ITR or the Income Tax Return is a document enabling taxpayers to declare their income, investments, and claim deductions in a financial year. The ITR is filed with the Income Tax Department to clear any outstanding tax liabilities. The Income Tax Act, of 1961 makes it compulsory for salaried employees and self-employed individuals to file an ITR. You might need to file an ITR for other purposes, such as carrying forward income, claiming an income tax refund, applying for a visa, or a bank loan.
E-filing process is used to file an income tax return in India. It is a completely online process on the income tax portal, where you can log in using your PAN credentials. The e-portal streamlines and simplifies the tax filing process and gives a comprehensive report of your outstanding liabilities. It also allows you to claim deductions by filling out forms declaring your investments and deductible expenses. Let us see how to file an ITR step-by-step and five important things to know before filing.
How to E-File Your ITR on the Income Tax Portal?
- Step 1- Log in to the official https://eportal.incometax.gov.in/ ITR portal using your PAN credentials. You will receive an OTP on the registered mobile number for secure sign-in.
- Step 2- Click on the ‘e-file’ tab and Select ‘Income tax Return’ > ‘File Income Tax Return’. Select the right Assessment Year for your filing. If you are filing reports for the financial year 2023-24, then your assessment year will be 2024-25.
- Step 3- Select the status as ‘Individual’ on the next page. Select the ITR type you are filing. There are 7 ITR forms, of which ITR 1 to ITR 4 are applicable for individuals and HUFs. A taxpayer needs to ascertain what form they are supposed to fill out. There is an option that guides you through the process.
- Step 4- Choose your reason for filing the ITR. If your income exceeds the exemption limit or fulfills other mentioned criteria, you are eligible to pay the income tax.
- Step 5- Validate all the information. Most information will be pre-filled based on the data provided by your employer. Other basic information like aadhar, PAN, and bank account number if provided, should be validated. Disclose all your income, investments, and deductions. Review the final summary of your ITR and make the payments of balance taxes.
- Step 6- E-Verify your return within 30 days of filing the ITR. Failing to do so is considered a failed filing attempt. You can e-verify your ITR using Aadhar OTP, electronic verification code (EVC), or net banking. Ensure you complete the entire filing process before the set deadline by the government. The deadline for filing ITR for FY 2023-24 is 31st July 2024.
5 Things to Know Before Filing Your ITR
Eligibility to File an ITR- You are required to file an ITR if your income is above the basic exemption limit; you have deposited more than 50 Lakhs in a savings account and 1 crore in the current account; spent more than 2 lakhs on foreign travel, TDS or TCS is more than 25000; business turnover is more than 60 lakhs; or professional income is more than 10 lakh INR.
Deadline For Filing- There is a fixed, prescribed deadline every year by the income tax department to file the returns. Any filing beyond the deadline is considered a belated ITR and attracts penalties. Currently, the penalty is restricted to Rs.5000 if paid till 31st December 2024.
Claim Deductions- As a taxpayer, you can claim certain deductions in your taxable income if you can show any investments or expenses. Deductions under 80C, 80CCC, 80D, etc. are possible in tax-saving options like mutual funds, LIC, deductions for higher education loans, etc. Consult a professional to know all the schemes.
Exempted Income- After the proposal of the New Union Budget 2024, income up to 3 Lakh rupees is exempted from tax. Also, the standard deduction has been increased to Rs.75000 from Rs.50000.
Tax Slabs Differ With Income And Age- There are separate tax slabs for different groups of income. Also, tax slabs change if you are a senior citizen (above the age of 60) or super senior citizen (above the age of 80).
Filing an ITR is a mandatory activity that every taxpayer must complete within the deadline. It creates a valid proof of income or net assets, in case you need to apply for a loan, start a business, or require a visa. You need a filed ITR copy even if you’re applying for government scholarships or tenders as a professional. Credit cards and insurance are issued only after analyzing your income proof. Therefore, it is advised to file an ITR even if your income is below the exemption limit and liability is zero. Follow the six easy steps to file your return and avoid paying any fines.
