Category : New to Investing December 19, 20235 minutes read
Learning how to file ITR is vital for every adult citizen, regardless of whether you’re eligible for tax or not. ITR can be used to obtain a loan, travel abroad and help keep a record of your income. This guide will enable you to file ITR online and avoid any fees for late filing. Moreover, you will learn the difference between the various ITR forms and which form is appropriate for you.
When wondering how to file ITR, you don’t need to fret. Online ITR filing is quick and simple. You can do it yourself online. Just check the references above on how to file ITR on your own.
Individuals who want to file ITR manually can visit the official income tax site on the web and file an ITR manually. Make sure you have all the required documents to complete the filing process.
ITR filing is mandatory for those individuals that exceed the maximum exemption limit.
Income tax is payable when the gross total taxable income surpasses ₹2.5 lakhs as per old regime and ₹3 lakhs as per new regime.
As per the old regime, the minimum income to pay tax is ₹2.5 lakhs, and as per the new regime, it is ₹3 lakhs.
People with any capital gains income such as gold, equity shares, profit from the sale of mutual funds, house property, and other similar assets are not eligible for ITR.
The difference between ITR-1 and 2 is that ITR-1 is applicable only to individuals while ITR-2 is for individuals and HUFs. If you are an individual with salary income and rent from more than one property, you can file ITR-2.
If you fail to file it before the due date, you will have to pay a late fee of ₹5000. Individuals whose annual income is less than ₹5 lakhs will have to pay a late fee of Rs ₹1000. You may also face imprisonment for a period ranging from six months up to seven years.
An unemployed individual can file an ITR, considered a NIL return, but it is not compulsory to file NIL returns.
It can take anywhere between 20-45 days for income tax refunds.
Under the e-File tab, click on Income Tax Returns and navigate to View Filed Returns. You can then download the ITR acknowledgement.
Introduction
An ITR, which stands for Income Tax Return, is a form for Indian citizens to file their income taxes with the government of India. Anyone who receives income, be it as a salary, from property rent or through investments, and this income is above the basic exemption limit, is required to file an ITR compulsorily. For this, it is essential to know how to file ITR.
An ITR is filed annually to declare one’s income from various sources and then pay the required tax on income, as stipulated by the government.
However, many Indians find the ITR filing process time-consuming and hence, skip it altogether. However, filing your taxes is not rocket science. In this article, we will provide you with all the information you need on how to file ITR, such as documents required for filing ITR for salaried employees, the due date by when it must be filed and how to file ITR after the due date.
Let us dive deep into how to file ITR, basic requirements, the difference between old and new tax regimes, and much more.
If your income is more than ₹2,50,000, be it from a salary, business income, rent on a property, investments or other sources, you must know how to file ITR.
These are all the documents you require for offline ITR filing. If you are wondering how to file ITR online and what documents you need, the same applies.
- Aadhar and PAN card
- Form 16
- Salary slips
- Banks and post office interest certificates
- Tax-savings investment proofs
- Health insurance premium receipts
- Proof of capital gains
What Are the Major Differences Between the New and Old Tax Regimes?
In the Budget 2020, Finance Minister Nirmala Sitharaman introduced a new tax regime to simplify the tax filing process and reduce compliance burden. However, the new tax regime does not allow for many of the deductions provided under the old tax regime.
Individuals can choose how to file ITR based on the old or the new tax regime.
Understanding the distinctions between the old and new tax systems is crucial before figuring out how to file ITR. Given below are some of the key differences between the two regimes:
- Under the old system, there was no tax up to ₹2.5 lakhs. However, under the new system, no tax is applicable till ₹3 lakhs income.
- In the old regime, yearly income between ₹5-₹10 lakhs was taxed at 20%. In the new tax system, income between ₹6-₹9 lakhs is taxed at 10%, and revenue of ₹7 lakhs gets a tax rebate as per the budget 2023.
- The last slab in the old system was charged at 30% on income over ₹10 lakhs. However, the new system has 15% for revenue between ₹9 and ₹12 lakhs. Another slab consists of tax at 20% for income between ₹12 to ₹15 lakhs and 30% for payments/income over ₹15 lakhs.
Should You File an ITR Even If Income Is Not Taxable?
An Income Tax Return is an official statement of your financial activities and income for every financial year. However, the government provides a basic exemption limit. If your taxable income is below this exemption, you don’t need to worry about how to file ITR.
