Introduction on Income Tax

In India, there are two types of taxes: one is direct tax, which is directly levied upon the income of the individual, and another is indirect tax, which is levied indirectly upon an individual. An example of direct tax is income tax, while indirect taxes include Goods and Services Tax, service tax, etc.

Every individual who receives income in India is subject to income tax under the Income Tax Act, 1961. Under this Act, income can be classified into five different heads: salary, house property, capital gains, business and profession, and other sources. Income of individuals, Hindu Undivided Families (HUFs), associations of persons, bodies of individuals, firms, and companies are taxed under the Income Tax Act.

What is Income Tax Return?

Income Tax Return is a form in which the taxpayer, whether an individual, firm, or Hindu Undivided Family, discloses details of their income, claims exemptions and deductions applicable to them, and the amount of tax payable on such income. The Income Tax Return also reflects the amount of taxes paid by the taxpayer.

The income tax return is a form where the taxpayer files data and information regarding their income and tax payable at the end of every financial year.

What is Income Tax eFiling?

Income Tax can be filed in two ways: Online Method and Offline Method. However, as per government instructions, all income tax returns must now be filed only through the ITR eFiling Method. The offline method is no longer available.

From 1st April 2022, ITR Online eFiling is mandatory in the following cases:

• If your taxable income is more than ₹2.5 lakh per year
• If you want to claim any TDS refund
• If you want to take the benefits of carry forward of losses
• If foreign travel expenses exceed ₹2 lakh per year
• If electricity bill expenses exceed ₹1 lakh per year
• If total business sales or turnover exceeds ₹60 lakh per year
• If your TDS is more than ₹25,000 per year

Points to be Considered During Efiling of ITR

• Choose the correct income tax return form
• Clearly identify the heads of income under which it is taxable
• Declare all your assets if your income is more than Rs. 50 lakhs in a year.
• Keep all documents and proofs safe for any future reference.
• Should mention your Aadhar Number
• Study your Form 26AS i.e. tax credit statement
• Check your personal details
• Also add interest income earned from fixed deposits
• Don’t hide any of your source of income
• Report your exempted income
• Should verify your income tax returns

Steps to File Income Tax Return eFiling Online

• Visit https://incometaxindiaefiling.gov.in and create your e filling account.
• Your PAN number will be your login id and you have to create account using the PAN number as login Id and password.
• Login on the website using your PAN number and password
• You now have to link your Aadhar card mandatory.
• You should choose the option of ‘link Aadhaar’ under the profile setting tab. Enter details as per Aadhar card like name, Aadhar number etc. and then confirm and link your Aadhar card to your Income tax account.
• Open form 26AS under the quick link menu. Form 26 AS contains summary of the taxes you have paid over the financial year and includes tax deducted at source, advance tax and self-assessment tax.
• Then download the correct ITR form as mentioned above
• Download the ‘excel utility’ of the Income tax return and fill in details like Name, PAN, Address, Date of birth, Email ID, Mobile number, choose whether original or revised return, Other taxable income, Investments, Taxes deducted, Bank details etc.
• After filling the details click on ‘validate’ button on all sheets of the excel utility.
• Once all sheets are validated click on calculate tax
• Pay the tax payable if any and provide the challan details in the ITR form.
• Click on generate ‘XML’ and save the XML file on your desktop.
• Go to your account on the website and click on ‘upload return’.
• Fill in the ITR form, name, assessment year and upload the XML File. If you have digital signature, then upload it too.
• Click on ‘submit’.
• You will get an acknowledgement. Take a print of the acknowledgement.
• If your have given your digital signature, then your income tax return filling process is complete.
• If not, then you will receive a form ITR-V which is an acknowledgement and verification. You can print the same and sign using blue pen and then post it to the income tax department within 120 days of e-filling at: Income Tax Department – CPC, Post Bag No – 1, Electronic City Post Office, Bengaluru – 560100 within 120 days of e-filing. You will then receive an acknowledgement of receipt of ITR-V by email and SMS.

Conclusion for Income Tax Return

Every taxpayer whether it be an individual, Hindu undivided family, company association of persons, Company etc all have to file income tax returns to the income tax departments. Filling income tax return is very simple and can be done online also.