Income Tax Return Filing

Income Tax Return

Income Tax Act formulated by Indian Government states that those whose total income of the preceding year surpasses the threshold amount which is not chargeable to tax, have to file income tax return online or offline. Income tax returns filing is not an easy task. Thus, to make life smooth for people in this hectic schedule, the government has launched e-filing. This helps people in income tax filing in a hassle-free way.

This is a simple process which can be carried easily by those who can work on computer. If not, then there are numerous professionals out there those who can help you in filing income tax return online. The best thing about online Income Tax filing is that you can do this according to your wish and comfort. You do not have to take any leave from office just file your income tax returns. All you need to do is to register on the official website of the income tax department. Plus, there are other websites as well, which help you file your returns. You need to note that the due date for income tax return filing is July 31st.

As the income tax return due date is round the corner, you must have noticed every eligible candidate running from pillar to post to fulfil the tax-related formalities. As tax is the most important yet one of the complicated things to comprehend, here is a quick guide to making you familiar with the term and the return process:

Decoding Income Tax

Tax is the main element for the government to generate revenue. Income tax is one of the multitude taxes available in the system, which usually deals with the taxation of the earnings of every Indian citizen, organisation, firm in a fiscal year. The earnings that are eligible for tax could be from daily wages, dividends, interest, capital gains or other profits. In this regard, an income tax return is the only legitimate way to justify one’s income.

What is Income Tax Return?

Income tax return is the proof that you have paid your tax on time. The tax return proof contains the details of your annual earnings and the amount you’ve paid as tax. This makes it easier for every taxpayer to calculate the tax liability, schedule tax payments, a request of refund for over payment of tax etc. To complete the income tax return process effortlessly, you should know about the various ITR (Income Tax Return) forms related to the entire process. These forms are notified every year by the Central Board of Direct Taxes (CBDT).

ITR Forms

In order to file an income tax return, the required forms are as follows:

Form	Applicable to
ITR-1	For the salaried persons, house property owners, those who earn interests and with the total income up to INR. 50 lakh
ITR-2	HUFs and individuals not having an income out of proprietorship
ITR-3	HUFs and individuals having income from a business or profession under a proprietorship
ITR-4	For HUF, individual or Firm opting for tentative taxation scheme
ITR-5	For LLP or Limited Liability Partnership, firms, AOP (Association of Persons), Artificial juridical person, BOI(Body of Individuals), Registered societies, Private Discretionary Trust, Local authority, Cooperative society. However, an individual who is eligible under ITR-7 will not utilise this form to file income tax return
ITR-6	For companies who are not claiming tax exemption under section 11
ITR-7	Individuals and companies who are required to produce income tax return under section 139(4E), section 139(4F), 139(4D), 139(4C), 139(4B) and 139(4A) of Income Tax Act 1961.

Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insure. Tax benefit is subject to changes in tax laws. *Standard T&C Apply

 ITR Filing Due Date Fiscal Year 2018-19

Income Tax Department has extended the deadline for filing income tax return up to August 31^st, 2018. Those whose accounts need to be audited must file their income tax return by EOD September 30^th, 2018. Those who need to furnish a report under Section 92E must file the return by November 30^th, 2018.

What are the Advantages of File ITR?

Most youngsters may think that they don’t need to file an income tax return if they don’t fall under the tax slab. But it is not true. Income tax filing is a legitimate way to prove one’s income. It is an important document and more elaborate than Form 16. While Form 16 is the proof of one’s salary and tax deduction by the current employer, ITR indicates the income from other sources as well. The best part is that one can file ITR online also. This saves both time and effort. To file ITR online, the taxpayer has to visit the official website of the income tax department, navigate through the ITR filing option and pay the eligible taxes.

