How to File ITR for the First Time: A Comprehensive Guide

Confused about filing your Income Tax Return (ITR) for the first time? This guide walks you through each step, from understanding the basics to choosing the correct ITR form and verifying your returns.
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12 June 2024

Filing an Income Tax Return (ITR) for the first time can seem complicated, but with the right information and guidance, the process can be straightforward and stress-free. This comprehensive guide will walk you through each step to ensure you can file your ITR accurately and efficiently.

Step 1: Understand the basics

What is ITR?

An Income Tax Return (ITR) is a form that individuals, businesses, and other entities use to report their income, expenses, tax deductions, investments, and other financial details to the Income Tax Department of India. Filing ITR is mandatory for individuals whose income exceeds the basic exemption limit.

Why file ITR?

Filing ITR is not only a legal obligation but also provides several benefits:

  • Proof of income
  • Claiming tax refunds
  • Applying for loans
  • Carrying forward losses
  • Avoiding penalties

Step 2: Gather necessary documents

Before you start the filing process, ensure you have the following documents ready:

  • PAN card: Your Permanent Account Number (PAN) is a unique identifier for tax purposes.
  • Aadhaar card: Mandatory for filing ITR in India.
  • Bank statements: Detailed records of all your financial transactions.
  • Form 16: Issued by your employer, this form details your salary and tax deductions.
  • Form 26AS: Your consolidated annual tax statement.
  • Investment proofs: Documents for investments made under Section 80C (PPF, NSC, etc.), Section 80D (medical insurance), and other deductions.
  • Loan certificates: Interest certificates for home or education loans.
  • Salary slips: Detailed records of your monthly salary.

Step 3: Register on the income tax e-filing portal

Follow the simple steps below to register:

  1. Visit the official Income Tax e-filing portal
  2. Click on the 'Register' button.
  3. Select 'Individual' as the user type.
  4. Enter your PAN number, name, and date of birth as per your PAN card.
  5. Complete the registration process by providing your contact details and setting a password.

Step 4: Choose the correct ITR Form

Different ITR forms are applicable to different types of income and entities. For most salaried individuals, ITR-1 (Sahaj) is the appropriate form. If you have additional income from other sources, such as rental income or capital gains, you might need to use ITR-2 or ITR-3.

Step 5: Log in to the e-filing portal

Use your PAN as the user ID and the password you created during registration to log in to the e-filing portal. If you file online, the form will be automatically filled in with your details. While filing ITR electronically, you must choose the assessment year correctly.

Step 6: Fill in your personal information

  • Name
  • PAN
  • Aadhaar number
  • Address
  • Date of birth
  • Bank account details

Ensure that all information matches your official documents to avoid discrepancies.

Step 7: Fill in income details

  • Salary income: Refer to your Form 16 for details.
  • House property income: Rental income and deductions such as municipal taxes and interest on home loans.
  • Other sources: Interest from savings accounts, fixed deposits, etc.

Step 8: Declare deductions and tax-saving investments

  • Section 80C: Investments in PPF, NSC, ELSS, etc. (up to Rs. 1.5 lakh).
  • Section 80D: Medical insurance premiums.
  • Section 80E: Interest on education loans.
  • Section 80TTA: Interest on savings accounts (up to Rs. 10,000).

Step 9: Pay additional tax (if any) and e-verify your returns

If there is any additional tax payable after considering TDS and other credits, pay the tax online through the e-filing portal using Challan 280.

The final step of how to file ITR for the first time is the e-verification of your return within 120 days of filing. This can be done through the following modes:

  • Aadhaar OTP: Receive an OTP on your registered mobile number linked with Aadhaar.
  • Net banking: Generate an Electronic Verification Code (EVC) through your bank’s net banking portal.
  • Physical ITR-V: If you cannot e-verify, sign the ITR-V acknowledgment and send it to the Centralized Processing Centre (CPC) in Bengaluru within 120 days.

Tips for first-time ITR filing

  1. Double-check details: Ensure all personal details and income figures are accurate.
  2. Claim all deductions: Make sure to claim all eligible deductions to reduce your tax liability.
  3. Cross-verify with Form 26AS: Always cross-verify TDS details with Form 26AS to avoid discrepancies.
  4. Keep records: Maintain all supporting documents for investments, deductions, and other incomes.
  5. File before deadline: File your ITR before the deadline to avoid penalties and interest.

Common mistakes to avoid

  • Incorrect personal information: Ensure your personal details are accurate and match your official documents.
  • Missing income sources: Report all income sources, including interest income and rental income.
  • Overlooking deductions: Claim all eligible deductions to maximize your tax benefits.
  • Not verifying ITR: Failing to verify your ITR can lead to the return being considered invalid.

Filing your ITR for the first time can be a smooth process if you follow the steps outlined in this guide. By understanding the requirements, gathering the necessary documents, and accurately reporting your income and deductions, you can ensure a hassle-free filing experience.

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Frequently asked questions

How should a beginner file a tax return?
A beginner should start by registering on the e-filing portal of the Income Tax Department. Gather essential documents like PAN, Aadhaar, and income details, choose the correct ITR form, calculate taxable income, and submit the return. Verification can be done electronically or by post.
How to pay income tax for the first time?
To pay income tax for the first time, calculate your total taxable income, check the applicable tax slab, and determine the tax amount. Any discrepancy between the calculated tax and the tax deducted at source should be paid online through the Tax Information Network.
Is filing ITR easy?
Yes, filing ITR can be easy with a basic understanding of income sources, tax laws, and deductions. The online e-filing portal of the Income Tax Department provides a user-friendly interface for taxpayers, making the process straightforward and simple.
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