A Step-By-Step Guide to File ITR Online

Income Tax Return (ITR) is a self-declaration by the taxpayer about his/her income, assets, and tax paid. Though it is mandatory for some and voluntary for others, the benefits of filing income tax are many. Filing ITR can be a tedious process. However, the government has simplified the process of filing income tax returns over the years. Read to know the step-by-step process of how to file income tax return online and the documents required for e-filing.

Let’s learn how to file income tax return online!!

Why should you file ITR?

Filing income tax has several benefits, and the following are some of them.

• Acts as a proof of identity and income: Income tax returns act as proof of identity. You can use this document to apply for Aadhar or other government documents. Moreover, ITR acts as proof of income. This will be useful when you purchase assets such as land or property, as some sellers ask for proof of your income during such transactions.
• Claim deductions: As per the Income Tax Act 1961, a few expenses and investments qualify for deductions and help reduce your tax liability. These deductions can be claimed only when you file your ITR.
• Helps apply for a loan: When applying for a loan, one of the documents banks or financial institutions ask for is the income tax return to assess your capability to pay back the loan. Without an ITR getting a loan can be difficult.
• Helps get a visa: To go abroad and visit different countries, you will need a visa. You must show proof of your income or ITR for at least three years to apply for a visa. Without proof of income, getting a visa can be difficult.
• Carry forward losses: If you incur a loss in a particular year, you can carry it forward to subsequent years and pay fewer taxes on future profits. This is only possible if you file your ITR.
• Avoid penalties: By filing ITR, you can avoid penalties. As per the Income Tax Act 1961, if you earn more than Rs 2.5 lakhs, you will have to pay taxes on your income. If you fall under this category and don’t file your ITR, then you will be charged penalties. 
• Help India grow: Paying taxes is beneficial not only to you but also to the country. The government uses the tax you pay to provide citizens with medical facilities and build roads and other infrastructure projects in the country. By paying your taxes, you are helping India grow.

Documents required for e-filing income tax return

When filing income tax returns, you must submit various documents that act as proof of income, expense or investment. These documents will vary based on the source of income, such as salary, interest income, and dividend income. Following are the documents you will need for e-filing income tax returns.

PAN card

A permanent Account Number, or PAN, is a unique 10-digit alphanumeric code that the government issues to each taxpayer. It is one of the most important documents to open a bank account, file an ITR, and claim an income tax refund.

Aadhar card

It is a unique identity proof that contains the demographic and biometric details of an individual residing in India. The aadhar card is issued by UIDAI, a government agency and is a mandatory document for filing ITR. You will have to link your PAN and Aadhar together to verify your online ITR through OTP. 

Salary slips

If you are a salaried individual and are under a company’s payroll, you will have to keep your month-wise salary slips ready to file ITR.

Form 16

It is a document that proves that your employer has deducted tax or TDS (tax deducted at source) before paying you your salary. Form 16 contains details of salary, tax deducted and paid to the income tax department. As a salaried individual, it is important that you have your Form 16 to file ITR.

Form 16 A, 16 B, 16 C

If you earn interest income from banks, fixed deposits or recurring deposits, then you will need Form 16A as proof that the banks have deducted TDS before paying interest. Form 16B is for individuals who buy land and property. So, if you sell land, then the buyer must deduct TDS and give you Form 16B. If you receive a rent of more than Rs 50,000, then your tenants will issue Form 16C after deducting TDS.

Bank details

You will have to provide your bank details, including the account number and IFSC code of all your bank accounts, and select a primary account. The income tax department will use this to refund the additional tax you paid during the year.

Bank statement or passbook

You will have to upload your bank account statement for the authorities to check your interest income.

Investment proof

Certain investments qualify for tax deductions under the Income Tax Act 1961. Some of them are tax-saving mutual funds (ELSS), Public Provident Funds (PPF), and National Savings Certificates (NSC). Some expenses, such as insurance premiums, tuition fees, or donations, are also tax-free. All these will help reduce your tax liability, provided you submit proof of the same.

Form 26 AS

Form 26 AS can be downloaded from the income tax portal and will help claim a tax credit against the TDS deducted. It has details of tax deducted from your income against your PAN. You must ensure that the tax deducted against your PAN is reflected in this form. Else, you must get it rectified with the person who deducted it.

Interest income certificates

You must collect interest certificates from banks, post offices or other financial institutions. This will help disclose your actual income from interest, which will also act as a verification of the TDS deducted by the banks.

