• eFiling Income Tax

    What is income tax e-filing?

    The Income Tax Department (ITD) offers the provision of filing Income Tax Returns (ITR) online through their official e-filing portal. This makes the ITR filing process much easier and hassle-free for the taxpayers. Moreover, the portal has a distinct division of the different ITR forms that are available on the basis of the different categories of taxpayers. Income tax e-filing allows an individual to file their Income Tax Returns (ITR) while being in the comfort of their own house. The only thing that the taxpayer has to do is to register himself/herself on the income tax department’s official website, log in to the portal, and furnish the data under the respective ITR form.

    What are the benefits of Income Tax Return (ITR) e-filing?

    The benefits of Income Tax Return e-filing can be summed up as follows:

    1. Convenience: The e-filing facility offered by the Income Tax Department (ITD) is very convenient as it can be accessed and filled up at any point in time and at any given place. The e-filing facility can be accessed 24 hours a day, 7 days a week, all around the year. Thus, the process is very convenient and easily accessible.
    2. Promptness in the processing time: The Income Tax Returns (ITR) filed online through e-filing take significantly lesser time to be processed and acknowledged as opposed to the Income Tax Returns (ITR) that are filed manually. In addition to that, if any kind of refund arises after the filing of Income Tax Returns (ITR), it is usually processed much faster through e-filing than through manual filing.
    3. Confidentiality of your data: The e-filing of Income Tax Returns (ITR) is always a better and safer option as it provides a high level of confidentiality of your data. Digitisation, data encryption, strict security provisions make the e-filing process much safer than the manual paper-filing process. E-filing allows your data to be inaccessible to any third person. On the other hand, manual filings pose the risk of loss of confidential data as the data related to the income of the taxpayer can be accessed by anybody who holds the papers.
    4. Accuracy: The e-filing system is more accurate because of built-in validations and electronic connectivity that make it seamless. This makes the e-filing system less prone to errors in comparison to the manual filing system. There are possibilities of human errors as well in data entry when the paper-based data is fed into the electronic system.
    5. Proof of receipt: The taxpayer has to register his/her email ID in the portal while registering for e-filing. This allows the portal to send out emails to the taxpayer at the time of filing the returns as well as the times of every other subsequent filing. This email acts as a proof of receipt.
    6. Access to the records of past filings: The Income Tax Returns (ITR) e-filing offers the taxpayer the ability to access the records of all the Income Tax Returns (ITRs) that have been filed in the past. The data is stored and is kept secured for future references.
    7. User-friendly: The Income Tax Returns (ITR) e-filing offers a user-friendly and detailed portal which makes it easy for the taxpayers to file their returns. The detailed on-screen instructions make it easy for even first time users.
    8. Electronic banking: Electronic banking or e-banking is a very important feature that is integrated with e-filing of Income Tax Returns (ITR). It provides a number of options like direct deposit for refunds if any, and direct debit from the account for tax payments. It also allows the option of ‘file now, pay later’. The taxpayer can also decide the day on which he/she wants to make the tax payment from the bank account.

    Why is it important for taxpayers to file their Income Tax Returns?

    It is important for taxpayers to file their income tax as it stands as record or proof of the taxpayers’ income which is approved by the Income Tax Department (ITD).

    There are a number of advantages of being tax compliant. Some of the advantages of being tax compliant are as follows:

    • It provides easy access to good accommodation
    • It provides easy access to good vehicles
    • It provides easy access to good education
    • It keeps the Income Tax Department (ITD) at bay

    Filing income tax returns is very important, especially if the taxpayer is planning to apply for a loan. It is essential for the taxpayer to provide his/her income tax returns along with the receipts while applying for a loan. There are high chances of a bank rejecting the loan application of an applicant if his/her income tax returns are nil over a time period of more than 3 years.

    Income Tax Returns act as a mandate in some particular cases. Examples of some of these cases are listed below:

    1. Registration of immovable properties like a house will involve no hassles at all if an individual has a track record of filing of income tax returns on time.
    2. An individual’s application made for a credit card might be rejected by the banks in case he/she has not been filing the income tax returns in a timely manner.
    3. Income Tax Returns (ITR) will be mandatory when an individual applies for a VISA. The subsequent processing of the VISA is dependent on the ITR.
    4. Building a good rapport with the Income Tax Department (ITD) is very important. One of the easiest ways to do that is to make sure that the Income Tax Returns are filed on a regular basis and without any error.
    5. Non-compliance with the rules of Income Tax Return (ITR) filings can lead to a number of negative consequences as well, including the incursion of losses in long-term and short-term capital gains.

