HOW TO FILE INCOME TAX RETURN ONLINE

The total number of Indian taxpayers increased by over 80% in 9 years, and nearly 8.6 crore ITR or income tax returns were filed in the assessment year 2024-25. As our country moves from being a developing economy towards the status of an economic powerhouse, more and more citizens are likely to pay income tax.

The overall process of paying income tax has been simplified to a great extent, thanks to growing awareness and government initiatives, including the e-filing of income tax. That being said, there seems to be a lack of clarity on how to file an income tax return online.

Let's dig deep to define an ITR, find out who must file an income tax return, understand how to file an IT return online, and review the necessary documentation.

Key Takeaways?

• ITR is the official method of revealing income, expenses, investments and applicable taxes.
• Tax returns should be filed by all individuals/businesses subject to predefined exemption limits and criteria.
• E-filing is the smartest way of filing your ITR.
• One must choose from the ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7 forms.
• The choice of ITR forms is based on clearly articulated parameters.
• Need to attach additional documents.
• A 10-step guide for e-filing ITR and downloading it via the income tax portal.

 

What is ITR?

ITR expands to 'income tax return.' It is an authorized form, a mandatory filing for taxpayers, that reports one's income, expenses, investments and tax liabilities for the last financial year. The ITR form should be submitted to the Government of India's Income Tax Department.

Who Should File an ITR?

Filing ITR is compulsory for all individuals and businesses whose gross income crosses the basic exemption limit, which may vary depending on your choice between the old and new tax regimes. ITR filing is also necessary in the following circumstances:

• TDS/TCS amount exceeding INR 25 thousand.
• Professional receipts crossing INR 10 lakh.
• Business receipts exceeding INR 60 lakh.
• Foreign travel expenditure of over INR 2 lakh.
• Electricity consumption of INR 1 lakh or more.
• INR 1 crore+ deposits in current accounts.

 Benefits of Filing ITR Online?

• Quick, convenient and environmentally-friendly approach from the comfort of your home.
• Simplified, effortless, hassle-free and streamlined e-filing of income tax.
• Accelerates the accurate submission of tax returns.
• Brings enhanced confidentiality.
• It lets you avoid late-filing penalties.
• Provides official evidence of your income and net worth.
• Ensures prompt processing of refunds.
• Helps with obtaining credit cards, loans, and visa approvals.
• It lets you perform your moral and social duty.

 

 

Steps to e-file ITR on Income Tax Portal

Instructions on how to file an income tax return online step-by-step include the following steps:

Step 1: Visit the Government of India's e-filing portal and Log in using your PAN/Aadhaar or net banking credentials.

 

Step 2: Click 'e-File' on the top menu and choose 'Income Tax Returns.' And select 'File Income Tax Return' from the dropdown menu.

 

Step 3: and pick the correct 'Assessment Year' and Choose 'Online' as the 'Mode of Filing.'

 

Step 4: Select the right 'status applicable to you.'

 

Step 5: Choose the 'ITR Form to proceed.'

 

Step 6: Specify (select) 1/3 reasons for filing your returns.

 

Step 7: Carefully read/disclose your personal information, gross total income and deductions.

Step 8: Validate, confirm, verify, and submit your prefilled return summary.

 

DO NOT forget to E-Verify the return within 30 days by generating your EVC or 'Electronic Verification Code', using Aadhaar OTP, net banking, or sending a hard copy of ITR-V to the Income Tax Department's CPC in Bengaluru. Failing to do so could make your tax return invalid or null and void.

 

How to Download ITR Online?

The income tax department digitally sends your ITR-V or 'Income Tax Return-Verification' form via email. That said, you may also download a copy. One must keep PAN and ITR-V acknowledgement numbers ready before taking the following steps:

Step 1: Log in to the Government of India's e-filing portal.

Step 2: Click 'e-File' on the top menu.

Step 3: Choose 'Income Tax Returns.'

Step 4: Select 'View Filed Returns' and pick the 'Assessment Year.'

Step 5: Finally, click on 'Download Form' and save it.

 

Which ITR Form Should You File?

The CBDT, or 'Central Board of Direct Taxes', issues 7 ITR forms for specific categories, purposes and criteria. Below are their prominent applicability and non-applicability details:

ITR-1 [Sahaj]:

Resident individual with a total yearly income of up to INR 50 lakh, including incomes from a salary/pension, one house property, an agricultural domain (maximum INR 5 thousand), long-term capital gains (not exceeding INR 1.25 lakh) and other sources.

*Not Applicable:

• If your total income crosses the INR 50 lakh mark.
• The agricultural income is more than INR 5 thousand.
• You have income from more than one house property.
• Income from professions/businesses.
• If you are a company director, have accumulated taxable capital gains.
• If you have foreign income, or tax has been deducted under Section 194N of the Income Tax Act.