However, even with no taxable income, you can choose to file an ITR because it has many advantages. It can make it easier to obtain a loan, travel abroad, and keep a record of your income.
Now that we have all the fundamentals on how to file ITR and its importance, let us look at the technical part of how to file ITR online and discuss it in detail.
Individuals can choose to file ITR under the old or new tax regime. The deductions and tax slabs under both regimes must be considered before filing ITR. The following documents are required to file ITR:
- Aadhar and PAN card
- Form 16
- Salary Slips
- Banks and post office interest certificates
- Tax-saving investment proofs
- Health insurance premium receipts
- Proof of capital gains
Even with no taxable income, individuals can choose to file ITR. Filing ITR makes it easier to obtain a loan, travel abroad and keep a record of your income
While discussing the process of how to file ITR, it is easiest to understand how to file ITR online. You need to initially present the necessary documents, fill up the form, and submit it. Once completed, it might require 30 days or more to complete the process. In the past, it took 26 days for ITR processing but as per financial year 2022-23 it will only take 16 days for the completion of ITR processing.
You can now file your ITR online through any third-party websites or the income tax e-filing portal. Once you know how to file ITR, it is not difficult to understand how to download filed ITR. Simply go to e-File on the income tax e-filing portal and then the Income Tax Returns tab. Select View Filed Returns.
You can choose an offline or online method to file it through the government portal. As mentioned, ITR is not only used to file taxes but it also acts as a proof of income. You need to know how to file ITR online and ensure you file before the due date to avoid a late fee for ITR.
What Are Some Common Misconceptions or Mistakes When Filing ITR?
It isn’t enough to be aware of just how to file ITR, you also need to know what errors you can run into. Common mistakes include inaccurate individual data, picking the wrong ITR form, inability to report all revenue sources, computation mistakes, ignoring eligible deductions and exemptions, and filing.
There are many misconceptions related to ITR. Below mentioned are some of the most common ITR misconceptions:
- I’m not generating profit, so I do not need to know how to file ITR.
- I can’t file an ITR separated from my permanent residential place.
- E-filing isn’t secure.
- Nothing will occur if I don’t file ITR, and I’m safe.
What Are the Consequences of Filing an ITR Incorrectly?
- If the income evaluated/re-evaluated surpasses the income announced by the assessee, or when a return has not been filed, and revenue surpasses the basic exemption limit, a penalty of 50% is levied on such reported income.
- If the person fails to maintain books of accounts or other documents, the penalty is ₹25,000.
- If there are false entries, the assessee must pay a penalty equivalent to the amount of fake or omitted entries.
- If undisclosed income is found during the computation, a penalty of 10% is charged.
What Documents Are Required for ITR Filing?
As previously mentioned, the documents required for ITR filing include:
- Pan card
- Aadhaar card
- Form 16
- Form-16A/ Form-16B/ Form- 16C
- Bank account details
- Bank statement/ Passbook
- Form 26AS and AIS/TIS
- Home Loan Statement
- Tax Saving Instruments
- Capital Gains Details
- Rental Income
- Foreign Income
- Dividend Income
Once you have all the above mandatory documents, you might be wondering how to file Income Tax Return online for salaried employee; then follow the step-by-step guide mentioned below to register for ITR filing:
Step 1
Go to the ‘e-Filing’ portal
Step 2
Once you land on the homepage, select the ‘Register Yourself’ option on the right.
Step 3
Choose the user type, ‘Individual’, then tap on continue.
Step 4
Fill in all the basic information and then click on continue.
Step 5
Once completed, you must fill in the mandatory information and tap on submit.
Step 6
Once the registration is done, you will get two OTPs on your smart device and email ID at the time of registration.
Step 7
Enter the right OTP to finish the registration process.
The ITR status represents the current stage of your filed ITR., then you can check if it is in process or accepted by the Income Tax Department. Once this is done, you may be wondering how to get ITR acknowledgement. This is simple. Under the e-File tab, click on Income Tax Returns and navigate to View Filed Returns. You can then download the ITR acknowledgement.
If you are an individual or belong to a Hindu Undivided Family or a firm, then there are small changes in the registration process. But overall, this is how to file ITR online.
