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How to File Income Tax in India? A step-by-step guide

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A tax return is described as a form, or various types of forms, lodged with the taxing authority disclosing revenue, expenditure, and other related tax details. Taxpayers filing their income tax returns are allowed to decide the type of income tax return Form (ITR) they need to fill out before their returns are filed. The Form to be filled depends entirely on the income received by the taxpayer, or under some situations, where the taxpayer retains properties in a country other than India or derives any form of income from a country other than India.

The following are the basic measures to file your income tax returns online:

1. Log in to the portal

Sign in to the site of the Income Tax Department (www.incometaxindiaefiling.gov.in) for the online filing of returns. Use your Permanent Account Number (PAN) to log in, which will act as the user ID.

2. Download the corresponding ITR type

'Upload' under the relevant assessment year, go to e-filing and select the appropriate Income Tax Return (ITR) Form. If you are a salaried person, download ITR-1's (Sahaj) return planning software.

3. In Form 16, enter info

Open the Excel Utility, follow the instructions, and enter Form 16 in full detail.

4. Compute all-important tax data

Compute tax due, pay tax, and enter the applicable challan information in the tax return. You can skip this move when you do not have a tax obligation.

5. Check the information above

Confirm the information you entered, and create a file that will be saved to your device automatically.

6. Return Submission

Go to the section called 'Submit Return' and upload the file.

7. Digital signature

The file can be digitally signed when prompted.

8. Proof of verification from ITR

You can get the confirmation on your registered mobile number. The ITR-Verification recognition form is created, and can be downloaded as well.

9. E-verification Return

E-verification removes the need to give CPC-5 a hard copy of the ITR-5 certificate. You can e-verify the return through any of the following modes:

  • Net Banking
  • Bank ATM
  • Aadhaar OTP
  • Bank Account Account Number

Several kinds of ITR types

There are multiple sections on the Income Tax Department of India portal that can be used to file a tax return, depending on various sources of income and taxpayer categories (resident/non-resident/individual/non-individual, etc.).

There are seven Forms available, from ITR-1 to ITR-7, for the assessment year. A few Forms among these categories might be longer than others and may require extra disclosures, such as declarations of benefit and loss. To help you understand which Form suits your criteria better, each of them are briefly discussed here:

  • ITR-1
  • ITR-2
  • ITR-3
  • ITR-4

The following Income Tax Return Forms stay relevant only for companies and firms which can be filled online:

  • ITR-5
  • ITR-6
  • ITR-7

ITR-1

This Income Tax Return Form is also known as the Sahaj Form, and must be filed exclusively by an individual taxpayer. Any other establishment liable to pay tax is not entitled to use this Form to file its returns. This Form is applicable for the following entities:

  • A person who earns his income through wages or other means, such as pensions
  • A person who earns his livelihood from a single housing estate
  • A person who does not have revenue from any other corporation, or who has no revenue from the selling of any properties, i.e. capital gains

ITR-2

The ITR-2 Form is usually used by people who have accrued income from the selling of property or properties. This Form is also useful for people who receive money from countries outside India. This Form is applicable for the following entities:

  • People who has salaried income, or through means such as retirement
  • A person whose source of income is in India through the selling of assets or land, i.e. capital gains
  • A person who tends to earn revenue from more than one housing estate

ITR-3

The ITR-3 Form is useful to an independent taxpayer who works solely as a company partner, but does not perform any business under the company.

ITR-4

For certain people who operate a business or who receive money from a profession, this sort of ITR Form is beneficial. This method applies to all forms of undertakings, undertakings or occupations, without restriction to the profits received.

ITR-5

This Form is for anyone other than an individual person, like HUF, business, or anyone filing form ITR-7.

ITR-6

All companies use the ITR-6 type Form, except those companies or organisations who demand tax exemption in compliance with Section 11.

ITR-7

This Form applies to all individuals, including undertakings, who are required to file tax returns under Section 139(4A), Section 139(4B), Section 139(4C), Section 139(4D), Section 139(4E) or 1399(4E) respectively (4F).

Benefits of Filing Income Tax Return Online

The method of filing income tax returns used to be both tiring and complicated, but the pressure has decreased with the advent of ITR e-filing. An individual is supported in the following ways by the online Form for filing income tax returns:

When you have signed in to your account, click on the "e-file" tab, and choose the option "Return income tax".

  • Not filing the income tax return on time will result in fines before the fee is made for each day. The online filing of income tax returns gives you the ease of filing your returns from anywhere, and at any time.
  • Income tax reporting online allows you to maintain an efficient database of all financial dealings with the IT Department. This record may become your evidence of income in case you receive a loan from any bank or financial institution.

Also read:

1) Why Do We Pay Income Tax in India? Importance, Applicability & more
2) Provisions for Income Taxes in India Applicable for Salaried People.
3) How To Pay Income Tax Online? Step-By-Step Guide.
4) The USA vs India: Taxation System

FAQs

Q. When submitting my tax returns, what papers would I need to submit?

Ans. When you are filing your income tax forms, you do not need to file any papers. However, in the event you get a letter from the tax department, and have to provide it to the tax authority at a later date, keep key records such as your Form 16, audit results, investment evidence, etc. handy.

Q. If I made a mistake while filing it earlier, how can I fix my ITR?

Ans. You have the option of fixing your error by filing a revised return if you have made a mistake while filing your ITR. Although there are no fines for filing a revised report, you must bear in mind that the updated return must be submitted before the examining officer finishes the assessment, or at the close of the relevant assessment year, whichever is sooner.

Q. What are the online websites where I can file for ITR?

Ans. A separate platform has been created by the Income Tax Department to ease the tax payment process, such that any individual or business entity can electronically file their income tax returns. All you have to do to register your income tax return within a couple of minutes is visit www.incometaxindiaefiling.gov.in.

Q. How to check online for ITR status?

Ans. When you have filed and checked your income tax returns, the tax return status is 'Verified'. The status becomes 'ITR Processed' after the process is complete.

  • Visit the ITR Website.
  • Select the 'ITR Status' option on the left-hand side of the homepage under the 'Services' tab.
  • You will be redirected to a new website after choosing the alternative, where you will be requested to include your PAN, ITR acknowledgement number and Captcha code.
  • Send the data, and your device's screen will show the status.