The benefits of Income tax filing are manifold:

Helps in Applying for Loans

Having filed ITR on time will help the person applying for a home loan or vehicle loan. Most of the Indian banks can ask for income tax filing copy as one of the important documents to sanction a loan. For instance, SBI asks the applicants applying for vehicle loan for the latest salary-slip stating all deductions, TDS certificate/ copy of ITR/ Form 16 from at least two previous financial years. Moreover, it also comes in handy when a loan application is being rejected. So, File ITR online and the required amount of loan in need.

Helps in Claim Refund

Income tax filing is necessary to claim a refund from the Income Tax Department of India. With an ITR, tax refund is impossible. When the taxpayers may mainly be investing in FDs, the tax is deducted for such investments at source at 10%. If the total taxable amount is less than Rs. 2,50,000, an individual can file tax returns and claim a full refund.

To Carry Forward Capital Losses

To carry forward capital losses, income tax filling is important. This way one can adjust the capital gains made in the following year.  The loss incurred in a long-term capital gain can be carried forward for eight following years instantly. This type of capital loss can be adjusted only against a long-term capital gain only. However, in case of short-term capital loss, which can be adjusted even against long-term capital gains as well.

ITR Receipt is an Essential Document

ITR receipt is an important document, which can be used for many purposes. It is the detailed proof that entails one's income and taxation amount along with the income from other sources as well.

Useful as Address Proof

When you file ITR online or offline, the ITR receipt is sent to the registered address, which can be further served as proof of address.

Important for Visa Processing

ITR receipt is also useful in visa processing. If you are travelling abroad, the foreign consulates may ask for a copy of Income tax filing of previous years, especially at the time of visa interview. When ITR receipts of the last three years are required in applying for a visa in some embassies, some other embassies may ask for the most recent ones. ITR copy is essential if someone is travelling to US, UK Canada or any other European country, but not so stringent for the Middle East or South East Asia. Hence, the experts suggest, whenever travelling to foreign countries, be it business trip or leisure trip, always carry income tax filling copy along with salary slip, Form 16 etc..

Can Avail High Life Cover

With accidental death increasing at a rapid pace, buying life coverage for higher sum assured has become commonplace. People prefer going for life coverage with Rs.50 lakh-1 crore so that maximum financial assistance could be offered to the family in case of a sudden demise of the insured. These covers can be availed against the copy of ITR. Various life insurance companies in India, especially LIC asks for ITR copy at the time of documentation. Even the coverage offered under a life or term insurance plan depends on certain factors and one of them is the income of the policyholder. If he/she doesn’t possess a higher salary, he/she would not entitle a higher life cover.

Useful for Self-employed

When Form 16 is not meant for businessmen, partners or consultants, ITR is the only document that proves their source of income. The only condition is that the annual income should exceed the basic exemption limit of Rs. 2.5 lakh. With ITR proof, the businessmen can perform all sort of financial transactions with ease. It is a legitimate document of tax payment for the self-employed.

Government Tender

When someone intends to start his/her own business and needs to file a government tender, it is essential to show ITR receipt of the previous years. This is a proof of the financial status of the applicant, which indicates whether he/she is competent to bear the payment compulsion or not.

However, it is not a mandatory option. It may differ depending on the rules and regulations of State or Central government. Even the requires ITR numbers can vary.

Just for Your Knowledge-

Read More: Income Tax Refund Status

Income Tax Slabs for the year 2018-19

Individual and HUF below 60 years

Income Level (Rs.)	Payable Tax (%)
Up to 2.5 lakh	Nil
2.5-5 lakh	5
5lakh-10 lakh	20
More than 10 lakh	30

 For Senior Citizens

Level of Income (Rs.)	Payable Tax % (60-80 yrs.)	Payable Tax % (above 80 yrs.)
Up to 2.5 lakh	Nil	Nil
2.5-5 lakh	5	Nil
5lakh-10 lakh	20	20
More than 10 lakh	30	30

Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insure. Tax benefit is subject to changes in tax laws. *Standard T&C Apply

Who can File Income Tax Returns Online? 

The online income tax return filing turns out to be very easy and smooth and is now adopted by most of the assesses.