You can now file your ITR online through any third-party website or the income tax e-filing portal. It is necessary to file ITR correctly and avoid common mistakes like inaccurate filing of individual data, picking the wrong ITR form, missing all revenue sources etc. The step-by-step procedure to file ITR online is:
- Go to the e-filing portal
- Select ‘register yourself’
- Select ‘individual’
- Fill the basic information
- Fill the OTP received on your email and mobile
Indian citizens have 7 different ITR forms to choose from as per the Income Tax Department. However, most often, individuals might find that one of these four forms are likely to be applicable:
ITR-1: ITR- 1, is the form used for salary income. If your annual salary is up to ₹50 lakhs, you generate rent from one house property, have some other sources of income and agricultural income up to ₹5,000, then this form is what you must use.
ITR-2: If you are ineligible to file returns using ITR-1, if your salary income is over ₹50 lakhs per annum, for instance, you can use this ITR form. ITR-2 is for individuals and HUFs who do not have gains from a business or a profession.
ITR-3: If you make income from business or profession, i.e., you have profit from a business source, then this is the ITR form you must use.
ITR-4 : ITR-4 is for those who attract presumptive income on their business. This form is applicable to all individuals, HUFs, Firms (other than LLP) who have a total income up to ₹50 lakhs and also have income from business or profession, income from house property and other sources.
Since most often, people are confused between ITR-1 and ITR-4, here are the differences between ITR-1 and ITR-4:
| ITR-1 | ITR-4 |
| ITR 1 is for salaried employees who acquire compensation, lease, or interest income. | ITR 4 applicability is only to individuals with income from salary, interest, lease, and income from business. |
| ITR 1 is only applicable to individuals.
|
ITR 4 is only applicable to HUFs and individuals.
|
| Sahaj is another name for ITR 1.
|
ITR 4 also goes by the name of Sugam.
|
| ITR 1 only covers 3 heads of income. | ITR 4 covers 4 heads of income. |
E-verification of ITR is essential because under the Income Tax Act 1961, if you do not verify on time, your return is not filed, and you will need to face the consequences of not filing ITR.
There are many different ways you can do e-verification of ITR. You can even e-verify your ITR without login to your account. Here’s how you can do that:
- EVC (Electronic Verification Code) created through a pre-validated bank account.
- EVC created through a pre-validated Demat account
- E-verify ITR through Aadhar wherein you will receive OTP on smart devices registered with Aadhar
- Net banking
- DSC or Digital Signature Certificate
- EVC through ATM
You are qualified for a tax refund if you have paid more income tax than tax liability. There is an excess of tax payments due to double tax deductions. Your final tax liability is less than the paid amount. Individuals can likewise track income tax refund on the official government website. Typically, the income tax refund time is between 20-45 days.
How to File ITR after Due Date?
Once you file ITR, you don’t need to worry about how to file ITR after due date. Individuals can file a belated return three months before the end of the assessment year or before the assessment completion. If you want to file a belated return, go to the Income Tax Department online portal and choose the appropriate ITR form applicable as per your sources of income.
How to File ITR Manually?
People with certain criteria can file ITR manually. Individuals need to prepare and deliver the form to the income tax office. ITR forms can be obtained by visiting the official site of the Income Tax Department. Offline ITR filing has its own advantages and disadvantages. Below mentioned are some of its pros and cons:
Pros
- The offline utility is built on a new technology named JSON for gathering data.
- The offline utility is available to download on Windows 7 and later versions.
- The offline utility provides guidance notes, FAQs, and provisions of the law so that users can easily do ITR filing.
Start an SIP with Bandhan Mutual Fund today.
Cons
- It is more time-consuming compared to online ITR filing.
- Online ITR filing is easily processed compared to offline ITR filing.
- Other ITR forms are unavailable in the offline utility apart from ITR1 and ITR4 forms.
To file ITR offline, understand the process of acquiring the income tax offline form.
You may be eligible for a tax refund if you have paid more income tax than tax liability. Typically, the income tax refund time is between 20-45 days. If the due date to file ITR has been missed, individuals can file a belated return three months before the end of the assessment year. ITR can be filed manually; manual filing may be more time-consuming however it provides guidance notes and FAQs to simplify the process.
- Knowing how to file ITR is a crucial financial obligation for people and organizations. Correct ITR filing guarantees compliance with the law. It offers various advantages, for example, staying from penalties, asserting refunds, creating financial credibility, and providing evidence of your financial activities.
- The guide mentioned above highlights all the details regarding how to file ITR, how to file income tax return online for salaried employees, how to e-verify your ITR, among other things.
- You can go through the guide and ensure you follow it till the end to avoid any hassle. Make sure you have all the vital documents required for ITR filing. To know more about how to file ITR in detail, you can go to the official Income Tax Department site to get the latest updates on ITR filing.