    Is it compulsory to file the Income Tax Returns (ITR) through e-filing?

    The answer is yes. E-filing of Income Tax Returns (ITR) is a compulsory affair. As the nation walks towards digitalisation, the tax department has also embraced the digital waves and implemented them into our system quite well. E-filing of tax is now compulsory for all taxpayers now except for individuals who are 80 years old or more and for individuals or an Hindu Undivided Family (HUF) whose income is not more than Rs.5 lakh and does not claim refund in the return of income. They can file their Income Tax Returns (ITR) manually.

    Since the e-filing of Income Tax Returns (ITR) is mandatory for all the assessees now, we are going to discuss the method of doing the same. However, before an assessee starts the e-filing process, it is important for him/her to know the different Income Tax Return (ITR) forms that are available on the e-filing portal. It is also important to figure out the group of income that the assessee belongs to, in order to ascertain the file which is applicable for him/her.

    What are the different Income Tax Return (ITR) forms?

    Income Tax e-Filing Process
    Income Tax eFiling Process

    The Income Tax Returns (ITR) e-filing portal presently has 7 ITR forms. These forms are as follows:

    1. ITR-1
    2. ITR-2
    3. ITR-3
    4. ITR-4
    5. ITR-5
    6. ITR-6
    7. ITR-7

    Under which form is an assessee eligible to file his/her Income Tax Returns (ITR)?

    Listed below are the criteria on which the eligibility of an assessee is dependent to be able to file his/her Income Tax Returns (ITR) under the respective ITR forms.

    ITR- 1: Income: If the Income is less than Rs.50 lakh Source of Income:

    • Salary or Pension
    • One House Property
    • Other sources

    Applicable to:

    • Individuals who qualify as Residents and Ordinary Residents (ROR)
    • Individuals whose total income consists of the following:
      • Salary or Pension
      • One House Property (excluding the cases where losses are carried forward from previous year)
      • Other sources (other than winnings from lottery and maintaining race horses)

    ITR- 2: Income: If the income is more than Rs.50 lakh Source of Income:

    • Salary or Pension
    • One House Property
    • Capital Gains
    • Income from partnership firm
    • Foreign income
    • Income from agriculture amounting to more than Rs.5,000
    • Other sources

    Applicable to:

    • An Individual or a Hindu Undivided Family (HUF) -
      • Who is not eligible to file ITR- 1 or Sahaj
      • Who does not draw any income from Business or Profession

    ITR- 3: Income: If the income is more than Rs.50 lakh Source of Income:

    • Salary or Pension
    • One House Property
    • Capital Gains
    • Income from partnership firm
    • Foreign income
    • Income from agriculture amounting to more than Rs.5,000
    • Income from Business or Profession
    • Other sources

    Applicable to:

    • An Individual or a Hindu Undivided Family (HUF) who is drawing income from Business or Profession

    ITR- 4: Income: Tentative income arising from business activities -

    • Under Section 44AD
    • Under Section 44ADA
    • Under Section 44AE

    Applicable to:

    An Individual or a Hindu Undivided Family (HUF) or a Partnership Firm who has:

    • Presumptive business income
    • Income from Salary or Pension
    • Income from One House Property (excluding the cases where losses are carried forward from previous year)
    • Income from other sources (other than winnings from lottery and maintaining race horses)

    ITR- 5:

    ITR- 5 is applicable to the following:

    • Firms
    • Association of Persons or AOPs
    • Body of Individuals or BOIs
    • Limited Liability Partnership or LLPs

    ITR- 6:

    The companies that do not claim exemptions under Section 11 are eligible for ITR- 6 form.

    ITR- 7:

    The ITR- 7 is applicable to individuals and companies who fall under one of the following:

    • Section 139 (4A)
    • Section 139 (4B)
    • Section 139 (4C)
    • Section 139 (4D)

    How to e-file Income Tax Returns (ITR)?

