Income Tax E-filing
An Income Tax return, or an ITR, is a document used to file the income and tax to the Income Tax Department. It helps the Government to know about the income you have earned in a financial year and the relevant tax liable on it. A taxpayer's income plays an important role in determining his tax liability. This income could be in any form like salary, income from property, or earnings through dividends, interests, capital gains, business profits, or other sources.
As per income tax laws, an individual or business that earns any income during a financial year must file a return every year. These tax returns need to be filed by an individual or a business before a specified date. There is provision for penalty if a taxpayer fails to abide by the deadline set for Income Tax filing.
For the financial year 2019-20, if your income exceeds Rs 2.5 lakh (Rs 3 lakh for those aged 60 years and above), you must file an ITR in India. You also need to do ITR filing if you seek to claim a tax refund in case an excess TDS has been deducted from your income.
You can either file a paper return or do an income tax filing online. This online filing of income tax is known as Income Tax E-filing. If your income is higher than Rs 5 lakh, or you are seeking a refund, you must file taxes online. There is an exception in the case of Super Senior citizens who are 80 years or older.
What is an Income Tax E-Filing?
Income Tax Returns or ITRs have to be filed annually by all taxpayers on or before the specified due date. ITR filing forms are used by tax-payers all over India to notify the Indian Income Tax department of the income and taxes accrued over that year. This income tax filing of returns can be done on paper or online.
Income Tax E-filing or e-filing ITR is the process of filing and submitting your tax returns using electronic means i.e., file taxes online or over the internet. This is done using customized and specialized taxation software for ITR filing. This has been pre-approved by India’s Income Tax Department for Income Tax E-filing.
The process involves submitting your ITR through applicable forms recommended by the IT department, which are ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, and ITR 7. The type of form needed for ITR filing depends upon your source of income, which is going to be taxed. It will also depend upon the amount of the income earned and the category the taxpayer belongs to, which may be, individuals, HUF, company, etc.
Why should you choose Income Tax E-Filing?
One should choose E filing income tax for the following reasons:
Income Tax E-filing is prompt and hassle-free and helps you to file taxes online easily. Not only does it expedite the process of filing your tax return, but it can help you obtain a quick tax refund from the income tax authorities promptly.
Easy and faster Tax Refund
If the taxpayer has paid excess tax, refunds are reimbursed sooner if he prefers to file taxes online or E-filing ITR timely. In case you have paid extra tax in a financial year, then you become eligible to receive an income tax refund from the Income Tax Department. E-filed returns are processed faster than paper ones.
Helpful in Loan Approval
ITR documents are frequently required by most of the banks when approving your home/vehicle/personal loan applications. Tax returns serve as additional proofs that you would least likely to default on payments. E-filing ITRs is helpful in this case.
Helpful in Claim Adjustments
If you want to claim adjustments against past losses, and income tax filing of returns is necessary. An income taxpayer cannot file a revised return if he has not filed the original return. Also, the non-filing of returns can attract a penalty of Rs 5,000 under the Income Tax Act.
Types of Return Forms for Income Tax E-filing
If you intend on e-filing ITRs or planning to file taxes online, there are several forms available. You should fill them correctly and completely and submit them to complete your income tax filing.
After logging in to the Income Tax e-Filing portal, you can select the e-filing ITR Form, prepare and submit it.
For those who cannot submit online can download the JAVA utility or Excel utility for E-filing ITRs. You can then prepare the XML and later login to the Income Tax e-Filing portal and submit it on time.
Seven forms are made available by the IT Department for Income Tax filing or e-filing income tax online:
This income tax return form is to be filed ONLY by an individual taxpayer. It is also known as the Sahaj form. Taxpayers in any other category, like a business, company, or a HUF, cannot use this form for filing their returns. This includes Resident individuals (apart from NORs) with a total income of up to Rs.50 lakhs. This is not to include an individual who is either a company’s director or has invested in equity shares.