Capital gains statement

When you sell your shares, mutual funds, or property, the profit you make is called capital gains. These capital gains have to be disclosed to the income tax authorities. Capital gains statements can be downloaded from your demat account provider’s portal for shares and mutual funds. In case of capital gains for property, sale deeds will act as proof.

Details of unlisted shares

If you hold shares of unlisted companies, then you will need to disclose them to the income tax authorities.

Home loan statement

Interest and principal amount on a home loan is tax deductible under Sections 80C and 24. To claim this deduction, you must provide a home loan statement given by the loan provider.

Advance tax challan

You must pay advance tax if your tax liability is more than Rs 10,000. If you are a salaried individual, then the TDS your employer, deducts is the advance tax you pay. But if you pay advance tax separately, the tax challan must be provided.

Rental income

If you earn rental income, rent receipts must be provided to the income tax authorities. Also, you must provide rent receipts to claim HRA if you pay rent.

Dividend income

You will need to disclose if you earn dividend income from your shares or mutual funds.

Foreign Income

If you are deployed to a foreign country by your employer and earn income there, you need to disclose it to the income tax authorities.

How to File Income Tax Return Online?

Step-by-step process to file ITR online:

• First, visit the income tax portal’s website, register if you are a first-time user, or log in if you already have an account.
• After logging in, click on the ‘e-file’ tab and select ‘file income tax return’ under the ‘income tax returns option.
• Then, select the assessment year to file the income tax return. The assessment year is always one year above the financial year. For income earned from 1^st April 2021 to 31^st March 2022, you are liable to pay a tax in 2022-2023. So, you will select 2022-2023 to file tax for last year.
• After selecting the assessment year, click online to file your tax online.
• Next, select the status through which you will be filing tax. Select ‘individual’ if you are a salaried employee.
• Then, you must choose the ITR form from the drop-down through which you will be filing tax. ITR 1 is for individuals earning a salary.
• The portal will ask you the purpose of filing an income tax return. Choose from the option applicable to you.
• Next, provide the details of your bank account. If you have already provided it, just verify it and select the account you wish to get a refund.
• The portal will redirect you to a new page with pre-filled information based on your PAN. Check all the details correctly. You can edit the form, so enter the income and deductions not mentioned in the form already. In the income section, review your income, and enter details of other income. Verify and add deductions in the total deductions section you wish to claim.
• Then confirm the tax paid, which includes tax paid the previous year, and TDS deducted. The portal will display your tax liability, which you need to confirm.
• Next, pay your taxes (if any), and re-check your returns by seeing a preview.
• Then proceed to verification to e-verify your returns and enter the OTP (one-time password) you will receive on your mobile.
• Once you verify, you will receive an acknowledgement number and save it for future reference. You will also receive confirmation through message and e-mail.

Frequently Asked Questions

1. What is the minimum amount needed to file ITR?

   If your income exceeds Rs 2.5 lakhs per annum, then it is mandatory for you to file your income tax return. The limit is Rs 3 lakhs for senior citizens.

2. Can I file ITR without CA?

   You can file your ITR without the help of a CA. As per the Income Tax Act 1961, there is no compulsion to hire a CA to file income tax returns. But a CA would have better knowledge about the current tax laws, can help you reduce your tax liability, and also help you in avoiding penalties.

3. How do I file my 2022-23 tax return?

   If you want to file your ITR for the assessment year 2022-2023, then you are way behind the due date. You can still file it by paying a late penalty. However, if you want to file your ITR for the financial year 2022-2023, you will have to wait until the end of March 2023.

4. Can I file ITR without an income?

   If you earn no income in a financial year, you can skip filing your ITR. However, you can also file your ITR with zero income.

5. Who is not eligible for ITR?

   Non-resident Indians (NRI) and Resident Not Ordinarily Resident (RNOR) cannot file income tax in India.

6. What is the penalty for late filing of ITR?

   The income tax authorities levy a penalty of Rs 5,000 for late filing.

7. Who is required to file ITR compulsory?

   Any individual, irrespective of age, with an income above Rs 2.5 lakhs should file ITR.

8. Who is eligible for e-filing?

   Individuals and HUFs can file income tax online.

9. Is it necessary to file ITR If income is below Rs 5 lakhs?

   If you are an individual below 60 years, your threshold limit is Rs 2.5 lakhs. Hence it is mandatory for you to file ITR. If you are a senior citizen, the limit is Rs 3 lakhs, and you have to file ITR. For super senior citizens, the limit is Rs 5 lakhs, it is better to file an income tax return even in this case.