    E-filing of Income Tax Returns (ITR) is quite an easy affair. An assessee might consider one of the following methods to file the returns on the official income tax e-filing portal:

    1. Self-filing: The assessee may opt to file his/her own returns on the tax department’s official website (incometaxindiaefiling.gov.in). If the assessee has sufficient knowledge of Income Tax laws, has easy access to internet, and are well-versed with technology, he/she can easily file the returns using the portal.
    2. Assisted filing: In case an assessee needs assistance to file his/her returns, he/she might consider approaching a Chartered Accountant who can file the returns on his/her behalf. In addition to that, there are a number of third-party intermediaries as well that can provide assistance to an individual for the accurate filing of tax returns. There are a number of e-filing websites that offer comprehensive assistance to the taxpayers in the process of electronically filing the returns.
    3. Mobile applications for e-filing: Our lives are highly dependent on smartphones today. Right from making phone calls to paying our regular household bills, everything can be taken care of through a smartphone. There are a number of third-party applications available on the respective application stores of smartphones which can be downloaded for free. These apps can help the users to file their Income Tax Returns (ITR). However, a majority of these apps are designed to help the filing process under ITR 1 only.
    4. TRPs or Tax Return Preparers: TRPs or Tax Return Preparers are trained and appointed by the government to help assessees to file their Income Tax Returns (ITR). They are usually graduates in commerce, economics, statistics, or law. Tax Return Preparers are registered under the TRP scheme instituted by the Income Tax Department. They possess the training and experience to file tax returns on behalf of the taxpayers.

    Self-filing:

    Self-filing can be done by any individual, provided he/she is registered in the Income Tax e-filing website.

    • How to register yourself on the Income Tax e-filing website? An assessee can register himself/herself on the official website of the Income Tax Department. The details that would be required for the registration process are name of the assessee, date of birth of the assessee, and the Permanent Account Number (PAN) details of the assessee. The PAN details act as a proof of identification in the registration process.
    • What are the different methods of e-filing the Income Tax Returns (ITR)? Once the registration is done, the assessee will be required to choose the mode of e-filing. There are 2 different modes of e-filing on the portal. They are as follows:
      • The first method does not require the assessee to download the forms. He/she can directly fill up the forms online on the portal by choosing the ‘quick e-file’ option. Once the form is duly filled up, it can be straightaway submitted online.
      • In the second method, the assessee will be required to download the required forms from the portal. Once the required forms have been downloaded, the assessee can duly fill up the form as per requirement. Then the filled-up form is to be uploaded to the portal again.
    Income Tax eFiling
    Income Tax eFiling

    How to proceed with the process of Income Tax Returns (ITR) e-filing?

    • At the time of filing the tax returns, the assessee will be required to choose the form which is applicable for him/her. The list of forms available on the portal will be ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7. If the assessee is a salaried individual or draws income from property or pension, he/she will be required to file the Income Tax Returns (ITR) under ITR-1 or Sahaj. ITR-2 is meant for people who have income from long-term and short-term capital earnings. ITR-3 is applicable for individuals or Hindu Undivided Families (HUFs) who draw income from business or profession. Based on the applicability, the Income Tax Return (ITR) form is to be selected.
    • There are a number of documents that should be readily available with the assessee at the time of filing the returns. These documents must be up-to-date and ready. A few documents are absolutely compulsory and one cannot file the returns without them. Such documents are the PAN card, certificates of Tax Deducted at Source (TDS), details of investments, Form 16, Form 16 A, proof of loans (if any), etc.
    • It is important to check the form thoroughly before it is submitted. If the assessee opts for the first method of filing, where the forms are downloaded, filled up, and uploaded back into the website, it is important to cross check the form before uploading it. In case the assessee is filling up the form online, he/she should check the details that he/she has furnished before proceeding to the next step.
    • After completing all the steps mentioned above, a message of acknowledgement will be generated by the system. This message is called the ITR-V and it will notify the assessee of the successful submission of the Income Tax Returns (ITR). The ITR-V will pop-up on the screen of the user. An acknowledgement mail will also be sent to the email address which is registered with the Income Tax Department (ITD) website. The acknowledgement number should be preserved for future reference.

    Method-1: Filing the forms online or ‘quick e-file’

    1. The assessee is required to login to the official website (www.incometaxindiaefiling.gov.in). For the purpose of logging in, the user ID, password, and date of birth of the assessee are needed. After filling up the credentials, the user will be asked to enter a captcha code.
    2. Once the user is logged in, the ‘Filing of Income Tax Return’ option is to be selected.
    3. In the next step, the required ITR form, the assessment year, and the submission mode of the form is to be selected.
    4. After all the details are furnished in the form and cross-checked, the ‘Submit’ button has to be clicked.
    5. After the successful submission of the form, the ITR-V will be generated by the system with the acknowledgement number. This number should be preserved for future reference.

