Income Tax Return simply involves a form which you utilize to enter information of your yearly earning and other details and submit to the department. This includes income from salary, profit in business, sale of house or property, dividend or capital gains and interest received among others. Each taxpayer has to pay tax on the basis of the yearly income. If you have paid tax in excess during a year, the money is refunded back to you by the Income tax Department.
Is filing ITR compulsory for all Indians?
Income Tax rules dictate that if you earn more than the limit that is exempted from being taxed by the Government, you are compulsorily required to file your tax return according to the tax slabs for each year. Filing your ITR post the due date may attract a penalty and also become a deterrent in getting a loan or visa approved in the future.
Filing Income Tax Return is a compulsory or everyone, with a few exceptions:
Filing your ITR electronically:
You can now submit your tax return sitting at home if you have an internet connection. This has been made possible with e-filing that uses pre-approved tax preparation software by the Income Tax Department. More and more taxpayers are increasingly filing their returns online given its benefits such as:
The IT Department has released e-filing software for all ITR forms. Once you have all the required documents ready, you can file tax returns online by following these steps:
1) Go to Income Tax e-Filing website
2) If you are new to e-filing, register yourself on the portal. And if you are already registered, login to your income tax account by providing your User ID (your PAN), Password and Captcha.
3) Click on the ‘e-File’ menu and click ‘Income Tax Return’ link.
4) On Income Tax Return Page, PAN will be auto-populated. Select assessment year (AY) and the applicable ITR Form Number.
5) Select filing type as original/revised return, submission mode as ‘prepare and submit online’ and click on ‘continue’.
6) Read the instructions carefully and fill all the mandatory fields of the online ITR form. (Tip: To avoid loss of data due to session time out, click on ‘Save Draft’ button from time to time.
7) Choose the appropriate option from the ‘Taxes Paid and Verification’ tab.
If you choose ‘I would like to e-Verify’ option, e-verification would be done through one of these - EVC generated through bank ATM or ‘Generate EVC’ option under ‘My Account’; Aadhaar OTP; Pre-validated Bank Account; Pre-validated Demat Account or Digital Signature Certificate.
On choosing the other two verification options, the ITR will be submitted but you must e-verify later by using ‘My Account e-Verify Return’ option or the signed ITR-V should be sent to CPC, Bengaluru.
8) Click ‘Preview and Submit’ button. Verify all the data entered by you and submit the ITR.
9) In case you have opted for e-Verification, the EVC/OTP should be entered within 60 seconds. In other cases, the submitted ITR should be verified later by using the ‘My Account e-Verify Return’ option or by sending signed ITR-V to CPC.
Filing your ITR Offline:
One can file ITR offline by furnishing a physical paper form/ a bar-coded return, in return of an acknowledgement issued by the Income Tax Department. Filing income tax return offline is allowed in the following conditions:
Therefore, all those residing within India have to pay tax on their income to the Government of India as per the Income tax rules and regulations. Whether you are an individual, association or a firm, LLP, local authority or a Hindu undivided family, your income for each financial year is taxed in accordance with Income Tax laws. Hence filing your Income Tax return (ITR) on an annual basis is important.