• Those who earn Rs. 5 Lakhs and above.
• Individual/HUF dweller with possessions those are positioned outside the country.
• In order to submit the proof you need to prepare a comprehensive report of audit which is under the following sections 10(23C) (via), 10(23C) (VI), 10(23C) (v), 10(23C) (IV), 10A, 12A (1) (b), 44AB, 80IA, 80IB, 80IC, 80ID, 80JJAA, 80LA, 92E or 115JB of the Act.

According to Section 11(2) (a), the return filer needs to give a notice to the assessing officer.

• A firm (falling under guidelines of section 44AB), Cooperative Society, BOI, AOP, Artificial Juridical Person, and Local Authority (ITR 5).
• An assesse is responsible for producing returns U/S 139 (4B) (ITR 7).
• If you are a resident of India with signing authority of any account that you are holding outside India.
• If you claim relief under sections 90 or 90A or the deductions were claimed as per section 91.
• All companies.

Ways of Filing Income Tax Returns Online

• Digital Signature Certificate (DSC) for income tax filing online. A chartered accountant is necessarily required, in case you wish to file IT forms with the help of Signature Certificate (DSC).
• In case you wish to go by online tax filing without using DSC, an ITR V form is formed. This form needs to be printed and signed. Then after completing the formalities you need to submit it to CPC, Bangalore. You can do this through speed post or even speed post but make sure it reaches within 120 days from filling your form.
• While income tax return filing online there is no compulsion to file it using an E-return Intermediary (ERI) or you can do so without digital signature certificate DSC.

Things to Know before Filing ITR Online

In order to file online income tax return smoothly, you need to keep certain things handy.

Things to Know in Order to Choose the Right Form to Fill

Choosing the right form to file income tax return online is bits confusing as you need to pick out the right form while file ITR online. You need to select your Tax Return forms according to the categories you fall in. These categories are listed in the tabular for below:

• Look at tax credit - Form 26AS vs. Form 16

Before initiating the online income tax return filing make sure to kook at Form 26AS. This form depicts the total tax that gets deducted from your income and this is deposited by your employer to the IT department.

Make sure that the tax deducted depends on Form 16. This also has to match with the facts in Form 26AS. In case you fail to file your income tax returns online without any errors, IT department sends you a notice.

• Claim 80G, certificates for savings and several other deductions

Extra deductions can be claimed in case if you have not claimed them. Deductions can also be claimed under section 80G if you have made donations to charitable institutions.

• Interest statement – Interest paid on savings accounts as well as fixed deposits

A deduction for about Rs.10,000 is permissible with the best of the interest earned on your savings accounts. On the other hand, the interest which is levied on bank deposits is a division of the taxable income and thus is taxes are applicable as per the defined rates.

Including the taxes mentioned above, make sure that you have the following things:

Income tax returns submitted in the previous year

• Bank Account statements
• Certificates for Tax Deducted at Source (TDS)
• Profit and Loss Account Statement, Audit Reports, Balance Sheet 

In order to file income tax returns online your system needs to have the following

• Java Runtime Environment Version 7, therefore you need to Update if the version of your Java is 6 or above

Documents Needed for Income Tax Returns Filing Online

When it comes to serious things such as income tax filing you need to always stay prepared. Mentioned below is the list of documents that you need so as to online income tax returns filing:

General Details

• Details of your Bank account
• PAN Number 

Reporting Salary Income

• Rent receipts so as to claim HRA
• Pay slips
• Form 16

Reporting House Property Income

• Residential Address of your property
• Credentials of the co-owners along with their PAN credentials and share they hold in the mentioned property.
• Interest levied on home loan
• In case if you have an under construction property you need to submit the date of completion while income tax filing.
• Name of your tenant and the income from the rent, in case if you have rented a home 

Reporting Capital Gains

• You need to submit the purchase details plus the statement of stock trading in case if selling the shares while income tax return filing online.
• If you sell any house or a property, you need to give the details of the selling price, purchase price, registration details and the monetary profit gained while filing online income tax return.
• Submit all the details such as your mutual fund statement, debt funds, ELSS, sale and purchase of equity funds, and SIPs.

