Your in-depth Guide to Income Tax Returns and E-filing your ITR

Income tax returns (ITR) filing is an intimidating task for just about everyone. Because you know that the slightest mistake at your end could land you in trouble with the Income Tax department – scary thing, right!! Along with that, there’s this ocean of data that needs to be filled in, coupled with cumbersome terminologies.

Out of the two methods available to people today, for filing their Income Tax Returns, filing returns via the internet (online) has been on the rise, lately.

The pretty obvious reason being the conventional offline route wherein you have to be physically present at the office of Income Tax department and go through all the processes manually, is an extremely tedious process. Moreover, offline filing also involves a lot of paperwork and going through layers of bureaucracy; hence, more and more people are inclining towards the online method.

And then there are those, albeit a very small chunk, who like to have control over every aspect of their finances and do the return filing process themselves. They understand the need to know where their money is going and prefer to manage every aspect of it themselves. But even these people are not know-it-alls and sometimes require external help.

The technical jargons and multitude of information required can get overwhelming. Which is why most people take the help of professionals [like chartered accountants] to help them with the process.

So, in order to help such people and anyone else who’s looking for a guide to help them through the e-filing process, the following step-by-step process will come handy. (Anyone who doesn’t have a lot of time to go through the entire post, this small piece should also be helpful.)

The different types of ITR Forms

The next important thing that comes is having an in-depth knowledge of the various ITR forms.

Why this is important is because you need to know where you fall in terms of the earnings you make and hence, which ITR form will be applicable for you. After all, you don’t want the Income Tax department to be holding your neck, for filing your returns with the incorrect form.

Types of ITR Forms

ITR-1

ITR-1 or SAHAJ, as it’s also called, is applicable for an individual with total income from

• Salary or Pension
• One house property (except cases where loss is brought forward from previous years)
• Other sources (except winnings from lotteries or from horse races)

ITR-1 cannot be used by individuals

• In case you’ve foreign assets
• In case your total income exceeds 50 lakhs
• In case you’ve taxable capital gains
• In case you’ve agricultural income of more than Rs. 5,000
• In case you’ve income from more than one house property or business or profession

ITR-2

ITR-2 is applicable for any individual or a Hindu Undivided Family (HUF) whose income is not from a proprietary business or profession. This is the simplest and most direct definition of ITR 2.

ITR-3

ITR-3 is applicable for any individual or HUF who have income from proprietary business or profession. It’s also applicable in the case of an individual or HUF who is a partner in a firm deriving its income via interest, salary, bonus, commission or any other kind of remuneration from the firm.

ITR-4

ITR-4 or SUGAM, as it’s also called, is applicable to individuals or HUFs with income from

• Presumptive income scheme as per the provisions of section 44AD, 44ADA and 44AE
• Salary or Pension
• One house property (except cases where loss is brought forward from previous years)
• Other sources (except winnings from lotteries or from horse races)

ITR-4 will not be applicable in the following scenarios, where an individual

• Has incomes from taxable capital gains
• Has a yearly taxable income under section 115BBDA
• Has unexplained credit or taxable investment at 60% under section 115BE
• Is a resident and ordinarily resident and has assets located outside India or signing authority in any account located outside India
• Claims relief under section 90, 90A and/or 91
• Also has some speculative or other income sources
• Also has agricultural income exceeding Rs. 5000
• Also has income from agency business or brokerage or any kind of commission

ITR-5

ITR-5 can be used by a firm, Limited Liability Partnership (LLP), Association of Persons (AOP), Body of Individuals (BOP), artificial jurisdiction persons, local authority, cooperative society or registered society, as per section 2(31(vii)) and 160(1(iii)(iv)).

ITR-5 is not applicable in the case of trusts, political parties, institutions, colleges or entities (or any person) who are required to file the return of income under any of the sections 139 – 4A, 4B, 4C, 4D and 4F.

ITR-6

Available for all the companies not claiming deductions under section 11 (charitable or religious purposes).

