Overview of Income Tax Return Filing

The income earned by the individuals and companies is subjected to tax liability. The tax levied on the earnings of a person is Income tax is collected and managed by the Central Government. Such tax on income earned is due in the same financial year wherein it is accrued in the form of credit tax. But the tip and calculation of the salary as well the tax liability is presented in the Assessment Year.

This implication form is known as Income Tax Return. The time limit for filing ITR is different for various taxpayers based on the guidelines. ITR Filing is mandatory for Taxpayers whose income surpasses the prescribed income limit. This process is regulated under the Income Tax Act 1961.

What are the Benefits of Filing the Income Tax Return?

Many individuals and entities have zero tax liability and therefore they are not required to file returns mandatorily. Even though they have some sort of income occurring.However, in recent years, the Govt. of India has taken some strict measures to enforce the Income Tax Law by connecting various advantages for prompt taxpayers-

Other Advantages

• Precise Financial Document

  ITR Filing certificates are evidence of financials and its records. Peculiar financial documentation is a requirement for availing loan or visa.

• Avoid Interfaces from Tax Authority

  In the matter of late or wrong docility of ITR, a warning is served by the Income Tax authority/department.

• Sustain Losses

  With ITR Filing, losses can be carried forward against house property & depreciation.

• Commercial Goodness

  The ITR registered with the Government determines the retail value of the taxpayer. The development of ITR shows the business capacity and also improves the capital foundation of a person. Therefore, the track of income and financial worth is decided by the beforehand filed ITR.

• Loan Appearances Plus 'High-Risk' Protection

  The estimates and the capital base determined by the income tax return are applicable for loan processing. The More leading the financial value is, the more comfortable the loan applications will be.

What is the Procedure for Filing the Income Tax return?

The Income Tax department has made it suitable for all taxpayers to file their income tax returns online, called e-filing or electronic filing. The ITR e-filing is relatively easier as it does not connect any complicated paperwork distinct with the conventional offline filing method, which can be completed from any place at your comfort.

The Income Tax portal has exclusive software intended for filing seven Income Tax Return forms. Moreover, it accompanies ITR1 and ITR4 to be done online without installing any such software in the system. An individual/ entity must follow the requisite steps online by following the subsequent steps:

Step 1-Arranging and Organizing the Documents-

Before filing the ITR, the taxpayers will have to arrange and organize all the requisite documents of financial value i.e. Particulars of income, investments, assets, bank accounts detail. Also, the government documents like Permanent Account Number (PAN) and Aadhaar number.

Practically, these documents are not attached while filing ITR online but still one needs them to fill the form due to the details inscribed on the form. While filing the ITR, the documents related to income other than salary, like capital gains, rental income, and dividend income will also be needed.

Step-2 Preparing the Checklist For filing the Online ITR

Preparing the checklist is the essential thing that a taxpayer would require for filing the ITR online. The Documents thetaxpayer would need may vary depending on the type of income the taxpayer is having-

I. Taxpayer’s Details

• Id and Address Proof of the Taxpayer i.e. PAN Card and Aadhar Card.
• Particulars of Domestic assets and liabilities and foreign assets

II. Income-related Details

• Particulars of exempt income earned during the year
• To fill the particulars of income (Form 16/16A/16B)
• Balance sheet, P&L account statement, and other audit reports, wherever applicable
• Particulars of Sales/Turnover/Gross Receipts during the year

III. Bank-related Details

Particulars of all bank accounts held during the year (IFSC code, account number, name, and nature of account) along with the bank statements.

IV. Taxation related Details

• Copy of last year tax return
• TDS certificate
• Saving certificate or deduction
• Form 26AS to cross-check TDS details

V. Investment and Expense Related Details

• Loan statement to claim a deduction on Principal amount and interest on a loan
• Mutual funds account statement(If any)
• Premium receipt for life insurance plans and Medical insurance premium and related receipts, etc.

VI. Other relatable documents.

Step-3 Creating an account for filing the ITR Return

After collecting all the requisite documents, the taxpayer must log in to its ITR e-filing account through the income tax department’s website. The particulars like user ID (your PAN), password, and captcha code will be needed for logging.

However, if a taxpayer is filing the return for the first time, then he may create an ITR e-filing account on the same website with few other particulars.

Step-4 Selecting the ITR Form

Earlier the Income Tax Filing was such a hard process, making the taxpayer standing in long lines to file an ITR. But now, with the help of digital representation, the electronic Income Tax Return (ITR) filing can be done easily. The Income Tax Department has determined 7 forms in which income tax needs to be filed. Filing the ITR FORMS depends on the group in which the business or the individual falls into.

Selecting the right ITR form is very essential. As if any taxpayer selects the wrong ITR form, the particular form is considered to be inoperative and flawed, so it is preferable to be attentive.

Step-5 Filling the requisite particulars

The next step is to file the details of the taxpayer i.e. Aadhaar number which is mandatory to file an ITR return online as the system will not allow the filing of return online without this particular.

Step-6 Verification of Returns and Uploading the final details

The last step for filing the ITR return is to verify the details and upload it on the Income Tax portal. The window will remain open for 120 days to get your return verified after uploading the documents.