Income tax is a type of direct tax where those earning a particular sum of money as income pays a part of this to the government as per the applicable income tax slab rate. Income tax is directly proportional to the earning capacity of an individual. From an economics perspective, income tax is a progressive tax i.e. as income increases, the amount of income tax payable also increases. The records related to various aspects of income and applicable tax are provided in the Income Tax Return.
What is Income Tax Return ?
Income Tax Return or ITR is a document that provides data regarding all income sources and income tax that is applicable to an assessee. Income tax returns need to be filed by individuals, organisations and firms to show the income earned by them in a particular financial year and the tax paid till date and/or payable on the income earned during the fiscal. This income tax return is submitted with the Department of Income Tax. Presently, income tax can be filed using one of the following forms:
Eligibility for Income Tax
It has been made mandatory by the Government of India to file the income tax returns within a specified date. The need to file income tax returns arises because of the following reasons:
- If the total annual income of a person below 60 years of age is ₹ 2,50,000 or for a person above 60 years but below 80 years is ₹ 3,00,000 and for a person above 80 years is ₹ 5,00,000 and above.
- If any Indian resident makes income abroad as well.
- If it is a firm or company where financial year’s profit or loss is not taken into consideration.
- If the taxpayer applies for a visa.
- If an Indian resident has signing authority overseas.
Documents Required for E-Filing of Income Tax
Filing of income tax can be easily done online and the process is called e-filing income tax. For e-filing of income tax, a taxpayer must keep some important documents ready with him/her. These documents are as follows:
- Form 16
- Statement of bank in which the taxpayer holds a valid savings/current account
- Photocopy of the last year’s income tax returns filed by him
Last Date to file your Income Tax Returns
For the financial year (2018-19), the last date to file your income tax returns is 31st July. Filing you income tax return is not as difficult as it may sound. To ensure you don’t miss this date, the income tax department offers you the facility to file your returns online by preparing and submitting ITR1 online.
How to register yourself for Income Tax Returns Filing?
The following steps will help you register on the Income Tax Department website:
1) Visit Income Tax E-filing Portal : Link
2) Select the appropriate ‘User type’.
3) Enter your basic details such as PAN, Name, Residential Status and Date of Birth.
Note: After registration, the PAN of the taxpayer becomes User ID for logging in the Income Tax E-filing Login Portal.
- Fill in the registration form with details such as password, contact numbers, addresses, etc.
After you have duly filled out the registration form, submit it. Once the registration form is submitted, you will receive a 6-digit One Time Password (OTP) on your mobile number and email ID.
- For registration verification, enter the OTP sent to your email ID and mobile number.
Note: In case of non-residents, the OTP is sent only to their registered email address.
Also, the OTP expires after 24 hours from the time you had received it. Hence, if you fail to complete the registration process within 24 hours, the entire registration process must be followed again.
How to access your account at Income Tax E-filing Login Portal?
After registering yourself on the Income Tax E-filing Portal, you will be able to log in to your account. For Income Tax E-filing Login, follow these steps:
- Visit the Income Tax E-filing Login Webpage.
- Enter the required details such as User Id, Password and Captcha Code.
Once you submit the details, they will be checked with the data available. If the information provided is correct, you will successfully log in the account.
How to access your account at Income Tax E-filing Login Portal?
After registering yourself on the Income Tax E-filing Portal, you will be able to log in to your account. For Income Tax E-filing Login, follow these steps:
- Visit the Income Tax E-filing Login Webpage.
- Enter the required details such as User Id, Password and Captcha Code.
Once you submit the details, they will be checked with the data available. If the information provided is correct, you will successfully log in the account.
Steps for E-filing your Income Tax Return
In order to file income tax return for the current year, these steps are to be followed:
1) Visit the Income Tax Department website.
2) Register in case you are a new user or login if you already have an account.
3) In the “e-File” drop down menu, select “Income Tax Return” option.
4) Select the assessment year, ITR form type and submission mode
5) Select the authentication type from Aadhaar OTP, EVC or send ITR V through post and click on continue
6) Read the instructions carefully before starting the e-filing process
7) Fill Part A: General Information part of the form
8) Now fill details and compute the income tax
9) You will be able to see Tax Details. Fill the details not entered previously
10) In “Taxes Paid and Verification” section, your tax details are mentioned.
11) In “80G” section of the form, mention all deductions under this section.
12) Select the “Preview and Submit” option to preview and to run automated check of any error that might have occurred in your e-filing
13) Now “submit” your form and verify using one of the authentication types
14) An acknowledgement will be sent to the registered email address by the Income Tax Department
Advantages of E-filing of Income Tax
E-Filing of income tax returns has been made compulsory by the Government of India. The process is much easier compared to the earlier paper filing process. The advantages of e-filing of income tax are as follows:
- The last date for filing income tax returns is July 31st every year. If the user files them one or two month prior to this date, they can complete the task more swiftly with less congestion as servers tend to get overloaded when final date approaches.
- Online filing of tax returns helps the taxpayer to keep a record of all the financial transactions with the Income Tax Department in a more effective manner.
- This record can act handy if the taxpayer wishes to carry out a business relation with any other organisation supporting such records in the future.
- If the taxpayer is unable to file income tax returns for the previous year, he is liable to pay penal interest for every extra day till the date when payment is paid. So, advance filing of income tax return saves you from the additional fine.