Reporting Other Income

• If you have some deposit in the savings account then the interest accumulated from the money from the savings account needs to be reported.
• If you have a source of income from interest on corporate bonds and tax savings bond while filing online income tax return then you need to report them.
• If you have deposits in the post office then at the time of income tax return filing you need to report the income earned from that deposit. 

Recommended

• Form 16 in India
• Income Tax Slabs and Rates for Assessment Year 2017-18

Process to File e-Returns

• If you do not have internet connectivity then you can fill up the returns form offline and then upon getting the connectivity you can easily upload the XML on IncomeTaxIndiaeFiling[dot]gov.in that happens to be the official website of the government.
• Then you need to prepare your ITR 1 online and after that submit it.

Read More: Income Tax E Filing

Steps to File Income Tax Returns Online

You can fill the XML offline and then upload on the official website.

You can even prepare and submit your ITR 1 online. 

What all steps you need in order to file Income Tax Returns Online: 

Income tax returns Filing online is to remove the complexities of the income tax filing process. Therefore, you need to follow these steps mentioned below:

 The first step is to visit IncomeTaxIndiaeFiling.gov.in login to the website. 

• Your Permanent Account Number (PAN) is supposed to be your user ID.
• Look at your tax credit statement or even Form 26AS.
• The TDS according to Form 16 must match with the details of Form 26AS.
• You need to click on the income tax return and pick out the financial year.
• The next step is to download the ITR form that suits you. For instance, if your exempt income is more than Rs.5,000, then you need to select ITR-2 .
• Make us the software for return preparation such as Open excel utility and make use of Form 16 to fill out the details of your form.
• Click on the tab that says 'calculate tax’ in order to know the taxable amount.
• Pay tax (if any) and enter your challan details.
• Click on the 'validate' tab to confirm all the details mentioned above.
• Pick up an XML file and save it on your computer.
• On the portal’s panel you need to find out 'upload return' and there you can upload the XML file you saved.
• You will get a pop-up asking you to sign the file digitally. If you have a digital signature, then select ‘Yes’. In case you do not have a digital signature, select 'No'.
• This will generate ITR-V Form that needs to be downloaded.
• Take out a printed copy of form ITR-V and do signatures on it using the blue ink.
• You need to send it the Income-Tax Department-CPC, Post Bag No. 1, Electronic City Post Office, Bangalore, 560 100, Karnataka. You are allowed to use speed post or ordinary post but it must reach just in 120 days of income tax return filing.

FAQs on Income Tax Filing - Income Tax Department

Question 1: What is ITR?

Answer: Income Tax Return or ITR is a formal form by which the particulars of the income of an individual in one financial year and the taxes paid on that income are provided to the Income Tax Department of India. This form also permits the transfer of loss and claim return from the Income Tax Department. There are different forms for income tax return filing available and prescribed and are dependent on the nature and status of income. You can download these forms from ‘www.incometaxindia.gov[dot]in’.

Question 2: Mention the type of return forms available in the Income Tax Law?

Answer: Under the law of Income Tax, there are different forms of Income Tax Return according to different categories of taxpayers available. These forms of return are also called as ITR forms. The types of ITR forms available for the assessment year 2018-19 are as follows:

