Filing of Income tax returns (ITR)

Filing of Income Tax Returns (ITR) is a critical aspect of compliance with the Income Tax Act in India, ensuring individuals and entities report their income, claim deductions, and pay the necessary tax to the government within the stipulated timeline. The process has been significantly streamlined with the introduction of electronic filing (e-filing), making it more convenient and accessible.

Types of ITR Forms:

The Income Tax Department has prescribed different ITR forms based on the nature of income and the type of taxpayer, such as ITR-1 (Sahaj) for salaried individuals having income up to ₹50 lakhs, ITR-2 for individuals and HUFs not having income from profits and gains of business or profession, and so on up to ITR-7 for persons including companies required to furnish return under sections 139(4A), 139(4B), 139(4C), and 139(4D).

Eligibility for Filing ITR:

All individuals and entities with an income above the basic exemption limit are mandated to file their income tax returns. Additionally, filing is compulsory under certain circumstances, such as having a valid visa application or loan request, regardless of the income level.

Due Dates for Filing ITR:

The due dates for filing ITR vary based on the category of the taxpayer. Typically, the due date for individuals, HUFs, and entities not required to get their accounts audited is July 31 of the assessment year. For those required to get their accounts audited, the due date is usually October 31 of the assessment year. These dates can be extended by the government.

Steps for Filing ITR:

• Collect Relevant Documents:

Before filing, gather all necessary documents such as Form 16 (for salaried individuals), bank statements, proof of investments, TDS certificates, and details of other incomes.

• Choose the Right ITR Form:

Select the appropriate ITR form based on your sources of income.

• Register or Login on the e-Filing Portal:

Taxpayers need to register on the Income Tax Department’s e-filing website (https://www.incometaxindiaefiling.gov.in) if they haven’t done so. Those already registered can log in using their PAN.

• Fill in the Required Details:

Enter personal information, income details, deductions, and tax payments. Ensure all information is accurate to avoid discrepancies that could lead to notices from the Income Tax Department.

• Verify Tax Payments:

Cross-verify the tax already paid (TDS, advance tax, etc.) and the tax payable after computation. If additional tax is payable, make the payment online.

• Submit the ITR:

After filling in all details and confirming the accuracy of the information, submit your ITR.

• E-Verify:

After submission, the ITR should be verified, which can be done via an Aadhaar OTP, EVC through net banking, or by sending a signed ITR-V (Acknowledgement) to the CPC, Bangalore within 120 days of filing the return.

Internal Steps for Filing ITR: (Subject to Change)

1. Go to the Income Tax e-Filing portal, https://www.incometax.gov.in/iec/foportal/
2. Login to e-Filing portal by entering user ID (PAN), Password, Captcha code and click ‘Login’.
3. Click on the ‘e-File’ menu and click ‘Income Tax Return’ link.
4. On Income Tax Return Page:
   • PAN will be auto-populated
   • Select ‘Assessment Year’
   • Select ‘ITR Form Number’
   • Select ‘Filing Type’ as ‘Original/Revised Return’
   • Select ‘Submission Mode’ as ‘Prepare and Submit Online’
5. Click on ‘Continue’
6. Read the Instructions carefully and Fill all the applicable and mandatory fields of the Online ITR Form.

Note:

To avoid loss of data/rework due session time out, Click on ‘Save Draft’ button periodically to save the entered ITR details as a draft. The saved draft will be available for 30 days from the date of saving or till the date of filing the return or till there is no change in the XML schema of the notified ITR (Whichever is earlier).

7. Choose the appropriate Verification option in the ‘Taxes Paid and Verification’ tab.

   Choose any one of the following option to verify the Income Tax Return:

   • I would like to e-Verify
   • I would like to e-Verify later within 120 days from date of filing.
   • I don’t want to e-Verify and would like to send signed ITR-V through normal or speed post to “Centralized Processing Center, Income Tax Department, Bengaluru – 560 500” within 120 days from date of filing.
   • Click on ‘Preview and Submit’ button, Verify all the data entered in the ITR.
   • ‘Submit’ the ITR.
   • On Choosing ‘I would like to e-Verify’ option, e-Verification can be done through any of the following methods by entering the EVC/OTP when asked for.
     • EVC generated through bank ATM or Generate EVC option under My Account
     • Aadhaar OTP
     • Prevalidated Bank Account
     • Prevalidated Demat Account

Note
On Choosing the other two verification options, the ITR will be submitted but the process of filing the ITRs is not complete until it is verified. The submitted ITR should be e-Verified later by using ‘My Account > e-Verify Return’ option or the signed ITR-V should be sent to CPC, Bengaluru.

• The EVC/OTP should be entered within 60 seconds else, the Income Tax Return (ITR) will be auto-submitted. The submitted ITR should be verified later by using ‘My Account > e-Verify Return’ option or by sending signed ITR-V to CPC.
• To view the uploaded ITRs ​​

Consequences of Not Filing ITR:

Failing to file an income tax return can result in penalties, interest on unpaid tax, and even prosecution in severe cases. Late filing fees under section 234F can be levied, ranging from ₹1,000 to ₹10,000, depending on the total income and the extent of delay.

Amendments and Rectifications:

If any discrepancies are noticed after filing, the Income Tax Act allows for the filing of a revised return under section 139(5) within the specified timeline, typically before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.