My learning of Income tax started with the Income tax return. In the beginning of my job, someone suggested me to file income tax return. At that time I did not have an idea of taxation in India. Even I did not know the tax saving. I was wondering, what the heck is income tax return? Why people say that filing income tax return is necessary. I do knew that my employer has deducted small amount as a tax. But, what is this e-Filing of Income Tax Return was a new thing to me.
What is Income Tax Return
Later, I learned that income tax return is a way to keep income tax department in loop. Through the tax return, you give details about your income and resultant tax. You also tell that full income tax is paid. In an income tax return you submit following data with the income tax department.
- Your taxable income from all the sources. It includes you income from salary, capital gains, house property or business as applicable.
- Details of deductions – It includes all the section 80C investments and other deductions.
- Details of income tax payment – It includes TDS, Advance tax or self assessment tax.
Note, you must pay the whole payable tax before submitting income tax return. Else, it would be rejected. Don’t try to conceal your income to save tax as government is monitoring all of your income through sophisticated software and PAN.
Know More: About Income Tax
What is E Filing
When you submit your income tax return electronically, it is called as the e-Filing. In this method of income tax return filing you submit tax information through the online page or uploading form.
Nowadays, most of the income tax return is filed online. e-Filing has become the norm for submitting income tax return. Earlier, the ITR forms were submitted at the counters of income tax department.
The physical form submission used to take several hours of taxpayers. Whereas, you can e-File income tax return within an hour. You can easily e-file return through the website incometaxindiaefiling.gov.in for free.
efiling of income tax return is compulsory for every tax payer. Only a small section of income tax payers has got the relaxation. These are given below
- Super senior citizens who are above the age of 80.
- Individual or HUF whose total income is not more than 5 lacs and don’t need any tax refund.
Why Should e-File Income Tax Return
In fact, It is your responsibility to pay correct income tax. The tax department would never tell you the tax liability. You have to refer income tax slab and compute your payable tax. Also, You have to factor in the tax exemptions and deduction while tax calculation. Once, you reach at payable tax amount, pay the tax to income tax department.
After this payment, You have to also tell on which basis you have paid that much tax. What was your income, what were the eligible exemptions and deductions. All this information is given in the form of income tax return.
However, for the salaried people, most of this calculation and tax payment is done by the employer. It is the employer who calculates tax on the basis of your salary and exemptions. It also takes details of your tax saving investment. After factoring all these information, the employer deducts tax every month. The employer also gives you the form 16 which contains all the information used for tax calculation. With this the responsibility of employer ends.
It is the responsibility of the taxpayer to pay correct income tax and file return. Salaried people can refer to their form 16 while e-filing income tax return. While self employed can refer to their accounts book.
Who Should File Income Tax Return
A person who earns money from any means should e-file income tax return. However, it is mandatory to those who pays tax. As you know that every earner is not liable to pay income tax. Rather, you have to pay tax only if your cross the limit of tax-free income. As of now, this limit is 2.5 lacs. It means you have to file income tax return if your income exceeds ₹2.5 lacs. Senior citizens has different limit as they get some relaxation. Following table show you the limit for e-filing income tax return. If you earn more than the given limit, you have to file income tax return.
Note, for e-filing, You have to take account of the gross income that is income before accounting any exemption or deduction.
e-File income tax return of your gross income exceeds …
|For individuals below 60 years||Rs 2.5 Lakhs|
|For individuals between 60 to 80 years||Rs 3.0 Lakhs|
|For individuals above 80 years||Rs 5.0 Lakhs|
Documents Required for e-Filing
Income tax department has made return filing attachment less. It does not ask any document with ITR form. Hence, you don’t need to attach any documents like proof of investment, TDS certificates, rent receipts etc. Rather, you have to keep all the proofs of exemptions and deduction with you. It can be required if there is a scrutiny in future.
Often, employers keep the proof of the exemptions and deduction with it. But a self employed has to do this duty on its own.