Type of Return Form	Description
ITR-1	This form is also called as SAHAJ and is relevant for an individual who is a salaried employee or getting pension or getting income from a house property or have income from some other sources (it should not be from lottery winnings or from horses of race or income that is taxable under section 115BBDA or referred income in section 115BBE or income referred in section 115BBDA).
ITR – 2	This form is relevant for a Hindu Undivided Family or for an individual who does not have income that is liable to income tax in the head “Gains or profits of profession or business”.
ITR – 3	This form is relevant for a Hindu Undivided Family or for an individual who has an income that can be charged taxes under profession or head business.
ITR – 4	This is also referred to as SUGAM and is relevant for a Hindu Undivided Family or an individual or partnership company who has opted for a credible taxation scheme under Section 44AD/ 44ADA/ 44AE.
ITR – 5	A firm, AOP, LLP, BOI, or an unreal juridical person who is mentioned under section 2 (31) (vii), cooperative society and the local authorities. However, an individual who is needed to file the income tax return under section 139 (4A), 139 (4B), 139 (4C), 139 (4D), or 139 (4E), 139 (4F) should not utilize this form (this may include political parties, trusts, colleges, institutions, investment funds, etc.).
ITR – 6	This form is relevant for the companies that are other than the companies claiming tax exemption under section 11 (such as charitable or religious trusts).
ITR – 7	It is relevant to an individual including the organizations who are needed to provide income tax return under section 139 (4A) or under section 139 (4B) or section 139 (4C), section 139 (4D), section 139 (4E), or section 139 (4F).
ITR – V	This form is related to the recognition of filing the income tax return.

 Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insure. Tax benefit is subject to changes in tax laws. *Standard T&C Apply

Question 3: What are the different ways of income tax return filing?

Answer: The Income Tax Return can be filed in any of the below-mentioned modes with the Income Tax Department:

1. By providing the income tax return in paper form.
2. By providing the income tax return electronically through digital signature.
3. By communicating the data in the income tax return electronically through electronic verification code.
4. By communicating the data in the income tax return electronically and then submitting the return’s verification in Return Form – V.

Note: When the income tax return is filed as mentioned in the way (4) that is without the requirement of the digital signature, the income taxpayer has to take two copies (printed) of Form ITR-V. Out of these two copies, one copy has to be signed by the taxpayer and should be sent within 120 days (or as mentioned in the form for this regard) either through speed post or ordinary post to the “Income Tax Department – CPC, Post Bag No. 1, Electronic City Post Office, Bangalore – 560100 (Karnataka). However, the taxpayer should retain the copy for his/her record.

Question 4: Which way of income tax filing is relevant to whom?

Answer: The applicable income tax return filing as per the relevance of the people is mentioned below:

S.No	Person	Situation	Mode of Providing the Income Tax Return
1	An Individual or a Hindu undivided family	a.       The accounts should be audited as per the Income Tax Act's section 44AB.	Electronically as per digital signature.
		b.      When the total accessible income assessable according to the Income Tax Act throughout the former year of an individual of the age >= 80 years any time during the former year or One whose income is not more than 5 lakh rupees and there is no income tax return claimed and one who gets the income tax return in the Form ITR -1 (SAHAJ) or Form - ITR-4 (SUGAM)	(A). Electronically through digital signature (B). Communicating the data through electronic mode in the income tax return as electronic verification code or (C). Communicating the data in the income tax return electronically and then presenting the verification of the return in Form ITR – V or (D). Paper form
		c.       In other cases	(A) Electronically in the digital signature (B)  Communicating the data electronically under Income Tax Return in electronic verification code, or (C)  Communicating the data in income tax return electronically and then submitting the return’s verification in Form ITR – V
2	Company	In most of the cases of the company	Electronically through digital signature.
3	An individual needed to provide the ITR in Form ITR - 7	(a)    If it is a case of a political party	Electronically through digital signature
		(b)   In other cases	(A) Electronically through digital signature (B)  Communicating the data in ITR electronically through electronic verification code or (C)  Communicating the data in the ITR electronically and then submitting the return’s verification in Form ITR – V
4	Firm or a partnership with limited liability or any individual (other than those mentioned in SI. 1 to 3) who are needed to file ITR in Form ITR-5	(a)    The accounts need to be audited as per section 44AB of the Act.	(D) Electronically as per digital signature
		(b)   In other cases	(A) Electronically in the digital signature (B)  Communicating the data in the ITR electronically in the electronic verification code (C)  Communicating the data in the ITR electronically and then submitting the verification of the ITR in Form ITR-V

 

Question 5: Is it compulsory to attach documents with ITR?

