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The article attempts to detail the procedure involved in the fling of an Income Tax Return. ITR filing is a very important exercise in the life of an Indian Citizen which requires utmost care and precision.the article begins the discussion with a brief introduction to the scenarios and major irritants involved in the filing process.
Income Tax Return filing is considered as a very tedious affair which requires one to dedicate a tremendous amount of time and energy. The procedure can be quite confusing often due to its long drawn out nature.
Besides the filing has to be done with utmost care and accuracy unless it may result in rejection and several other consequences. Similarly, the rules and regulations are constantly being updated and not to mention the multitude of forms to be filled.
Till very recently the returns could only be filed offline of late it is possible to file it online which has eased the situation to some extent. Subsequently, e-filing was made compulsory from the year 2013 onwards.
Nevertheless, it is often noticed that the complexity of the filing actually affect the compliance rate negatively and people often put off or push it towards the last minute to avoid the head-spinning work as far as possible.
This further adds to the hardships as hard last-minute rush create too much online traffic to the filing portal leading to website freezing. Again filing past the deadline invite a huge penalty reaching up-to 10000 depending on the delay. In India, the last date to file returns generally falls on the month of July.
The multitude of forms thus available means that it is very important that the individual or entity must choose the correct one to avoid rejection. The right form has to be selected by keeping in several parameters as mentioned in the guidelines published by the IT -department.
Step1: Choosing the right form.
The process of return filing begins with choosing the right form which varies depending on various attributes. They range from the type of income, kind of residency, type of entity (companies, undivided family property etc.) The wrong choice here will necessitate repeating filing. There in total 7 kinds of such forms for each category of filers which are:
ITR 1 or SAHAJ Form
These forms are to be filled by resident Indians who earn their income through pension/salary/property from a single household. In the case of agriculture income, it should not exceed Rs 5000 and total income should not be over 50 Lakh. It also covers income generated through games such as horse-races and lottery.
Not Applicable :
The above-mentioned form is not to be selected if the individual has taxable capital gains /or has invested in unlisted shares / etc. their income from business /or the individual has foreign assets and income.
This form is to be filed by individuals and HUF s (Hindu Undivided Households)and who does not generate income through business or profession.
It is to be filled by individual and HUFs having their income generated through business or profession.
Filed by resident individuals, HUFs and firms (other than LLPs )and have a total income not exceeding Rs 50 lakh and those for whom income is calculated under the Sections 44AD, 44ADA, 44AE of the Income Tax Act 1961. Similarly, individuals who are non-residents and RNOR(Resident Not Ordinary Resident, as well as individuals with foreign possessions, are also required to opt for this form.
It is to be filed by those other than 1) individuals 2)HUF s 4) companies 5) those filing under form 7
It is to be filed by all companies except those claiming exemption under Section 11 of the Income Tax Act.
For persons including companies required to furnish returns under Sections 139 4A /139 4B/ 139 4C or 139 4 D only.
Step 2: Make sure that all the necessary documents are ready.
- Once the right form is chosen the next stage is to be ready with the required documents and other details to be uploaded simultaneously while submitting the returns online such as Form 16, Form 26 AS, bank statements, capital gains statements from mutual funds and brokers.
- Then download the ITR preparation document of the corresponding year
- If payment is already overdue, make the payment so that tax payable turn zero.
- Prepare the return using the downloaded software, Calculate tax and interest liability, tax payable or refundable.
- Once all the necessary information personal and TDS/tax payment information is put in by clicking on the pre-fill button, the next step is to save the return in XML format.
Step 3: Uploading
- Login to the ITR portal click on the e-file and click on upload return.
- Select the ITR form, assessment year and saved XTM return.
- If physical verification is required, the printed and signed copy of form5 has to be sent to the ITR CPC, Bangalore within 120 days of filing the return.
- Instead of opting for the verification form you can choose to generate electronic verification code Through net banking or ATM or can avail the aadhar based OTP verification option.
- If you have obtained a Digital Signature Certificate and the same is registered with the portal it could be uploaded immediately thus completing the submission.
Step 4: Processing of the Response.
The ITD will process the response so submitted, and if found satisfactory it will be given case-closed status. The taxpayer can keep track of the status through regularly logging into the portal.
Things to note
- First-time taxpayers have to register in the portal before logging onto the portal incometaxindiaefiling.gov.in,the User ID is the Permanent Account Number (PAN).
- As there are possibilities that the deadline may change as depending on the circumstances of the current year, keep an eye on these changes regularly, it is better no to put off filing to the very last minute to avoid the rush and other unfathomable eventualities.
- Also, remember that filing past the deadline will cost you so dearly.
- It does not usually do the government to periodically revise and update tax rates and other related rules. Therefore it is important to be informed about them as the amount to be mobilised may not be available at short notice without prior information.
- Prior knowledge about the details that have to be filled in is a must as ITR forms are quite complicated and often involve complex calculations and huge figures. If possible it is better to BIL the service of someone skilled in the process.
- Another important thing to watch out for is Tax Deduction and exemptions. There are possibilities that the payer will be missing many opportunities to avail the deduction due to lack of awareness or carelessness. To avoid this go through the guidelines and regulations thoroughly before embarking on the filing process right away.
- Make sure that bank account furnished on the form is correct as refunds and other rewards will be credited to the account mentioned in the return.
Income Tax Return filing is one of the, most dreaded activity for an ordinary working and middle-class citizens as well as firms. The problem mainly stems from the fact the process is literally a minefield of pitfalls if one is not careful and well informed.
The gravity of the process is compounded by the fact that it involves considerably huge figures and the exercise if not done properly may cost one so dearly. This very complexity was held partially if not wholly, responsible for the declining compliance and tendency for tax evasion. The Government has been working so hard to effectively stem the evasions and to develop a mechanism to realize better compliance standards. Consequently, several reforms were initiated.
As a result, the online filing of the ITR by every Income taxpayer was introduced. However, an exception was allowed to the senior citizens in view of the apparent difficulties that may arise. Similarly, late filing to be dealt with a huge penalty going up to RS 10,000 was another such measure. Nevertheless, we have miles to go before attaining 100% compliance.
- E-filing; Step by Step Guide as published by the ITD(version1.0, October 2015 )