According to the data put forth by India’s Income Tax Department, the total number of e-Filings for fiscal year 2019-20 was Rs. 6.68 Crore. The data also conveyed that the total number of registered income tax e-Filing has increased by 15% to 8.45 Crore, from the last fiscal year. From this data, it is evident that the country’s tax base has expanded considerably in the post-demonetisation period.
For individuals who are filing their tax returns for the first time, the process might seem complicated. However, with the introduction of online e-filing of returns, the entire procedure has been simplified to quite an extent.
Following is a comprehensive guide about every aspect of online tax filing that individuals should know about before they begin.
How to file tax return online?
There are two methods using which one can file their income tax online. These are –
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Through Digital Signature Certificate or DSC, with the assistance of a chartered accountant.
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Through ITR V, which is generated online and then printed. After this form is signed, it is sent to Bengaluru’s Central Processing Centre, within a span of 120 days from the e-Filing income tax.
Apart from these two methods, individuals can also choose to file their returns through an e-return intermediary or ERI. This process can be carried out with or without a Digital Signature Certificate.
The ITR V generated after filing income tax successfully is an extremely important document for home loan approval and other advances.
Who can file their ITR online?
There are some criteria that an individual must comply with for income tax e-Filing. These are –
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If the total income for the respective financial year exceeds the tax exemption limits.
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If individuals possess assets overseas and hold the signing authority for a foreign account.
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If one is required to provide returns as mandated by Section 139(4B).
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If one is required to supply an audit report as mentioned under Sections 10 (23C)(IV), (V), (VI), etc.
Apart from these criteria mentioned above, all Indian companies with operations within the country, claiming tax relief under Section 90, 90(A), 91 can choose income tax e-Filing.
Documents required to e-File ITR –
If you are eligible to e-file your tax returns, you will need to keep the following necessary documents handy –
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Salary slips.
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PAN card.
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Documents as proof of tax-saving investments.
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Form 16A, 16B, 16C.
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Bank statements.
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Form 26AS.
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TDS certificate.
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Savings and other deposit account interest certificate.
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Various loan and insurance particulars.
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Other income proofs.
Choosing the right form for income tax e-Filing –
Since there are several forms for e-Filing tax returns, individuals must be informed about each of them to choose the right one. Following is the list of ITR forms and who can use them to file their returns –
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ITR 1 – For individuals with income less than Rs. 50 Lakh, generated from salary, house property or pension.
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ITR 2 – Individuals who are not eligible for ITR 1 and do not generate income from business or profession.
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ITR 3 – This form is for HUFs and individuals who generate income from their business or profession.
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ITR 4 – This form is for HUFs, individuals or partnership firms who generate income from pension or salary, or from house property.
Apart from these, there are ITRs 5, 6 and 7 which individuals must look through to check if they are the requisite forms for them.
It is crucial for individuals to choose the right form during e-Filing income tax. By filling the respective forms and submitting the required documents, individuals can file their returns through the official website of the IT department.
After filing the return, individuals will be supplied with ITR V, which is one of the most important documents when it comes to availing advances like home loans from financial institutions in India.
With this form and a few other documents for home loans, the application for this loan can become simpler.
Therefore, e-Filing is a necessity that must be completed before 31st July. Also, it is crucial to make full tax payments according to your income tax slab before you file your returns, to avoid penalisation.