Answer: The Income Tax Return forms are the forms that do not require attachments; therefore, a taxpayer is not needed to attach any document such as investment proof, certificates of TDS, etc.) with the income tax return (whether it is filed electronically or manually). However, such a document must be kept by the taxpayers and must be shown to the tax authorities when required in situations such as inquiry, assessment, etc.

Question 6: What is the process to file an income tax return electronically?

Answer: The Income Tax Department has accomplished an independent portal to e-file the income tax return. One can log in to the website www.incometaxindiaefiling.gov[dot]in to file an income tax return.

Question 7: What is the e-filing utility offered by the Income Tax Department?

Answer: The Income Tax Department has provided the facility of e-filing of the income tax return and generating the electronic return. This facility provided by the Income Tax Department is easy and simple to use and it as well contains the instructions to use. By using this utility, an individual can very easily file the income tax return. One can download this utility from www.incometaxindiaefiling.gov[dot]in.

Question 8: Does the income tax department establish any e-filing help desk?

Answer: Yes, one can contact the income tax department for any query related to e-filing of the income tax return by calling 1800 180 1961.

Question 9: Define the difference between e-payment and e-filing?

Answer: On one hand where e-payment is the process of tax payment electronically (such as by bet-banking or debit credit card of SBI), the other hand, e-filing is the procedure of electronic income tax return filing.

Question 10: Are there any disadvantages of filing an income tax return?

Answer: No, instead one becomes liable to pay the penalties and prosecution as per the income tax act by not filing an income tax return on taxable income.

Question 11: What are the advantages of e-filing of the income tax return?

Answer: E-filing of the income tax can be done online from anywhere and anytime and thus saves both effort and time of an individual. Moreover, the e-filed returns are processed faster than those filed manually.

Question 12: Will an individual be penalized for late filing of the Income Tax Return even if he/she is not liable to file the return?

Answer: No, if one is not needed to file ITR under section 139, then the late filing fee will not be levied on him/her as per section 234F.  

Question 13: What does happen if an individual fails to file Income Tax Return within the due date?

Answer: If an individual who is needed to file an income tax return as per section 139 fails to do the same within time prescribed in sub-section (1), then he/she has to pay the interest on the tax that is due W.E.F the assessment year 2018-19 and fee according to section 234F is needed to be paid, if the return is provided after the due date. The fee structure for the same:

1. Rs.5, 000 if the return is provided before or on the 31^st December of that assessment year.
2. Rs.10, 000 in other cases.

However, the late filing fee should not be more than Rs.10, 000, if the total yearly income of access is not more than Rs.5 Lakh.

Question 14: What does happen to excess tax paid by a taxpayer?

Answer: The Income Tax Department easily refunds the excess tax paid by a taxpayer, however for the same he/she has to claim by filing the Income Tax Return. It is refunded to the bank account of the taxpayer by ECS transfer. The Income Tax Department is making various efforts to make this process easier and faster.

Question 15: What does happen, if a taxpayer has made any mistake in his/her original return? Is he/she allowed to file a revised income tax return to rectify the mistake?

Answer: An income tax return can easily be revised and a mistake can be corrected any time during the year of assessment or before the assessment is made, whichever comes first. However, if one has filed the return originally on paper or manually, then the mistakes cannot be rectified online or electronically.

Question 16: Is it required to keep the copy of the filed return as a proof? If yes, then how long?

Answer: Yes, as per the Income Tax Act, the legal proceedings can be initiated up to 4 to 6 years before the current financial year. Therefore, an individual should maintain these documents for this period at least. However, for some cases, the proceedings can be started even after 6 years hence it is suggested to keep the copy of the Income Tax Returns as long as possible. With the e-filing feature’s introduction, it has become really easy to keep a copy of returns.