Due dates for Return
You have to file income tax return of a financial years after it gets over. The year when income tax return is submitted is termed as the assessment year. The last dates for filing return of income are as follows:
|Individual/HUF whose accounts are audited||30th September of Assessment Year|
|In case of an assessee having an international transaction or specified domestic transaction(s) who is required to furnish a report in Form No. 3CEB||30th November of Assessment Year|
|All other individuals/HUFs||31st July of Assessment year|
e-filing income tax return is not only submitting a form, but you have to do some homework as well. You need to check your tax payment, exemptions and tax saving investment. Even, you may have to pay income tax before filing the return. is it seems complex?
Don’t worry! If you go through the following steps, you can e-file your income tax return easily.
1. Get Form 16 and form 16A
Employers give your income tax tax deduction details in form 16. It is mandatory to give form 16 if an employer deducts tax. The form 16 is given after the end of the financial years, normally in the month of May and June.
Similarly, bank gives you form 16A in case it has deducted TDS on your interest income. If your interest earning exceeds 10 thousand, banks deduct tax.
2. Retrieve Tax Payment Details
Your next step should be the getting details of paid tax. You can get details of TDS from the form 16 or form 16A. While details of advance tax or self assessment tax should be available on respective challans.
You should also verify your tax payment. It can be done through the form 26AS. This form contains all details of tax payment against your PAN. You can view form 26AS online. If you see any discrepancy, immediately contact to your employer or bank for the rectification.
3. Choose Correct ITR Form
There are various income tax return forms for different types of income. You have to choose right ITR form considering your source of income. The simplest ITR form is to those who only earns from the salary. You can refer following tables while selecting ITR forms. These forms are for individuals and HUF. For others, there are different forms.
|ITR 1||For Individuals having Income from Salaries, one house property, other sources (Interest etc.) and having total income upto Rs.50 lakh|
|ITR 2||For Individuals and HUFs not carrying out business or profession under any proprietorship|
|ITR 3||For individuals and HUFs having income from a proprietary business or profession|
|For presumptive income from Business & Profession|
4. Calculate Total Income For the Financial Year
Now you have to find out the total income for the financial year. To get it you can refer to form 16. It contains the gross income as well as the taxable income. You have to use the taxable income in the ITR form.
However, if you also earn from the bank deposit, you must enter the amount under ‘Extra Income’. For the income from capital gains, house rent or business, there are separate pages in the income tax return form. Your return form would become complex with the types of income. It is very easy to fill income return form if you only earn from the service.
5. Get Tax exemption and Deduction Details
Government gives you many exemptions and deduction which save tax. Hence, to reach at correct tax liability, you must factor in all the eligible exemption and deductions. The exemptions are House rent allowance, transport allowance, medical allowance, LTA etc. While you get tax deduction by investing in ELSS, NSC, PPF, insurance, tax saving FD etc.
In the income tax return form, you have to fill the total taxable income after the exemptions. Whereas, you have to enter the deductions in the given field.
Steps to e-File Income Tax Return
Register or Login at income tax efiling website
To e-file income tax return, you have to register at incometaxindiaefiling.gov.in. If already registered, login using your PAN and password. You can only register once using your PAN. If you forgot the password, you can reset it as well.
After login, you have to chose the assessment year for filing income tax return. Note Assessment year should be the current year for efiling tax return of previous financial year. For example if your filing return of the financial year 2016-17, the assessment year would be 2017-18.
You have to also choose the right income tax return form (ITR form). There are four types of form for the individuals. Among these four, only ITR-1 and ITR-4 is available for online filing. For other two forms, you have to download, fill and upload.
Download ITR-2 and ITR-3
To download ITR-2 and ITR-3, you have to visit the home page of income tax efiling portal ( incometaxindiaefiling.gov.in). You would find the download link at home page. You can download all types of ITR forms through this link. There are two types of downloadable form. The excel format and Java utility. Java utility is more user friendly. But for the first time you have to deal with some technical steps. Give it a try.
Give Personal Details
The income tax return form requires your personal details. The online form pre-fills some of your personal detail on the basis of PAN data. However, you would be able to edit the data.
In the same page you have to also give your employment details. You also tell whether your are efiling before due date or after the due date. Whether efiling is original or revised. If you are efiling revised income tax return, you have to also give details of the original return.
There is a column for those who are governed by the Portuguese civil code. There are many people in Goa which are governed by the Portuguese code.
Give Income Details
In the next page you have to give details of your income and deductions. The page also shows the total payable tax by you. In fact, It is the most important page of the income tax efiling.