    Method-2: Downloading the required forms from the website and uploading the XMLs

    1. The assessee is required to login to the official website (www.incometaxindiaefiling.gov.in). For the purpose of logging in, the user ID, password, and date of birth of the assessee are needed. After filling up the credentials, the user will be asked to enter a captcha code.
    2. Once the user is logged in, the ‘Income Tax Return Preparation Utilities’ option is to be selected.
    3. In the next step, the required ITR form, the assessment year, and the submission mode of the form is to be selected.
    4. The offline utility needs to be downloaded (Java or Excel).
    5. The Income Tax Returns (ITR) form is to be prepared and saved.
    6. The XML files are to be extracted from the saved form.
    7. The XML files have to be uploaded to the portal again by logging in and selecting the ‘Filing of Income Tax Return’ option.
    8. The filing of the returns has to be e-verified within 120 days from the date of submission of the forms.

    Documents required for filing income tax returns:

    The following documents are required for filing of Income Tax. It is always a safer option to keep the following documents handy while e-filing the Income Tax Returns (ITR) to avoid any kind of last-minute rush. The documents can be listed as follows:

    • Form 16
    • Form 16 A
    • Form 26AS
    • Capital Gain Tax
    • Aadhaar Card
    • PAN card
    • Self-assessment Challan/Advance tax Challan
    • Details about all your bank statements
    • Statement related to home loan
    • Details related to property
    • Deductions under Section 80D to 80U
    • Tax-saving proofs: Tax-saving investments and their proofs such as:
      • Employees Provident Fund (EPF)
      • National Pension Scheme (NPS)
      • Life insurance premiums paid
      • Investments in ELSS schemes of mutual funds
      • Public Provident Fund (PPF) and so on.
    • Salary slips
    • Interest certificate from Banks and Post Office
    • Income Tax (IT) Login details

    Correspondence of Form 16 and Form 26AS:

    Form 16, also known as the TDS (Tax Deducted at Source) Certificate is the base on which filing of Income Tax Returns (ITR) is dependent. The employer of an assessee will provide the form after furnishing all the details pertaining to the taxes paid by them on behalf of the assessee. Form 26AS, on the other hand, is the form which contains all the details in regards to all the taxes that have been deducted from the assessee’s income by any deductor and deposited on his/her behalf.

    At the time of filing the Income Tax Returns (ITR), the assessee should thoroughly check the details provided in Form 26AS. It reflects the tax that has been deducted by an employer and deposited on behalf of the employee with the Income Tax Department (ITD). It is very important for the figures mentioned in Form 16 and Form 26AS to tally. In case the returns are filed without the resemblance of these 2 figures, then a notice will be sent from the Income Tax Department (ITD).

    What are the measures that can be taken in case an individual forgets the login password to the website of the Income Tax Department (ITD)?

    In this age of digitalisation, we have too many passwords to remember. It is quite common for an individual to forget a password. However, it is important to keep in mind that the password set up for logging into the website of the Income Tax Department (ITD) is not retrievable. That is, if the profile holder forgets the password to the profile, he/she cannot recover the password.

    Nevertheless, in case the assessee forgets the password, he/she can follow 1 of the following methods to regain access of the profile and sign in to the website:

    • Creating a new password through the website: The individual can visit the website of the Income Tax Department (ITD) and click on the ‘Forgot Password’ option. This will redirect the user to a page where he/she has to enter the details of his/her Permanent Account Number (PAN). The page will generate a Captcha Code which has to be filled up. Once that is done, the ‘Submit’ button has to be clicked. On successfully completing this step, the website will offer 3 different methods for setting up a new password. The user can choose from one of the following options:
      • Answering the secret question which is set up by the user at the time of registration in the website.
      • Uploading the certificate of digital signature of the assessee.
      • Entering the acknowledgement number which is generated with the ITR-V at the time of filing the Income Tax Returns (ITR) along with the registered bank account number.
    • Creating a new password by sending an official email to the Income Tax Department (ITD): The assessee can also consider sending an official email to validate@incometaxindia.gov.in. The following information have to be mentioned in the email along with the request for password change:
      • The name of the assessee
      • Permanent Account Details (PAN) details of the assessee
      • Either of the assessee’s Date of Birth (DOB) or date of incorporation with the department
      • The name of the assessee’s father
      • The registered postal address of the assessee

    Tax Exemption under Section 80G

    Taxpayers who make monetary contributions towards the operations of the company are eligible for a deduction under Section 80G. Under the provisions of this section, an individual, a firm, or even a group of officials can be the benefactor. In such cases, the tax will be calculated only after 50% of the contribution amount is deducted from the actual taxable income.

