Filing an IT return is every assessee’s responsibility if their annual taxable income exceeds Rs.2.50 lakhs. Not only individuals but businesses also have to file their tax returns before the due date. There is a lot of confusion among the people that tax returns need not be filed if you have zero tax liability or if the tax has already been paid out in the form of TDS. Payment of tax has nothing to do with filing returns. Let us look at what is IT return and how to file ITR online. Today, the penalties for not filing returns or even not filing returns on time are quite high. Avoid getting the wrong books of the IT department.
The ITR filing process is quite simple and unless you have too many complications in the form of capital gains, write offs, carry forwards or business income, you are good to go on your own. The returns can be filed with an online utility and the process is just a seven step process you need to follow. It is called e-filing of returns.
Step 1: Create a login on the IT website and get into secured zone
To e-file your IT returns you need to have a secure login and password on the Income Tax website www.incometaxindia.gov.in . Your PAN number will be your username and you set your password in an alphanumeric fashion. Once you are logged in you are inside your secured areas. Ensure that you select the right form for the ITR filing as otherwise your returns will be rejected. With the login and password set, you can log in and you will also be required to put in a captcha each time you log in.
Step 2: Get all documents in place and enter basic details
Once you log in and before you actually start filing your returns, ensure that all the documents are ready with you. What are the documents you require on hand? Firstly, if you are an employee then keep the Form 16 given by your employer ready. Secondly, download the Form 26AS which is the IT department record of all taxes deposited against your PAN card. Also keep your list of investments for tax ready and in case you are claiming carry forward or set off of old capital losses, then keep the last year returns also ready.
Step 3: Enter all your income details
The simplest way is to download the form in excel format and fill up the fields. Start filling up the basic details and your income information. Remember, you need to report your total income after showing deduction of Rs.40,000 for standard deduction. Even other non taxable income sources like dividends or agricultural income have to be necessarily shown even if they are not taxable. This gives you your top line.
Step 4: Make a list of all the exemptions and deductions you are eligible
There are various exemptions and benefits you are eligible for. You have HRA deduction against your actual rent paid. Then you have the all famous Section 80C for all your tax saving investments. In addition, you need to report any donations made under Section 80G or medical insurance claimed under Section 80D. In case you have taken an education loan, you can also claim benefits under Section 80E. Once al these are factored in, you get the net taxable income.
Step 5: Give details of tax paid in the form of TDS
Once you have your actual tax payable with any applicable cess and surcharge, you will have to fill in details of actual TDS deducted by employer or vendor or any instances of advance tax paid you against capital gains etc. If they match then it is fine. If there is a shortfall, then you may have to pay the balance tax with a small penalty. If you have paid excess tax, you will get a refund in due course from the IT department.
Step 6: Download the XML file and file your ITR
Once the entire filing is done, the utility has the facility to cross check if there are any quality errors. Once the form is approved, you can just click a link to convert the file into an XML file. Converting to XML is essential because you can only file your ITR using an XML. Once that is done you can go into the return filling page. Make sure you select the right assessment year for which you are filing returns. Once the filing is done, your filing process is completed.
Step 7: E-verify your returns through one of the methods provided
Once you file the returns, you need to verify the return. There are four different ways to file the returns. Firstly, you can print the acknowledgement and then sign it and send it across to the IT department in Bengaluru. Secondly, you can also digitally sign your returns with a Class 2 level authentication digital signature. Thirdly, if you have a bank account which is linked to Aadhar and your PAN card, then you can also use the bank account to verify your returns. Finally, there is the good old Aadhar which you can use to e-verify the returns. Once the e-verification is done your return filing process is complete and you can find the acknowledgement in your login dashboard.