The following people need to do ITR filing using the ITR-1:
- A person with income through salary/pension, or from other such means
- A person with income from only one housing property
- An individual who does not have income from any other business/capital gains
- Individuals who do not own any assets/property in Non-Indian countries
- A person with agricultural income less than Rs 5,000
- A person whose income is only from investments, schemes, or FDs, etc.
- Individuals who have not accrued income from sources like horse racing, lotteries, etc.
- Those who want to club the income of their spouses or child with their own, as long as the income to be combined falls in any of the above-mentioned sections
This is a recently introduced form from the assessment year 2015-16. This form can be used by an individual taxpayer or a HUF i.e., Hindu Undivided Family for income Tax filing or e filing ITR.
Who can use the ITR-2A form?
- People with income from salary or pension
- People with income from two or more housing properties
- A person with agricultural income below Rs 5,000
- A person who has no income from any other business/capital gains
- People with income from different investments/sources such as FDs, stocks, and shares, etc.
- A person who does not have any property/assets/source of income from any country abroad
Unlike salaried people and pensioners who use ITR-1, people who have income from the sale of assets/property, need to use ITR-2 for e-filing ITR. Also, those individuals who accrue income from countries abroad need to file their returns in Form ITR-2. HUFs i.e., Hindu Undivided Families and Individuals can use this form for their Income tax filing or E-filing ITRs.
The following people can use ITR-2 forms for e-filing ITRs who do not have income from profits and gains of business or profession:
- People with income from salary/pension
- People with income from capital gains, i.e., the sale of assets/property in India
- A person with income from two or multiple housing properties
- A person who own assets abroad
- People who have income from Non-Indian countries
- A person with agricultural income more than Rs 5,000
- A person with income accrued from horse racing practices or lotteries
ITR-3 Form is useful for the Income-tax filing for the following people:
- An individual taxpayer or a HUF i.e., Hindu Undivided Family who operates as a firm partner but is not involved with any business under the firm
- This is also to be used by individuals whose income is not accrued from the business conducted by the firm
- Those taxpayers usually file this form for return purposes, whose taxable income earned from the business, is in the form of salary/ commission/ bonus/interest/ remunerations
This form is to be used for ITR filing/e filing ITR by individuals, HUFs, and firms (other than LLP) who are Indian residents and have a total income up to Rs 50 lakhs and have income from business and profession which are mentioned under Sections 44AD/44ADA/44AE. The exception here is an individual who is a director in a company or has invested in unlisted equity shares, who will NOT use this form for Income Tax filing.
The ITR-4 form applies to the following:
- People who have business as their source of income, i.e., those individuals who conduct a business or who earn income through a profession or an undertaking
- Taxpayers who receive income from any other speculative sources like sudden windfalls, lotteries, housing properties, etc., along with business income, are also eligible to file their returns using ITR-4 forms
The ITR-4S form is used by any individual or HUF i.e., Hindu Undivided Family for ITR filing in special circumstances. It applies to businesses where any income earned is based on a special calculation method. This form is also known as the Sugam form.
This form is to be used for the Income-tax filing or E filing ITR of the following:
- Individuals with business income
- Individuals with income from only one housing property
- Individuals whose income is not through an asset sale or capital gains
- Individuals with agricultural income less than Rs 5,000
- Individuals who do not own any assets/property in Non-Indian countries, or who do not earn income from any non-Indian source
Only bodies listed below are entitled to use the ITR-5 form for filing IT-returns:
- LLPs or Limited Liability Partnerships
- AOPs or Association of Persons
- BOIs or Body of Individuals
- Co-operative Societies
- Artificial Judicial Persons
- Local Authorities
The ITR–6 form is primarily to be used by all companies for income Tax filing or E-filing ITRs, except those companies or organizations that claim tax exemption under section11 of the Indian Income Tax Act.
According to Section11, an organization that receives income from a property that is used for religious or charitable purposes is exempt from taxes. This particular income tax return form is ONLY available online for Income Tax e-filing.