ITR-7

ITR 7 is available to all those people and entities who cannot apply for returns with ITR 5 – 139 – 4A, 4B, 4C, 4D and 4F.

The E-filing Process

Now that you’ve gone through the advantages of filing your ITR online and the different ITR forms, it’s finally time to take a look at what exactly goes behind when you’re trying to e-file your ITR. Following is our step-by-step guide to help you with the cause.

• Visit the e-filing website – https://www.incometaxindiaefiling.gov.in/
• For a first time user, you’ll have to click on the ‘New Registration’ tab and register yourself by creating your profile and password. You’ll need an active email id and a mobile number and see to it that you provide them correctly. (For someone already registered, click on the ‘Registered user’ tab.)
• Next, click on the login tab and fill in your required details – User ID (your pan), password and captcha code. Click on login at the bottom to sign in.
• Next, you’ll be able to see your dashboard. Click on the ‘e-file’ tab and select ‘Income Tax Return’ option.
• Next, select the assessment year – 2018-19, the relevant form – ITR-1 or ITR-4 and the Submission Mode – prepare and submit online. Select the appropriate option and press continue.
• Next, you’ll be redirected to the filing page where you’d be asked to populate your information under different tabs – General Information, Income Details, Tax Details, Taxes Paid And Verification and 80G. Ensure that the tax payable shown in the online form is equal to your own calculations.
• After feeding all the information, you need to click on ‘Preview and Submit’ button which will allow you to have a final glance at your form before submitting.
• Finally, upon clicking the ‘Submit’ button, your ITR will get uploaded and you’ll be asked to verify your return using one of the available options.

You’ll receive an acknowledgement/ITR V, on your registered email, once your return is successfully uploaded. You’ll also be able to view this acknowledgement on the e-filing website from where you can download it. You’ll be intimated about via email and SMS, as and when your ITR gets processed.

Benefits of Filing your ITR Online

Now, before we go any deep into the technicalities, let’s first have a look at the whole host of benefits that filing your ITR online can give you. Because let’s face it, even though the benefits of online processes are pretty obvious, not everyone is aware of them. So, to give people a sense of what all they could expect when they e-file their ITR, the following pointers will come handy.

There are more than just a handful of benefits attached to e-filing of ITR.

1. Convenience – No visitations. No time constraint. No clamouring in queues. E-filing gives you the convenience of doing the process at the comfort of your home, 24/7.
2. Status tracking & expedited process – E-filing means that you can track your application status, through various stages, and receive instant updates on the same. No more depending on postal services or haggling for information from the IT department. E-filing also hastens your filing, on the back of an entirely automated process.
3. Accuracy and zeroing of errors – Any manual process invites mistakes, given that we humans are prone to errors. An online process eliminates the scope of making errors on the back of inbuilt data validation and tax calculation processes.
4. Confidentiality – It goes without saying that online processes are almost always confidential. Unless there’s a third party involved who’s using your data for unscrupulous purposes. But because we’re talking about the Indian government here, that’s one worry you don’t have to dwell on. It’s 100% secure with built-in encryption.
5. Accessibility to past data & auto-population of records – filing your returns online means that whenever you’ve to produce your returns somewhere or want to have a look at your past filings, all you need are a few clicks. An online process eliminates the need for manual maintenance of your records so that you don’t have to go “looking out” for the relevant information at the time of need.
6. Saves paper. Saves trees. And let’s do a little something for the environment as well.

So now when you have the complete and properly segregated knowledge of everything you’d have wanted to know about e-filing your ITR, as well as the benefits it accompanies, we’d hope that you cut your relation with the offline process, and probably with external help as well, once and for all.

Also, for people who’ve recently switched their jobs, filing ITR becomes a clueless and daunting thing – what documents will be needed? Will the same login work? What new information is needed? etc. etc. Hence, for such kind of people, this article might be helpful.

Let us know if we’ve missed out on anything or if there’s something you want to know with respect to e-filing of your ITR!