Electronic filing of income taxes

What is electronic filing

E-filing (electronic filing) your income tax return involves utilizing the online portal of the Income Tax Department to report your income, expenditure, and tax liability to the authorities. Digital filing of ITR is mandatory for all assesses, with a few exemptions.

Benefits of filing ITR digitally

The ITR e-filing process offers the following benefits.

• Instant processing
  You enjoy the advantage of prompt processing of your request. The online mode also makes processing refunds and tax liability estimation hassle-free and streamlined
   
• Accurate
  ITR e-filing allows you to do away with the need to hire tax experts. You can calculate your tax liabilities accurately with deductions and exemptions via self-assessment or using an income tax calculator.
   
• Convenience
  Interactive tax filing with automated and auto-filling options makes e-filing returns more convenient than filling out forms offline
  
  
• Verification of ITR status
  With the online filing of income tax returns, you can check and verify your ITR status with ease. It also allows for safe storage of the receipt generated during the online filing of your ITR. You can access such receipts conveniently in the future for purposes like home loan applications
   
• Easy record maintenance
  E-filing of income tax returns also makes maintaining past records significantly simpler. The online portal of the Income Tax Department stores and maintains all the past records like refunds claimed and returns submitted to facilitate ease of access

Eligibility criteria to file ITR online

The Income Tax Department has mandated all assessees to file income tax returns online. Entities that are exempt from this rule include:

• Income tax assessees above 80 years of age who are taxed as per the super senior citizen income tax slab
• Individuals or members of HUF whose annual income does not exceed Rs. 5 lakh. This income threshold also includes stipulated exemptions

Exempt assessees can choose to file ITR online or offline.

Documents required to file ITR online

You need not attach any documents with your respective ITR forms unless the Income Tax Department specifically instructs you to do so. Nonetheless, you can keep a few documents handy while filing the ITR online for convenience. They include:

• Form 16 for salaried individuals or pensioners
• Profit and loss statement for self-employed individuals or business owners
• Form 26AS
• All investment-related documents for the particular FY (including investment documents under Sections 80C, 80D, 80E, etc.)
• Certificates generated from loan applications

Keeping these documents handy helps you access them without hassle if needed during ITR e-filing.

Steps for online ITR filing

Assessees filing the ITR online for the first time need to first register on the Income Tax Department’s online portal and complete the e-filing income tax login step with the user ID and password.

Next, follow the steps given below to file ITR.

• After logging in, click on the option marked ‘Income Tax Return’ under ‘e-file’
• Choose the correct details from the available options, i.e., ITR Form type, assessment year, mode of payment, and click to continue
• For verification of ITR, select authentication type from EVC using bank details or Aadhaar OTP and click on ‘Continue’. Individuals who have sent ITR-V through the post for verification can skip this step
• Start the e-filing process by filling in general information including name, Aadhaar number, PAN, address, etc. under Part A of the process
• Next, provide income details for gross total income computation
• Enter tax exemptions to compute the total taxable income
• Verify all details, including taxes paid, refund amount, the total amount payable, etc
• Click on ‘Preview and Submit’ to verify if all the details entered are correct
• Next, select ‘Submit’ to successfully complete the process of e-filing income tax

Electronic filing income tax due dates

The due date for filing income tax returns online slated for income generated in FY 2019-20 was put forth as 31st July 2020. It was applicable for all categories of assessees, except businesses requiring audit and those requiring TP report, for which the designated dates were 30th September 2020 and 30th November 2020 respectively. Owing to current circumstances, assessees under all categories need to file ITR online by 30th November 2020.

Important dates for income tax return filing

Here are the important dates concerning income tax return filing that assesses must remember.

• Proof of investment submission – Before 31st January
• Last date to make any investment under Section 80C of ITA, 1961 – Before 31st March
• The due date for e-filing ITR – 31st July
• Verification of tax returns – Between October and November every year

Penalty for late filing of ITR online

You must file your income tax returns annually before the due date. Failure to do so results in a penalty under Section 234F of the ITA, 1961, and includes:

• A fine of Rs. 5,000 if assessee files the return within 31st December of the AY
• Rs. 10,000 in other cases

How to register for electronic filing income tax

The registration process for e-filing income tax includes the following steps.

• Visit the income tax e-filing portal
• Select the ‘User Type’ from these options - Individual, Hindu Undivided Family, Others, etc
• Enter designated details like name, PAN, residential status, and date of birth
• Fill up the registration form with personal details like address, contact number, password, etc. and submit
• Verify your submission with an OTP to complete your registration on the portal

After this, your PAN becomes the registration ID, which you can utilize to log in to this portal.

Why should you complete ITR filing

E-filing of ITR offers the following benefits.

• It helps track refund claims for any excess tax paid online
• Timely ITR filing helps avoid penalties

What are the different income tax returns forms

Different assessee categories can complete e-filing income tax returns via designated forms listed below.

• ITR 1 (SAHAJ) – For those with income of up to Rs. 50 lakh generated from salaries/ pension, house property, and other sources
• ITR 2 – For individuals and members of HUF with no income from business or profession
• ITR 3 – For individuals and members of HUF generating income from business or profession
• ITR 4 (SUGAM) – For individuals/ members of HUF/ firms except for LLPs, who generate income from business or profession on a presumptive basis
• ITR 5 – For entities other than individuals, members of HUF, companies, and persons filing ITR under ITR 7
• ITR 6 – Companies apart from those filing ITR under Form ITR 7
• ITR 7 – For entities other than companies who need to file returns under Sections 139 (4A), 139 (4B), 139 (4C), and 139 (4D)
• ITR 8 – Acceptance form for filing ITR

Make sure to choose the right form for ITR e-filing and undertake the process well before the due date to eliminate the risk of missing the deadline.

Frequently asked questions on income tax electronic filing

What is the new ‘Transparent Taxation Honouring the Honest’ tax program?
The ‘Transparent Taxation - Honouring the Honest’ program was launched on 13th August 2020 by the Prime Minister of India to encourage sincere taxpayers through reforms in the taxation system. These reforms include Faceless Appeal, Faceless Assessment, and Taxpayer Charter through which taxpayers can enjoy benefits like ease of compliance, refund expedition, etc.

What is ITR electronic filing last date for AY 2020-21?
The last date for filing ITR online has been pushed to 30th November 2020 for all assessments for AY2020-21.

How to e-verify ITR?
You can e-verify your ITR through bank ATM, net banking, bank account number, demat account number, and Aadhaar OTP.
Proceed with the following steps to do so

• Complete filing ITR online
• Verify returns within 120 days of filing through the methods mentioned above

What is an e-file?
E-file or electronic file refers to the system of submitting income tax returns to the respective authorities online without any physical documents.

What are the fees for e-filing income tax returns?
There are no charges levied for filing income tax returns online