    What are the consequences of not filing the Income Tax Returns (ITR) on time or not filing the returns at all?

    The Income Tax Returns (ITR) is required to be filed before 31st July/30th September of the respective Assessment Year. However, it is to be kept in mind that failing to file the returns before the due date might invite both interest and penalty. Both the interest and penalty are independent factors. The penalty and interest are levied based on the situation. Either one or both of them might be levied on a taxpayer. Listed below are the adversities that will be faced by a taxpayer in case he/she fails to file the returns on time:

    • Penalty under Section 271F of the Income Tax Act: A penalty of Rs.5,000 may be levied upon a taxpayer by the assessing officer in case he/she fails to file the returns before the due date for the respective assessment year. Non-filing may also attract the same penalty. Note: With effect from 1 April 2018, the penalty provision in regards to the filing of income tax returns has been abolished for assessment years commencing on or after the aforementioned date. Instead of Section 271F of the Income Tax Act, a new Section 234F has been constituted under the Act. According to the provisions of Section 234F of the Income Tax Act, a fee will be levied in case of a delay made in filing the Income Tax Returns (ITR). This fee will be levied with effect from the assessment year 2018-19 and so on.
    • Interest under Section 234A: As per the provisions of Section 234A of the Income Tax Act, a penal interest of 1% every month or a part thereof will be levied on the payable tax amount in case of delay or non-filing of returns. This interest will be charged till the date of payment of the taxes that are due.
    • Losses will not be carried forward: In case of non-filing or delay in filing of Income Tax Returns (ITR), a taxpayer will not be allowed to carry forward his/her losses. However, as per the provisions of Section 139(1) of the Income Tax Act, the losses arising under the head ‘Income from House Property’ will be allowed to be carried forward in spite of failure of filing of the returns on time.
    • Claiming refund of taxes: A taxpayer must file his/her Income Tax Returns (ITR) in order to claim refund on Tax Deducted at Source (TDS). There might be cases where the actual payable tax is lesser than the tax already deducted through TDS. In such cases, a taxpayer can claim for refunds by filing the Income Tax Returns (ITR).
    • Assessment under Section 144 of the Income Tax Act: Assessment under Section 144 is also known as the Best Judgement Assessment. This is a responsibility which comes upon the assessing officer in the following cases:
      • If a taxpayer is in non-compliance with the terms of a notice issued under Section 142(1) of the Income Tax Act.
      • If the returns are not filed by a taxpayer within the due date as per the prescription of Section 139(1) of the Income Tax Act, a belated return as per Section 139(4), or a revised return as per Section 139(5).

      The assessing officer is responsible for taking the required step on the basis of the information and materials that he/she collects pertaining to the situation.

    • Penalty levied for cases where the income is concealed: A penalty is levied on a taxpayer in case he/she conceals his/her income which is taxable as per the Income Tax Act. According to the Act, till the assessment year 2016-17, penalty was levied as per the provisions of Section 271 (1) (c). The penalty under Section 271 (1) (c) was levied in case of non-filing of returns for taxable income, non-compliance with notices, and for the concealment of income. However, a new Section 270A was implemented with effect from 1 April 2017 by the Finance Act of 2016. This section included penalty for underreporting and misreporting of taxable income.

    What is Form 16? Why is it important?

    The Form 16 or the Tax Deducted at Source (TDS) certificate, is the base of the Income Tax Returns (ITR) filing system. The form is important because it has all the information in regards to the taxes that have been deducted by the employer and paid on behalf of the assessee to the tax department. In this process, all the factors of salary including the basic pay, allowances, and deductions are taken into consideration. The form 16 is to be collected from the employer.

    Is it possible to file Income Tax Returns (ITR) without Form 16?

    Yes, it is possible to file Income Tax Returns (ITR) without Form 16.

    How to file Income Tax Returns (ITR) without Form 16?