ITR-7 form is to be used by the following individuals or companies that need to file their tax returns as per the following 4 sub-sections of Section 139 of the Indian IT Act, 1961:
- Section 139(4A) – This section deals with returns that can be filed by individuals who accumulate income from any property used for a religious or charitable purpose like a trust
- Section 139(4B) - This section specifies returns that are to be filed by political parties whose total income earned is more than the non-taxable limit
- Section 139(4C) - This section deals with the income tax filing of returns of the following:
- Any institution/association covered by Section 10(23A)
- Any institution listed in Section 10(23B)
- Association involved with scientific research
- News agency
- Funds, medical institutions or educational institutions
- Section 139(4D) - This section deals with returns to be filed by colleges, universities, or any other institution. Here, there income returns or losses are not required to be provided in formats listed in other provisions outlined under this section
Documents Required for E-filing ITR
Before you begin to file taxes online or start your Income-tax e-filing process, you should keep all the relevant income and investment documents handy. Also, you should be aware of the right ITR form to be filled up for your returns. It is now mandatory for taxpayers to link their AADHAR with PAN for the AY 2019-20 to file taxes online. This should be done on or before the date set for ITR filing or E filing ITR.
There is a different set of documents required by each category of taxpayers for ITR E filing.
For Salaried Individuals
- PAN card
- AADHAR card
- Monthly salary slips
- Form-16 – TDS certificate issued by the employer to provide details of the salary paid to you and any TDS deducted on it
- From the AY 2019-20 ITR E-filing, it is now essential to gather the information on all taxable allowances received, and the amount claimed exempt out of allowances, e.g., HRA, LTA, or leave travel allowance, etc. and disclose the same in the IT return.
Documents for Interest income
- Bank statements or passbook for bank or post office savings account or PPF account for interest on a savings account
- Interest income statement for fixed deposits
- Form-16A- if TDS is deducted on interest received from fixed deposits, recurring deposits, etc. as per the current tax laws
- Form-16 B – If you have sold a property, you should furnish Form 16B, with TDS deducted on the paid amount
- Form-16 C- If you are receiving rental income, then you should furnish Form 16C from your tenant, for TDS deducted on the rent received by you for ITR e filing
- Form 26 AS – This form has all information about taxes deposited against PAN. It is a kind of consolidated annual tax statement
- TDS deducted by the employer
- TDS deducted by any other organizations from payments made to you
Any Advance taxes deposited by you
Self-assessment taxes paid by you
Tax saving investment proofs
If you have invested money in some Sec 80C investments like NSC, PPF, ULIPS, LIC, or ELSS, you should furnish those policy numbers for ITR e filing. (The maximum amount to be claimed under Section 80C is Rs 1.5 Lakh)
Similarly, proofs of policy to claim deductions in section 80D to 80U like any health insurance premium for self and family, or interest on education loan are also to be furnished for ITR e filing. The home loan statement from the bank is also to be required for e filing income tax.
Stock trading document
Note: The ITR you file is an 'annexure less' return, i.e., there is no need to attach or send any documents or proofs are required to be attached with the returns. The certificates /documents/ receipts that you use for quoting income, interest, and investments should be kept ready for future references and need not be attached or sent to anyone.
How to check ITR E filing status?
Once you file taxes online, you will see a 15-digit acknowledgment number on the screen that confirms the submission of your ITR e-filing. You must then verify your tax return, which you can do from your Net banking accounts. The status of your return then becomes "verified."
Once the E-filing ITR processing is complete, the status of your ITR E-filing changes to 'ITR Processed.'
If you want to know the stage of your tax return after filing it, you can check the ITR E-filing status online. These are the steps to check the status:
Without login details
- Access your ITR e-filing website
- Click on the ‘ITR status’ on the website
- It will direct you to a new page where you will have to fill in your login details
- Enter your PAN, ITR acknowledgment number, and the Captcha code on the screen
- Once you do this, you can see the status of your filing displayed on the screen
With login credentials
- Login to the ITR e-filing website with your pre-existing credentials
- Click on the option 'View Returns/Forms'
- Select the option "Income tax returns". Choose the assessment year from the dropdown list that is displayed
- Your ITR E filing status will be displayed on the screen
Features of Income Tax E-filing
Some of the key features of Income Tax e-filing are discussed below:
Accessibility to past income data
You can access your past income and tax data easily while you file taxes online. This is because most ITR e-filing applications securely store data so that you can easily access it when you file subsequent returns.
