Aadhar e-authentication.

Advantages of e-filing tax returns..
Your Income tax returns are an important document for a variety of activities. Whether you are looking at availing a car loan, buying property or seeking a visa to travel abroad, your income tax returns is a vital proof of your financial capacity. E-filing offers the following unique advantages compared to normal physical filing of returns..

Filing tax returns online is a fairly simple process and can be done from the confines of your home using your internet connected PC or laptop. The entire process is largely menu driven and there are enough quality checks to ensure that you do not commit mistakes while filing your returns.

It is environmentally friendlier compared to physical filing of tax returns. When you file returns physically, you waste mounds of paper making a rough draft and then making a final draft. All these expenses can be avoided by resorting to e-filing your tax returns.

There is a permanent audit trail of all your historical returns in your secured login section. You surely remember those days when you used to maintain files for over 10 years consisting of your Form-16 and your tax returns. Now all these documents are available in user-friendly PDF format which you can also back up in a pen drive or on in cloud storage.

Refunds can become quicker. Ever since the e-filing of income tax returns has been made compulsory, the entire process of getting your refunds has become more efficient. Since your tax return is also mapped to your bank account, the credit of the refund also happens seamlessly. The waiting time has substantially reduced due to e-filing.

The effort on reviewing zero-tax returns is substantial. Even today a major chunk of the return filings are of people who do not have any tax to pay. That becomes an added administrative effort with no proportionate revenues to the government. This enables technology to focus on the large mass of returns and manual intervention can be limited only to the significant returns, making the process of review easier and more effective.

One of the key advantages of e-filing tax returns is that the government is able to run a series of background checks to curb instances of tax evasion. By linking Aadhar card, PAN card and your bank account to your income tax returns, the review and audit becomes a lot easier. By filing tax returns online you are helping the government to pinpoint areas of tax evasion and plug the same. This is important at a time when the government is trying hard to plug leakages in tax collection and bring more people under the tax ambit.

Remember, there are very simple steps for filing tax returns online. Filing returns is not just simpler but it is also safer and more secure. In the process, you are helping the government expand the tax base. You will be the ultimate beneficiary in the process!

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