    Although Form 16 is one of the most important documents required to file Income Tax Returns (ITR) for salaried individuals, it is possible to file the returns without Form 16 as well. There might be circumstances where the assessee might not get a Form 16. The possible reasons behind that can be the employer closing the business or the assessee quitting the job without the completion of the prescribed exit formalities. Either way, not receiving the Form 16 cannot stop an individual from filing their returns. There a number of other documents which can be used as a reference while filing the returns. The following steps are to be followed to file Income Tax Returns (ITR) without Form 16:

    • Step-1 - Computation of Income from Salary: The first and foremost step is to calculate the Income from Salary. The computation of the salary can be done with the help of salary slips, which will act as the main source of reference for the salary earned by the individual during the financial year. Thus, it is important to collect all the salary slips from all the employers for whom an individual has worked during the year. For the returns filed from this year, that is financial year 2017-18, an individual is required to furnish the complete breakup of his/her salary in the Income Tax Returns (ITR). Some of the fields that are needed to be furnished are income from salary or pension, allowances which are not exempted, deductions that are claimed under Section 16, profits arising from salary, and the monetary value of perquisites received by the assessee. Nevertheless, quite a few companies do not furnish the monetary value of the perquisites and the amount of profits arising from salary. In such cases, the assessee should get in touch with the Human Resource (HR) or the concerned accounts department of the company to get the above details. Other than the factors mentioned above, the allowances provided by the employer, contributions made towards provident fund (PF), and the tax deducted at source (TDS), etc. are furnished on the salary slips. It is also recommended to furnish and use the allowances provided by the employer to lower the tax liability. Allowances may include House Rent Allowances (HRA), Leave Travel Allowances (LTA), Transport Allowances (TA), etc. However, it is to be kept in mind that certain allowances are fully exempt under the act while others are partially exempt.
    • Step-2 - Tallying the Tax Deducted at Source (TDS) with Form 26AS: The Form 26AS is the form which contains the details of all the taxes that have been deducted from the salary of the assessee as well as any other source of income. Before proceeding to the filing of returns, the assessee should make sure that the figures reflecting on Form 26AS are in correspondence to the Tax Deducted at Source (TDS). In case the figures do not match and the returns are filed, the assessee will be receiving a notice from the Income Tax Department (ITD). Thus, in case of discrepancies, it is recommended to get in touch with the deductor of the tax to get a clear picture of the deduction.
    • Step-3 - Computation of income from house property: In the event where an assessee receives a rent by letting a house property owned by him/her, he/she would be required to report the income under the ‘Income from house property’ head. In addition to that, if the assessee has availed any housing loan (on the let out property or on the self-occupied property) and is paying interest on such advances, then he/she will be eligible to get deductions under the same head for the interests being paid. Further, if the assessee is the owner of 2 or more than 2 house properties, then he/she needs to check the deemed let-out concept. In case of rental income being earned, an assessee can claim a deduction of 30% as well as a deduction of the municipal taxes paid from the rental income.
    • Step-4 - Computation of income from capital gains: An assessee will be eligible to claim exemption on the gains earned from the sale of equities or equity-oriented mutual funds, provided they were held for more than a year and sold on or before 31st March of the respective financial year. However, as a document of proof, the summary statement of the equities or equity-based mutual funds has to be collected by the assessee from the broker. In case of gains arising from the disposal of land or building, the assessee should have the purchase and sale deed with him/her to refer to it and have the accurate amounts for calculation.
    • Step-5 - Computation of income from other sources: The income from other sources is also required to be furnished in the Income Tax Returns (ITR). Income from other sources include incomes such as interests earned on different bank accounts (including savings account, recurring deposits account, fixed deposits, etc.), interest earned on income tax refunds, dividends received, income from rented machinery, plant, or furniture, income from pension or annuity, etc. The details in regards to interest earned on income tax refund can be found in Form 26AS. The details pertaining to the income from interest from bank accounts can be found in the respective bank passbook.
    • Step-6 - Computing and claiming available deductions: The next most important step for an assessee would be to figure out all the available deductions that can be claimed by him/her. As per the provisions of the Income Tax Act, there are various sections under which an individual can claim deductions. These sections are Section 80C, 80D, 80CCC, 80CCD, etc. The most common deductions such as life insurance, equity-linked savings schemes, Provident Fund (PF), Public Provident Fund, repayment of principal amount of home loan, etc. fall under Section 80C. Medical insurance premium, on the other hand, falls under Section 80D. The Income Tax Act has a prescribed limit based on which the claims for deductions can be made. For example, under Section 80C, deductions can be claimed to the extent of Rs.1.5 lakh. Thus, it is necessary for an assessee to calculate all the deductions that he/she can avail in order to save on tax payment.
    • Step-7 - Computation of total taxable income: Once all of the above steps are completed, an assessee can figure out his/her total taxable income. To ascertain the total taxable income, all the deductions have to be subtracted from the total income arising from various sources. The end result is the total taxable income.
    • Step-8 - Calculation of income tax liability: For an assessee, it is also important to ascertain the total income tax liability that he/she has. There are a number of third-party websites on the public domain that offers the option to ascertain the income tax liability with the help of income tax calculator. These income tax calculators can be used by an assessee to find out the final income tax liability.
    • Step-9 - Making payment for additional tax liability: After finding out the final income tax liability, if the amount of tax paid as per the figures reflected in Form 26AS is less than the actual liability, the taxpayer will be required to pay the balance amount of tax to the Income Tax Department (ITD). However, if the amount reflected in Form 26AS is sufficient or more than the actual tax liability, the assessee is not required to make any extra payment.
    • Step-10 - Filing the Income Tax Returns (ITR): This is the final step of e-filing without Form 16. Once all of the above steps are successfully carried out, the assessee can login to his/her profile on the e-filing portal and file his/her Income Tax Returns (ITR). However, it is important to e-verify the returns within 120 days from the date of e-filing.