 

ITR-2:

An HUF, 'Hindu Undivided Family', or an individual with income from salary/pension, house properties, agricultural domain exceeding INR 5 thousand, capital gains, foreign or other sources. This form is also to be utilized by individual directors in companies, resident not ordinarily residents (RNOR), non-residents, those who own assets outside India and whose tax has been deducted under Section 194N of the Income Tax Act.

*Not Applicable:

• If the income covers proceeds from professions or businesses.

 

ITR-3:

An individual or a 'Hindu Undivided Family' with income from proprietary businesses or professions, involved in maintaining accounts and/or getting them audited, and earns income as a firm partner.

*Not Applicable:

• If the income from business/profession exceeds INR 50 lakh (excluding agriculture income).
• You earn income from foreign sources, speculative professions or businesses.
• If agricultural income is your primary source of income.

 

ITR-4 [Sugam]:

Resident individuals, HUFs and partnership firms (excluding LLPs) with total income not exceeding INR 50 lakh, including professional/business incomes, salaries, pensions, incomes from a one-house property, other sources and capital gains not crossing the INR 1.25 lakh mark.

*Not Applicable:

• If the total income is above INR 50 lakh.
• Earn income from 2 or more one-house properties.
• If you are a company director.
• If you own foreign assets or earn foreign income.
• If you are a signing authority for accounts outside India.

 

ITR-5:

Covers BOIs or 'Body of Individuals', AOPs or 'Association of Persons', AJPs or 'Artificial Juridical Persons', LLPs or 'Limited Liability Partnerships', business trust plus investment funds, estates of deceased and insolvents.

*Not Applicable:

• If you are an individual assessee or a company.
• HUF or a 'Hindu Undivided Family.'
• If you are required to use ITR-7 as per Section 139(4A, 4B, 4C, 4D, 4E or 4F).

 

ITR-6:

All companies registered under the Companies Act 2013 or the Companies Act 1956.

*Not Applicable:

• The companies that claim exemption under Section 11 of the Income Tax Act, 1961.
• Those who earn income from properties held for religious or charitable purposes.

 

ITR-7:

Persons and companies who need to furnish returns under Section 139 (4A, 4B, 4C or 4D), religious/charitable trusts, political parties, news agencies, colleges/universities and scientific research associations.

*Not Applicable:

• Individuals whose income is unconditionally exempt.

 

Other Documents Required to File ITR

• PAN card and Aadhaar details.
• PAN-linked bank account numbers.
• Bank statements/passbooks.
• Bank and post office interest certificates.
• Salary slips for salaried taxpayers.
• Stock trading statements.
• Proofs of capital gains.
• Tax-saving investment proofs.
• Details of foreign assets.
• Life/health insurance policy and donation receipts.
• Rental agreements/receipts.
• Other receipts for claiming exemptions/deductions.
• Form 16.

 

E-filing of income tax returns or ITRs can by all means be described as a pretty straightforward process that ensures timely compliance, precise factual reporting, faster processing, strengthens your financial stability and brings invaluable peace of mind.

While it is essential to declare your life or medical insurance policies when filing returns, picking the right one for your unique needs is equally important. And that's where QuickInsure comes in handy!

Reach out to the country's most admired insurance comparison portal, scan policies from all major service providers, study their features/benefits, evaluate pricing models, and close the purchase on your terms.

 

The FAQs:

1] Can I File the ITR without a CA?

Barring some complex scenarios, yes, you certainly can! The easy-to-use and self-explanatory e-filing portal requires no assistance from CAs or professional financial experts.

2] What if I Missed the ITR Filing Due Date?

When it comes to the financial year 2024-25, the last date for filing ITR is 31st July'25. Sometimes, the government authorities may extend the due date or deadline. However, if you missed the due date, you can file a belated return with late fees, penalties or interest by 31st December.

3] What if I Made Mistakes During ITR Filing?

It's human to make mistakes! As per Section 139(5), you may rectify errors or omissions, and file a revised 'updated return' by 31st December of the assessment year or before assessment completion, whichever comes earlier. At least 60% of the aggregate tax and interest will be payable if the updated return is filed after the expiry of 24 months from the end of the relevant assessment year.

4] How is Income Tax Calculated?

Income tax computation requires sufficient knowledge of taxation laws and all the latest Income Tax Act provisions/rules. Your income tax is calculated based on the information shared about income, expenses, investments, and deductions. It may include figures pertaining to your salary before deducting exemptions, taxable salary, interest/rental income, interest on home loan, other expenses, and tax-saving investments.

Estimating your taxes before filing is a wise step. However, unless absolutely sure, hiring a qualified tax consultant or relying upon a credible online tax calculator as a cost-effective alternative is advisable.

Note: The above information is purely indicative in nature and subject to change without any prior notice from the government authorities. One must refer to the Government of India's Income Tax Department portals to learn the most up-to-date developments before taking action.