HOW TO FILE AN INCOME TAX RETURN
Author: Akshat Garg
Income tax returns or ITR are the tax forms used to declare the details of your income to the Income Tax Department for assess the amount you need to pay as income tax in a financial year. The tax return, usually in a predefined worksheet format, is also necessary to claim a refund of any additional amount that might have been deducted at source (TDS) and deposited with the income-tax department. The ITR can be filled online as well as offline As online website is
ESSENTIAL THINGS REQUIRED FOR FILLING AN INCOME TAX RETURN
A. Keep essential documents with you: Collect documents such as Form 16, salary slips, and interest certificates and Form 26AS. Keeping them handy will help you compute your gross taxable income and will provide you with the details of tax deducted at source (TDS) from your income in 2019-20.
B. Get Form 26AS: You can download Form 26AS from the TRACES website.
C. Calculate total income for the financial year: Once you have verified all the taxes deducted from your income, you have to calculate the total income chargeable to tax. Total income is computed by adding income from five different heads and claiming all the relevant deductions allowed under the Income-tax Act and setting off losses if any. In addition to that, you are required to provide source-wise bifurcation of the incomes taxable under the head ‘Income from other sources’.
D. Calculate tax liability: Compute tax liability by applying tax rates according to your income tax slab.
E. Compute final tax payable: Now that you have calculated your tax liability, minus taxes that have already been paid for (through TCS, TDS, Advance Tax). Add interest, if any, payable under sections 234A, 234B and 234C.
F: File income tax: Once you are through with the above steps, you can start the process of filing ITR. ITR can be filed by downloading the software in Excel or Java utility. However, taxpayers who are eligible to file ITR-1 and ITR-4 also have the option to file it online without downloading any software utility.
Please note: You can only claim any refund from the income tax department after you have filed ITR. Use the right ITR form.
G. ITR verification: This is the last step. You can verify your ITR electronically and via physical verification. In the case of e-verification, you will not have to physically send your tax return to the Income Tax department.
H. Processing of ITR: After the return is verified, either via e-verification or physically, the income tax department will start processing your tax return. Once it is processed, the tax department will inform you of the same via e-mail. If discrepancies are found, you may be asked to explain or correct the mistakes made while filing ITR.
STEP BY STEP FILLING OF AN INCOME TAX RETURN
Step 1: Login to your ClearTax account.
Click on ‘Upload Form 16 PDF’ if you have your Form 16 in PDF format.
Step 2: Enter your Name, PAN, DOB and Bank account details.
Step 3: Fill in your salary, employee details (Name and TAN) and TDS.
Step 4: Enter investment details under Section 80C(eg. LIC, PPF, etc., and claim other tax benefits here.
Step 5: If you have non-salary income, eg. interest income or freelance income, then add tax payments that are already made. You can also add these details by uploading Form 26AS.
Step 6: If you see “Refund” or “No Tax Due” here, Click on proceed to E-Filing.You will get an acknowledgment number on the next screen.
Step 7: Once your return is filed e-verify your income tax return.
Q 1 what are the documents required for filing an income tax return?
The following documents at hand to pace up the process:
- PAN card
- Aadhar card
- Bank account details
- Form 16
- Investments details
Q 2 Which form to be filled for income tax return?
- ITR-1: For Individuals (Resident) having Income from Salaries, one house property, other sources (Interest, etc.), and having total income up to Rs.50 lakh. (Not for an Individual) who is either Director in a company or has invested in Unlisted Equity Shares)
- ITR-2: For Individuals and HUFs not carrying out any business or profession.
- ITR-3: For individuals and HUFs having income from business or profession.
- ITR-4: For individuals, HUF’s and firms (being resident) having u/s 44AD, 44ADA and 44AE and having a total income upto INR 50 lakhs. (Not for an Individual who is either Director in a company or has invested in Unlisted Equity Shares)
- ITR-5: For persons other than:-
- Company and
- Person filing Form ITR-7
- ITR-6: For Companies other than companies claiming exemption under section 11.