    The steps mentioned above can be followed to e-file Income Tax Returns (ITR) without Form 16. Keeping all the documents listed above handy will make the process of e-filing easier and hassle-free. It is also important to file the returns before the due date to avoid late fees under Section 234F.

    How to reset the password on income tax e-filing website

    Forgetting a password is a common affair in this digital era. Moreover, we often tend to forget the passwords that we don’t use quite often. Thus, forgetting the password to log in to your income tax return (ITR) filing account is quite common. However, e-filing is mandatory now and one is required to log in to their respective accounts in order to be able to file his/her income tax returns. In case an individual forgets his/her password to log in to their account, what can be done to retrieve or reset the password?

    One can use one of the following 4 methods to reset the password for their income tax return (ITR) filing account:

    • Answering the secret question that is set by the user himself/herself at the time of setting up the account.
    • Uploading the user’s Digital Signature Certificate (DSC) to the portal.
    • Generating and using a One Time Password (OTP) on the registered mobile phone number.
    • Generating and using a One Time Password (OTP) using the user’s Aadhaar number.

    On the e-filing website run by the Income Tax (IT) department, the user is required to click on the ‘Forgot Password’ tab. This will redirect the user to a new page where he/she will be asked to enter his/her user ID (PAN) and the captcha code. After this step, the user has to click on the ‘Continue’ tab and follow the on-screen instructions. One of the 4 methods mentioned above can be used to reset the password.

    News About eFiling Income Tax

    • Forgot Password? Here’s How You Can Reset It On The Income Tax E-Filing Website

      In case you forget your password on the income tax e-filing website when logging into the website of the Income Tax Department to download Form 26AS or file your income tax returns, there are four ways through which you can reset it: answering the secret question, using a one-time password, uploading Digital Signature Certificate, and using your Aadhaar one-time password. You can click on the tab that says Forgot Password on the e-filing website of the Income Tax Department after which you will be redirected to a new webpage. On this page, you will have to enter your user ID which is basically your PAN. You will also have to enter the captcha, and then hit Continue. You will then receive the four options mentioned above, and you can choose any one of them to change your password.

      3 September 2018

    • Advantages of filing ITR even when the income is below exemption limit

      The last date for filing the Income Tax Returns (ITR) has been extended by a month and now the deadline is 31 August 2018. This is obviously a good news for assessees who are required to file their returns mandatorily but have not filed it yet as it will not invite penalties. However, there are a number of individuals who are not mandatorily required to file their returns even after earning some sort of income during the year.

      However, the people who are not lawfully required to file their returns are also advised to file their returns to be able to avail certain benefits. Some of these benefits are as follows:

      • Claiming refunds for tax deducted at source (TDS)
      • Processing of documents at the time of applying for loans
      • Carrying forward of losses to set them off against capital gains
      • Establishing a proof of income in case of compensations

      In addition to these, the filing of returns offers a document proof to the individual for his/her income which is recognised by the Income Tax Department (ITD). Thus, it is advisable to keep the Income Tax Department informed about the income and taxability of the individual.

      21 August 2018

    • Deadline for Filing Income Tax Returns Extended to August 31

      The government has given Indian taxpayers a one month extension on filing their taxes. The previous deadline was set for 31 July and has now been extended to 31 August.

