How to E-File for Income Tax Return ?

How to E-File for Income Tax Return?

What do we mean by E Filing?

Electronic filing or e-filing as we often call it is a medium via which income tax returns can be submitted online. There are two ways provided, by which taxpayers may file their income tax returns. The old way by which it can be filed involves the individual going to the Income Tax Department’s office to personally file the returns. The modern age way involves e-filing through the internet. This method has become quite prevalent since it is convenient, can be done even without the prints of documents, and is free of cost.

Who are required to file Income Tax Returns?

Any company irrespective of its domain - public, private, foreign or domestic is entitled to file an Income Tax Return. Moreover, any firm whether- Limited Liability Partnerships (LLP) or Unlimited Liability Partnerships is also required to do the same. Return of Income is mandatory and needs to be filed in the case of a person whose taxable income exceeds Rs. 2, 50,000/- in a particular financial year. Section 139 of the Income Tax Act 1961 manages the variety of returns to be filed against the person or any organization for that matter, who has not filed tax returns before the expiry of the prescribed deadline. As per the rules, for senior citizens (above 60) the basic exemption limit is Rs 3 lakh and Rs 5 lakh for very senior citizens (above 80). Furthermore, the income earned apart from the salary l such as house property and more, the return of income is necessary. One can claim income tax refund from the department. Similarly, earnings from foreign assets or any desire to apply for visa or loan applications require the filing of the return. Any company or firm Company or a firm, distinct to profit or loss has to file income tax returns.

What is the difference between AY and FY?

Financial Year or FY is referred to the interval amid 1st of April to 31st of March. Assessment Year or AY, on the other hand, refers to the subsequent year, when the income will be accountable for tax. For instance, the financial year from 1 October 2015 to 31 August 2016, will be known as FY 2015-16. The assessment year anticipated for income earned during this period would initiate subsequent to the end of the financial year i.e., –1 April 2016 until 31 March 2017.

What are the types of income tax return?

There are various income tax return types, namely ITR 1 (SAHAJ), ITR 4, ITR 5, ITR 6, and ITR 7.

1. Individuals, who are salaried employees having, one house property and other sources of interest and so on, choose ITR 1 (SAHAJ), for filing their tax return.
2. Income Tax Form ITR 4 is used by proprietorship firms. This type is suitable for individuals and Hindu Undivided Families earning from a proprietary business.
3. However, Income Tax Form ITR 5 is used by most partnership firms.
4. Companies such as private limited company, public limited company and other for-profit companies choose Income Tax Form ITR 6.
5. Political parties, news agencies, universities, and entities in receipt of income from property held in trust for charitable or religious purposes resort to Income Tax Form ITR 7.
6. When filing income tax return several documents are needed. As per Income Tax Department, salaried employees require Form No.16 to be issued by the tax payer’s employer summarizing their income from salary and tax deducted at source on. This legal obligation can also benefit the taxpayer while visa and immigration processing.
7. When filing income tax return several documents are needed. As per Income Tax Department, salaried employees require Form No.16 to be issued by the tax payer’s employer summarizing their income from salary and tax deducted at source.
8. Additionally, there is Form No 16A which is issued by all the payers who have deducted tax during their transaction with the taxpayer. It also demands account statements of all the accounts operated through the year.

Documents required for filing of Income Tax Return

1. Details about a recently purchased property or existing property on rent along with details about the rent received and receipts of municipal taxes paid during the year need to be disclosed.
2. Any documents related to sale & purchase of shares in the existing year is essential for calculating capital gains.
3. In the case of advance tax payments, tax challans need to be revealed.
4. Documents involving tax implications should also be present for quantifying taxes.

Steps to e-filing

1. In order to e-file your income tax return, one has to register on the Income Tax Department’s online tax filing site. Thereafter, the permanent account number (PAN), name and date of birth has to be provided. Then one has to select a password. The PAN can be used as the user ID.
2. In the second step, an individual may either visit the download section or select the essential form. Thereafter, the individual may save it on the desktop. After that, all the necessary details are filled offline. The form is then uploaded back to the site. However, one may decide to fill the form online by clicking the e-file option.
3. The third step is to choose the required form, i.e., ITR-1, ITR-2, ITR 2A ,ITR 3, 4 and 4S
4. The documents should be kept ready, such as insurance and home loans, PAN, TDS certificates and more. For more details visit the official website. One may validate the tax return with Form 26AS and check the tax liability.
5. After filling up the form offline, and selection of ‘generate XML', the individual has to visit the website again and click on the 'upload XML' button. In order to upload the XML file saved on the desktop, the first one has to log in and then click on submit.
6. After the submission of ITR form, an acknowledgment number is produced. Under any circumstances, if the return is submitted using a digital signature, it is crucial to saving this number. However, when the return is submitted in the absence of a digital signature, an ITR-V is generated, which in turn is forwarded to the individual’s registered email ID. ITR V has to be verified in order to successfully complete the tax filing process.

In conclusion “How to E-file for Income Tax Return?” provides crucial information. This year the last date for e-filing income-tax returns has been extended to August 5.Though the initial deadline for filing income tax returns for was July 31, 2017, the authorities decided to extend it.