- ITR-7: For persons including companies required to furnish return under sections 139(4A) or 139(4B)or 139(4C) or 139(4D) or 139(4E) or 139(4F).
Q 3 How to e- verify income tax return?
Mode and process of generating and validating income tax return through Electronic Verification Code (EVC):
- Through Aadhaar Number OTP
- Generation of EVC
- Through Net banking
- Through Email id and Mobile Number
- Pre-validating Bank Account Number
- Through DE-mat Account Number
- e-Verify through available EVC (If already having the same)
Q 4 – Who is required to file an ITR?
Every Indian citizen whose gross total income exceeds the taxable limit must file an ITR. This implies individuals and Hindu Undivided Families (HUFs) with total annual income exceeding Rs 250,000 lakh are required to file an income tax returns. For senior citizens (individuals between 60 years and 80 years of age) the threshold is Rs 300,000, and that for very senior citizens (aged above 80 years) it is Rs 500,000.
Q 5 – What are income tax slabs for financial year 2020 ?
|INCOME TAX SLAB||TAX RATE|
|Below 2.5 lakh||NIL|
|Rs 2.5 lakh to 5 lakh||5%%|
|Rs 5 lakh to 7.5 lakh||10%|
|Rs 7.5 lakh to 10 lakh||15%|
|Rs 10 lakh to 12.5 lakh||20%|
|Rs 12.5 lakh to 15 lakh||25%|
|Rs 15 lakh and above||30%|
Q 6- what are the advantages of filling income tax return income?
* Quick processing: You will get the acknowledgment of ITR promptly. Refunds, if any, are processed faster online than paper-filed returns.
* Accuracy: E-filing software minimizes errors.
* Convenience: E-filing facility is available 24×7 and can be done at your convenience.
* Privacy: The data entered by you are safe as they cannot be accessed by anyone.
* Record of past ITRs: It is easier to access previous data, should you need them at any time in future.
Q 7 – What are the different modes of filling the return of income?
The Return Form can be filed with the Income-tax Department in any of the following ways, –
(i) By furnishing the return in a paper form.
(ii) By furnishing the return electronically under digital signature.
(iii) By transmitting the data in the return electronically under electronic verification code.
(iv) By transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR-5.
Q 8 – What precautions should be taken while filing the return of income?
1) The first and foremost precaution is to file the return of income on or before the due date. Taxpayers should avoid the practice of filing belated return. Following are the consequences of delay in filing the return of income/ Loss :
- Losses cannot be carried forward.
- Levy of interest under section234A.
c. Late filing fees under section 234F is levied for return filed from A.Y 2018-19 onwards. A late filing fee of Rs. 5,000 shall be payable if return furnished after the due date but before 31st December of the assessment year. In other cases, late filing fees of Rs. 10,000 is payable. However, the number of late filing fees to be paid cannot exceed Rs. 1,000, if total income does not exceed Rs. 5 Lakh.
d. Exemptions under section 10A, section 10B, are not available.
e. Deduction under 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID, and 80-IE, are not available.
f. Deduction under 80IAC, 80IBA, 80JJA, 80JJAA, 80LA, 80P, 80PA, 80Q QB, and 80RRB are not available.
2) The taxpayer should download Form 26AS and should confirm actual TDS/TCS/Tax paid. If any discrepancy is observed then suitable action should be taken to reconcile it.
3) Compile and carefully study the documents to be used while filing the return of income like bank statement/passbook, interest certificate, investment proofs for which deductions are to be claimed, books of account and balance sheet, and P&L A/c (if applicable), etc.
4) No documents are to be attached along with the return of income. The taxpayer should identify the correct return form applicable in his case. Carefully provide all the information in the return form. Confirm the calculation of total income, deductions (if any), interest (if any), tax liability/refund, etc.
5) Ensure that other details like PAN, address, e-mail address, bank account details, etc., are correct.
6) After filling all the details in the return of income and after confirmation of all the details, one can proceed with filing the return of income. In case of return is filed electronically without digital signature and without electronic verification code do not forget to post the acknowledgment of filing the return of income at CPC Bangalore within 120 days of filing return of income.
AUTHOR – Akshat garg