Step By Step Guide to File an Income Tax Return Online

File an Income Tax Return Online

The income tax return is a form that taxpayers need to declare their expenses, investments, income, taxes, and tax deductions. It has been mandatory for taxpayers in varied situations to file an income tax return at the end of every financial year. While the primary purpose of filing an income tax return is reporting annual income, there are other reasons for doing it, too. For someone who wants to carry forward his losses, claim tax deductions, or claim a refund on income tax, too, the income tax return is necessary. 

The income tax department has now enabled an official portal to file an income tax return online. Here we have enlisted the steps that need to be followed to do the same. However, let us first understand a few things about income tax return online. 

Why is an Income Tax Return Important to File? 

Besides certain conditions for exemption, it is mandatory for all people exceeding a particular limit to file an income tax return for every financial year. However, you are exempted from the ITR file online if you have consumed electricity worth more than a lakh rupees, deposited a crore or more in one or multiple current accounts, or spent more than 2 lakh rupees on international travel. If you have fulfilled one of these conditions but are someone who has an asset outside of India, it is usually advisable to file your income tax return anyway for the following reasons: 

1. ITR file online acts as a valid income proof
2. It can be used to apply for loans in the future 
3. It would be best if you had an ITR even while applying for credit cards

VISA applications require ITR as well

For the reasons stated above, it is hence always a better idea to file your income tax return online within the specified deadline. 

Let's now go through the steps that need to be followed to file an income tax return online: 

Step 1: Calculating Total Income and Tax 

The taxpayers' first step to filing an income tax return online is to calculate their total income considering all applicable income tax law provisions. The calculation should be based on all incomes taken into account, including freelancing, salary, and even interest on income. There are also certain deductions that taxpayers can claim in their ITR online, like tax-saving investments as per section 80C. Taxpayers should also mention all the taxes they have paid in advance, like TCS, TDS, and more. 

Step 2: Form 26AS and TDS Certificate

TDS certificates can prove helpful to taxpayers in calculating the total TDS amount in a financial year. Form 26AS can also help a taxpayer with a TDS summary to calculate the tax paid by him in a financial year. 

Step 3: Income Tax Form

Before a taxpayer proceeds further to file an income tax return in India, they must decide what ITR form would be suitable for him. One has the option to file the return offline or online. The choice is between ITR 4 and ITR 1 for the taxpayers to ITR file online. Besides these two, all forms can be utilized to file an income tax return offline. 

Step 4: ITR Utility

Now is the time to download the ITR utility from the official portal online. Go to the official site for the income tax department and click on downloads on the home page. Now, choose the financial year and move further to download the utility software that you prefer. Excel and Java utility software are now unavailable effective AY 2020-21. 

Step 5: Filling Details in the Downloaded Form

After downloading your utility form, enter your income details to calculate the total receivables and tax payables for the financial year. One can also fill their income tax challan in the utility form. 

Step 6: Validating the Entered Information

To ensure you have entered all information, find the buttons on the right side of your downloaded form. Click on validate, and you will have your answer. 

Step 7: XML Conversion

You have to now convert this file into an XML file by clicking the generate XML button on the right side.

Step 8: Uploading XML File

Log in to a portal with your credentials and click on the e-file tab in the menu bar. Select the income tax return from the drop-down menu and enter all your important details like PAN card number, ITR form number, submission mode, and assessment year. Moving on, find the submission mode option in the corresponding field called submission mode and select the upload XML file button there. Attach your XML file now and click submit. 

Choose between the available verification modes within electronic verification, ITR-V signed copy, or Aadhar OTP. 

How Can I Get an Online Copy of My Income Tax Return? 

• Log in official website with your credentials
• Click on view forms/returns
• Select the income tax returns option and choose the relevant financial year.

You will now see a window with all the filed ITRs

Click on the ITR-V file you wish to download, and it will be downloaded to your system.

When to Pay Your Taxes? 

You need to pay your taxes before filing an income tax return online. In case you are a salaried individual, your employer will already take care of most of your tax liability by deducting it from your salary. If you still need to, you have to pay it before the 31st of March every year. After you pay your taxes, it is advisable to file your ITR before the given due date, or you can face a penalty of 5000 rupees for not filing an ITR within the specified deadline. 

Conclusion

Filing an income tax return can be a difficult task for many especially large businesses. You can share the responsibility with Lawgical India, where a team of financial experts takes care of the process for you. Contact us to learn more.