Along with paying income tax, it is also important to file income tax returns or ITR annually. The Indian income tax department has been effortlessly trying to improve the process of filing an income tax return.
Every responsible citizen of the country needs to learn what an income tax return is, how to file an income tax return, and how to save tax.
What is Income Tax Return?
An Income tax return or ITR is a form that every taxpayer must submit to the income tax department of India. This form carries the information regarding the income and tax payable of an individual. This information should be valid for the current budget year, i.e., from the 1st of April of the present year to the 31st of March the next year.
The income to be filled in the form should include salary, profits in business, property sales, capital gains, and more. Moreover, if you have paid more than the actual amount of tax payable, the excess money will be refunded to you by the department of income tax.
Let us read more about how to file an income tax return with a detailed step-by-step guide.
How to File Income Tax Return?
The income tax return forms can be filled in through both offline and online mediums. However, the convenient option of filing your income tax return sitting in the comfort of your home can save you a lot of your time and energy.
The income tax department has brought an e-filing software that includes all the ITR forms for the current budget year. To learn how to file income tax return, follow these 8 simple steps.
1. Calculate your Income and Tax
The taxpayer is supposed to calculate their annual income according to the income tax laws applicable to them. This will include their income from all sources such as salary, interest, and more.
2. TDS Certificate and Form 26AS
Taxpayers should summarize all the TDS certificates they received within the budget year for all 4 quarters. Moreover, Form 26AS is helpful to the taxpayer to summarize the TDS as well as tax paid during the financial year.
3. Pick the Right Income Tax Form
To file the income tax return, the individual must determine the appropriate income tax or ITR form. They can proceed to complete the income tax return after determining the income tax form.
There are two filing options: online and offline. Only ITR 1 and ITR 4 forms are accessible through the taxpayer's login in the online mode. However, all forms of income tax are available in offline mode.
4. Download ITR Utility from the income tax portal
Download the excel or java utility under the 'download' section on the top menu bar on the income tax portal, I.e., www.incometax.gov.in and click on "IT Return Preparation Software."
5. Fill in the Necessary Details and Validate the Information Entered
Once you have downloaded the offline ITR utility, fill in the necessary details of your income. Further, check out the tax payable and refund receivable as per the calculations of the ITR utility.
After entering all the details, you will see a few buttons on the right-hand side of the form. Out of them, click on the 'validate' button to ensure that all the information is filled in correctly.
6. Convert Your File to XML Format
In the next step, once you are done validating your information, click on the 'Generate XML' button on the right-hand side of the file. This will convert your file into the XML file format.
7. Upload the File on the Income Tax Portal
In the last step, log in to the income tax e-filing portal, click on the 'e-file' button, and select the 'Income Tax Return' option.
Enter the crucial details like PAN, ITR form number, assessment year, and the submission mode. Do not forget to choose the option 'Upload XML' from the drop-down corresponding to the field name 'Submission Mode.'
Choose one of the available verification modes—Aadhaar OTP, Electronic Verification Code (EVC), or others.
Since the ITR filing process was manual for many years, many found it complicated and tiresome. However, now that the income tax department of India has taken the filing process online, the burden has significantly lessened.
It allows you to maintain the records of all your financial transactions. So, if you are applying for a visa or loan in the future, it will be easy to provide your tax return details. In order to avoid the last moment hassle and penalties, you can also file your ITR a couple of months before the deadline.