Proof of Receipt
When you e-file your ITR, you get prompt confirmation of filing. You can see it on your screen and later, through email on the registered email id.
Easy to Use
ITR E-filing is user-friendly and easy to use. The e-filing websites give detailed instructions so that taxpayers can easily file their returns without any hassle.
Allows Electronic Banking
ITR E-filing provides you the convenience of direct deposit for your refund and direct debit for tax payments. You can also opt for “File now, Pay later” tax option when you file taxes online.
ITR E-filing document serves as a proof of income
Your e-filed Income Tax Return documents serve as income proof as it is a government-verified and the official document.
Benefits of Income Tax E-filing
Core benefits of e-filing of income tax are as follows:
When you compare online while e-filing Income Tax returns, the acknowledgment is quick. If you are eligible for any tax refunds, they are processed faster than paper-filed returns.
Accuracy and error-free
E-filing software is validated and approved by the Indian IT department and use the right validations. Paper-filings can be prone to errors due to complex calculations and adjustments, but E-filing income tax can minimize errors to a large extent.
You can e-file your tax returns from the comfort of your home or office as there is no time and place constraint in filing returns online. E-filing facility is available 24/7. E-filing income tax can be done anytime and anywhere at your convenience.
Confidential and Secure
E-filing income tax procedures ensure that your income and tax data is not accessible to anyone either by design or by chance. In case of paper filing of taxes, your details can fall into the wrong hands at your chartered accountant's / IT Department’s office, but in e filing, the data is secure and encrypted over the network.
Helps in Document Verification
E-filed Income tax returns can help you to prepare documents that establish your income chart. You can use them while applying for loans or a visa.
Help to claim quick TDS Refund
If you have any kind of Tax Deduction at Source (TDS) and you wish to claim a refund on the TDS as per the tax laws, then you can always prefer e filing income tax.
As a taxpayer, you should file the Income-tax returns regularly and complete the ITR filing process before the scheduled deadline. This will help you to keep the Income Tax Department informed about your income and taxability. This will keep you on the right side of the law.
Ans: As per the tax laws laid down in India, it is now mandatory to file the income tax returns if the income exceeds the basic limit of exemption. The income tax returns should be on time and with accuracy. A delayed or a missed return or ITR filing will attract late filing fees and can impact your financial competency by delaying the chances of getting a loan or a visa.
Ans: Yes, you can file income tax returns for many years you have missed. However, you should contact your AO or your Assessing Officer to file previous year returns manually. Any past years' returns cannot be e-filed on any portal, but their ITR filing has to be done manually.
Ans: The taxpayer is not required to attach any documents like proofs of investment, TDS certificates, etc. for ITR filing. Whether you file your ITR manually or electronically, ITR forms remain attachment fewer forms. However, the taxpayer is expected to keep these documents and receipts intact. He can produce them before the tax authorities when demanded in situations like an assessment or an IT inquiry.
Ans: Yes, you can pay tax to the government directly on the Income Tax Department’s website. You should use your net banking account with Challan 280, which is available on the website.
Ans: Yes, even if your company deducts tax at source, you should file an Income Tax return. Filing a tax return and TDS are two different things. Your ITR shows that you have paid all the tax you needed to pay. The income tax return is also beneficial when applying for a loan or visa.
Ans: The Income Tax Department has come up with a separate portal so that any individual or business organization can file their income tax returns online. You should visit the official website of the Income Tax department for ITR filing. This is a website with full features to make the tax filing process easy and feasible, like E-Pay Tax/Challan, a Tax calculator option, E-Verify, Tax Calendar, etc.
There is no charge for filing an income tax return on this website. You can file your return online here and also generate an e-return. There is also an instructional guide to give you step-by-step instructions to make the process of Income Tax e-filing easy and hassle-free.