Learn Everything About Filing Income Tax Returns In India.

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:

1. For individuals below 60 years of age with gross total income of less than Rs 2.5 lakhs (before claiming any deductions), do not require filing an ITR.

2. In case of resident senior citizens (aged between 60 to 80 years), this limit is Rs.3 lakh and Rs.5 lakh for super senior citizens (aged above 80) resident in India.

3. Senior Citizens aged 75 years and above with only pension income and interest income are not required to file return of income.

Currently, there are different ways to file your income tax returns on the new Income Tax Portal.

Ways in Which a User Can File Income Tax Returns

There are two different ways to file the Income Tax Returns for the FY 2020-21:

a) Online mode
b) Offline mode

a) Online Mode

Here are the steps involved in online mode:

Step 1. Login to the Income Tax e-Filing portal, using PAN and login details.

Step 2. On the Income Tax Return Page, select your ITR Form Number and file your income tax return online.

Step 3. After filing your Income Tax Return, proceed towards e-Verifying your Income Tax Return.

Step 4. The e-Verification process can be done using any of the following modes:

EVC generated through bank ATM or Generate EVC option under My Account
Aadhaar OTP
Pre-validated Bank Account
Pre-validated Demat Account

Step 5. After verifying and submitting your Income Tax Return, view your submitted ITR form on the My Account > e-Verify Return option or by sending signed ITR-V to CPC.

Step 6. Finally, you can view your uploaded Income Tax Returns.

b) Offline Mode

If you want to file the Income Tax Return, you need to first download the applicable ITR form, fill the form manually, generate the XML file and then upload it on the Income Tax Portal. To e-File the ITR using the upload XML method, the user must priorly download either the Excel or the Java utility for ITR Filing.

Documents Required To File ITR

It is very important to keep all the required documents ready during the income tax filing process. Here are the key documents that you will need while online return filing:

• Bank and post office savings account passbook,
• PPF account passbook
• Salary slips
• Aadhar Card
• PAN card
• Interest certificates from the banks and post office

Benefits of ITR Filing Online

Although you can file your income tax returns in offline mode as well, there are some benefits of ITR filing online. Here are the benefits of ITR filing online:

1. Claiming a Tax Refund

If you have paid excess income tax, you can claim a tax refund only if you have filed your income tax return online.

2. Proof of Income

If you are a businessperson or self-employed, online income tax return filing will serve as your Proof of Income, since Form-16 is available only for salaried taxpayers.

3. Processing of Loans

If you apply for a home loan or vehicle loan or any other loan, the banks demand copies of the latest income tax returns filed to judge your sources of income.

4. Claiming Losses

Online income tax return filing is mandatory if you wish to claim certain losses for an individual taxpayer, such as losses from capital gains, business, or profession. Besides, it also helps you track losses that you can claim in the future.

5. VISA Application

If you are planning to migrate for a job or conduct business tours, immigration authorities demand copies of the latest income tax returns filed. The online income tax return filing ensures the smooth processing of VISA applications.

Conclusion

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.

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