Online Process to File ITR
Online or e-filing of ITR is now considered to be the easiest way of filing your ITR. However, still you can file your ITR offline. In this section, we will talk about the online process of filing an income tax return.
Step 1: Calculation of Income and Tax
The first step of filing your income tax return online is calculating your income. There are five heads of income –
- Income from Salary
- Income from Business and Profession
- Income from House Property
- Income from Capital gains
- Income from other sources
Now, you need to add the incomes you have under all these heads. Suppose, you are salaried and earn a gross yearly salary of Rs. 10 lakhs. You also have a property which you rent out and earn monthly Rs. 10000. So, your total income would be Rs. 10 lakhs plus (Rs. 10000*12) = Rs. 1120000. Now from this, you need to deduct the available exemptions and deductions which you are eligible for and if you are choosing the New income tax regime, then only the standard deduction will be deducted and the exemption available for rental income.
Similarly, if you are into business, then you can add the gross income for the year and other income if you have any to derive the total income and then adjust the deductions if applicable. You can find the different ways to calculate income tax.
Step 2: Tax Deducted at Source (TDS) Certificates and Form 26AS
The next step would be getting the TDS certificate (Form 16 or Form 16A) from your employer or the clients you work with who have deducted TDS or by any other means if TDS has been deducted in the financial year for which you are filing the return. You can verify whether the TDS is being deposited or not by visiting the TRACES website. From there you will get Form 26AS which is the TAX credit statement. You can check all the benefits of TDS deducted and deposited on this form. You can download the form as well from the website for ITR filing or your records. Form 26AS has all the information related to your taxes and it is as per your permanent account number (PAN) so, using this form you can verify and get a lot of details of your income tax.
Step 3: Choose the right Income Tax Form
Now the next step is to choose the right form that is required for your income tax filing.
- ITR 1 : If you are an individual who is a resident (except a non-ordinary resident) and has an income of up to Rs. 50 lakhs in the financial year from salaries, one house property and other sources including agricultural income of a maximum of Rs. 5000 then you need to file ITR 1 which is also known as SAHAJ.
- ITR 2 : If you are an individual or HUFs having different sources of income except for profit and gains from business or profession then you need to file ITR 2.
- ITR 3 : This form is for individuals and HUFs having profits and gains from business and profession
- ITR 4 or SUGAM : This form is for individuals (residents) and HUFs and also firms (except LLPs) who have an income of up to Rs. 50 lakhs in a year from businesses and professions falling under sections 44AD, 44ADA and 44AE.
- ITR 5 : This is for entities other than individuals, companies, and the person filing ITR 7 and HUFs.
- ITR 6 : Companies who are not claiming exemption under section 11 of the IT Act have to use ITR 6 for filing returns.
- ITR 7 : Companies and persons who are required to furnish details of income u/s 139 (4A), 139 (4B), 139(4C) or 139(4D) then they have to file ITR 7.
- ITR V : This form is for those who have filed any of the ITR forms except ITR 6, but have not e-verified the details.
So, these are the forms available which you have to choose from as per your income source and whether you are an individual, company, HUF or other entity.
Step 4 :
Once you have calculated your income, understood which form you have to choose for filing your return and also have Form 16/16A and Form 26AS, now you can visit the e-filing portal of the Income-tax Department that is - https://www.incometax.gov.in/iec/foportal/. Here you have to enter your PAN as the user ID and password and the Captcha code and then log in.
Step 5 :
Then you select the ‘e-file’ option from the tabs and then click on the ‘Income Tax Return’ tab. Now you have to select the assessment year, the ITR form which is right for your income, and the filing type that is an original return or revised return. Then you also need to select the mode of submission and for online ITR filing you need to choose ‘Prepare and Submit Online’ and click on continue.
Step 6 :
Now you have to enter the details of your income as you have already calculated in the ITR form you have selected. Always save a draft to save your details on the form as you have entered them. You can come back later and change if required or fill the forms on different days and times as per your convenience and by saving the draft your progress will be stored there for 30 days or until you change or file the return.
Step 7 :
Now you have to choose the verification option. You can choose either – ‘I would like to e-verify’ or ‘ I would like to e-verify later within 120 days from the date of filing’ or ‘ I don’t want to e-verify and would like to send ITR –V through the post to ‘Centralised Processing Centre, Income Tax Department, Bengaluru – 560500 within 120 days of filing the return. After you choose one of these three verification option, you need to preview the ITR form, and then submit it by clicking on the ‘Submit’ button.
Step 8 :
If you choose ‘I would like to e-verify the return’ then you will be now asked for EVC or OTP. You can generate the OTP using your AADHAAR, or you can visit a bank ATM for EVC generation and then you need to pre-validate your bank and Demat account.
Step 9 :
If you have chosen any of the other two verification options, then you can revisit the verification page later and e-verify or post ITR –V to CPC in Bengaluru.
So, this is how to file an income tax return online and this is the easiest way of filing an ITR return at present. However, since many people are not that accustomed to online transactions and online tax filing, for them there is an offline process too.
The first 3 steps of income tax filing via offline process are the same as an online process as tax calculation, TDS certificate and the ITR form selection will be the same whether you do it online or offline. So, here you can refer to the above steps (1 to 3) for the same.
- Step 1 : Calculation of Income and Tax – Same as above
- Step 2 : Tax Deducted at Source (TDS) Certificates and Form 26AS – Same as Above
- Step 3 : Choose the right Income Tax Form – Same as Above
- Step 4 : Download the ITR utility from Income Tax Portal
Now the offline process varies from this step where you need to download the ITR utility by visiting https://www.incometax.gov.in/iec/foportal/. Here you need to download the appropriate ITR utility from the ‘Downloads’ section – under the IT Return preparation software tab. This is software that will help you prepare the ITR offline. For this you need to have a laptop or computer with Macro-enabled MS Excel and the OS must be over and above Microsoft Windows 7 and you need to have .Net Framework version 3.5 or above. You can check the updated system requirement details here.
- Step 5 : Fill in your details in the Downloaded File
You can use the pre-filled XML after downloading it and importing it to the Utility software. Then you can change the details or enter new details of your income and other deductions and the amount which are required.
- Step 6 : Validate the Information Entered
The next step is to validate all the information that you have entered and then calculate the tax that is required to be paid.
- Step 7 : Convert the file to XML Format
Then you need to convert the document to XML format if it is not in XML format and save the same.
- Step 8 : Upload the XML file on the Income Tax Portal
Now you need again to log in to the Income tax portal -
https://www.incometax.gov.in/iec/foportal/ and then go to the e-filing section and then to the Income Tax return page. Then you need to choose the assessment year, ITR form number, and original or revised return and then for submission mode you need to select ‘Upload XML’.
- Step 9 :
Now once you have uploaded the XML, you will have to verify the same. For this, you can choose any of the following options –
- You can use Digital Signature Certificate (DSC)
- AADHAAR OTP
- EVC using either a pre-validated bank or Demat account details
- Then again like in online filing of ITR, you will receive three options – whether to e-verify now, or later or by sending the ITR-V to CPC.
- If you want to do it offline the entire process, then you can attach the XML file and upload the DSC or use the OTP received on the mobile number registered with AADHAAR.
- You can then send the ITR-V to CPC Bengaluru for verification.
- Step 10 :
Now after choosing the verification option, you can submit the ITR.
Filing your ITR is crucial for financial aspirations and maintaining a sound record of your income and also contributing to the growth of the nation and avoiding any penalties. Furthermore, you can enjoy multiple benefits by filing ITR every year. So, following the processes given above, you can easily file ITR even on your own from now onwards.