When you are entering the income from salary, fill your taxable income. It would be mentioned similarly in the Form 16. This amount is reached after deduction all the applicable exemptions. It is not the gross salary. Rather it is gross salary minus exemptions.
In the income from house Property, you can fill your rental income. If your house is self occupied and you are paying EMI, You should enter the interest part in this field. As it is not an income but an expense, you must enter the value in negative (with minus sign).
The bank interest income is entered in the field of income from other sources.
Give Deductions Details
This section gives you tax benefit. The entry of this section would reduce your tax outgo. You have to enter the amount which was invested to avail tax deduction. These includes the 80 C deductions and other than 80C deductions. You can claim 80C deduction upto 1.5 lakh. The NPS investment can give you further deduction of ₹50,000. Other sections such as medical insurance can give you extra tax saving. If you have any confusion, it is better to read about 80C deductions and other tax deductions.
This section gets auto populated based on your entry of income and deductions. The system itself calculates your tax liability and rebate, if any. However, you would have the option to enter the amount of interest and foreign income relief (section 89(1)), if any. Interest is charged, if you did not pay advance tax on time.
Tax Paid Details
This page contains all the details of your tax payments. If you are filing the ITR form online, all the details would be pre-filled. The system fetches tax payment details from the form 26AS. This form contains all the tax payment against your PAN.
There are 4 schedules for different types of tax payment.
1 – First schedule contains your TDS deduction by the employer. Most of the people would see entry in this section.
2- Second schedule contains TDS deducted by banks or any other deductor.
3- The third schedule contains detail about the tax collected at source. You would see it when you collect a tax on behalf of seller. It happens property deals.
4- In the fourth schedule, there would be details of advance tax paid by you. If you don’t pay tax through the TDS and your tax liability exceeds 10 thousand, you have to pay advance tax.
Taxes paid and verification
In the fourth page of the ITR-1, there would be a tally of payable tax and paid tax. There can be 3 situations.
- If you have paid exact tax as per the payable tax there would not be any refund or amount payable.
- If you have paid excess tax, there would an amount in refund field. You would get back money.
- If you have paid less tax, there would be an amount in amount payable field. Note, if you see any amount in this section, you must cross check all the details. If there is still an amount, pay that amount before submitting the income tax return. You can pay income tax immediately through the online mode.
Give Bank Account details
You have to tell about all the bank accounts. First, yo have to give details of the bank account into which you want the tax refund, if any. After this, you have to mention all other bank account. Income tax department has made it mandatory to mention all of your bank accounts.
You have to enter bank account number, name of the bank and IFS code of the bank branch as bank account detail.
You also get tax benefit against the donation. These donations are specified. If you want to take tax benefit for such donation, fill the next page of the section 80G. You have to give the details of such donations. Otherwise you can skip this page.
Submit and Verify Income Tax Return
Once you have filled the ITR form, you can submit it. After the submission, A pop up would appear to e-verify the income tax return. You can easily e-verify if you have linked you Aadhaar with the PAN. Net banking user can also verify income tax return by logging into their account.
After the e-Filing
Revised Income Tax Return
Suppose, You make an error in your income tax return. Can you rectify it? Yes, it is possible by efiling revised income tax return. The income tax department has given the facility of revised return. You can file revised return as many times as you wish. But revision is possible if you have filed original return before the due date. Also, you can’t revise income tax return if assessment of your return is complete.
Intimation Under Section 143 (1)
The income tax department sends you a notice after successfully e-filing the return. This notice is titled as Intimations Under Section 143 (1). You would get this notice within 1-2 months. This notice is a communication from the income tax department which verifies your return. This verification is conducted through the internal system. If your return is alright, this notice would act as the final assessment and you should keep it safe. The income tax department’s system may also produce some tax liability of refund. If there is a refund, sit and wait for that. But if there is a tax liability, you must pay it within 30 days of the notice.
Income Tax Refund
If you paid excess income tax, you would get it back. When you e-file income tax return, you would get to know about the excess tax paid. You can see that in the ITR forms. This refund is credited to your bank account after the assessment of the return. Normally you would get tax refund within 3 months of efiling. Meanwhile you can also check tax refund status online.