      The extension was announced last week by the Central Board of Direct Taxes. The extension has provided a much needed sense of relief for individuals who are yet to file their taxes. According to the new rules, taxpayers could pay as much as Rs.10,000 in penalties for non-filing of their tax returns under section 234F of the Income Tax Act.

      20 August 2018

    • States slip on fiscal targets on farm loan waivers, GST: RBI

      The RBI recently said that the higher expenditure on salaries and waivers on farm loans along with a revenue shortfall on the implementation of the Goods and Services Tax (GST) has led to a slippage of around 0.35% in the states’ fiscal targets. The fiscal target for the year 2017-18 was 3.1%. The central bank also added that the states have failed for the third consecutive year to meet their gross financial deficit (GFD) target. This comes despite expectations of an improvement on higher devolution from the Centre.

      The states are hoping for a 0.2% revenue surplus for the financial year 2019 as opposed to a revenue deficit of 0.4% as per the revised estimates. This will lead to an overall gross fiscal deficit or GFD of 2.6%. The GFD for the financial year 2018 was 3.1%. In a recent study on the finances of states based on the state budgets, the RBI said that farm loan waivers alone have contributed to one-third of the overall slippage worries. This was accompanied by a 0.05% slippage on the overall 0.13% on revenue expenses. The RBI reiterated its concerns on the waivers on farm loans. It said that their track record for the improvement in their productivity has been unproven.

      8 August 2018

    • Income Tax refunds worth Rs.70,000 crore issued, 99 per cent claims processed: CBDT

      The Central Board of Direct Taxes (CBDT) recently said that Income Tax refunds of more than Rs.70,000 crore have been issued to the taxpayers and almost all the refund claims that were pending by the end of June 2018 have been processed. In order to clear the pending refunds, the Income Tax Department (ITD) had executed a dedicated fortnight starting 1 June 2018 and ending 15 June 2018. In certain regions, this drive was further extended to 30 June 2018 in order to meet the requirement. More than 20,000 such issues were taken care of and the refunds were issued to the respective taxpayers as per the dues.

      The Central Board of Direct Taxes (CBDT) also added that a large number of refunds have been issued for the processing of Income Tax Returns (ITR) as well.

      A statement made by CBDT mentions that more than 99% of all the claims that had been put for refunds and were pending for processing by the end of June 2018, have already been processed and refunds have been issued to the respective taxpayers. Till date, refunds have been issued for 45.07 lakh cases since April 2018 to June 2018. Reportedly, this figure is more than the figures for the same time period last year, by almost 9 lakh. The CBDT also added that over 3 lakh refunds for the Assessment Year 2018-19, which have been filed in the last few weeks have also been issued.

      14 July 2018

    • Tax department scrutinising GST credits taken by tech companies

      The indirect tax department is now looking into the capital expenditure of Information Technology enabled Services (ITeS) companies and information technology (IT) companies after suspecting that they have evaded Goods and Service Tax liabilities. The initial investigations by the indirect tax department revealed that the capital expenditure of companies had significantly increased after the implementation of GST. In multiple cases, many IT companies from Hyderabad and Bangalore had placed orders to buy equipment from companies which was long before the implementation of GST but only took the deliveries after the implementation of GST. Tax department officers believe this was deliberately done to take credit on these purchases under GST after its implementation. This could be a case that the company has deliberately planned this well in advance so that all the procurements that have been done after the implementation of GST are rolled out in a perfectly legal manner. The firms will now have to submit the appropriate invoice details, purchase orders and capitalisation details.

      12 July 2018

    • Don’t forget to mention these small things while filing income tax returns

      As the first quarter of the financial year has come to an end, the deadline for filing the Income Tax Returns (ITR) is also nearing. Filing Income Tax Returns (ITR) before the due date has a number of benefits. Given below are a few factors that salaried individuals should not miss out on while filing their Income Tax Returns (ITR):

      • The taxpayer should make sure that the Form 26AS is thoroughly checked before submitting the final returns. The tax department matches the entries made in Form 26AS with the entries submitted by the assessee. In case of discrepancies, the tax department will send a notice to the assessee.
      • It is important to check the year and format of assessment. The correct assessment year and format should be chosen at the time of filing the Income Tax Returns (ITR). There are multiple formats for different types of taxpayers. Thus, it is important to select the correct format as per the eligibility of the assessee.
      • An assessee is required to run through their mutual fund statements and their bank account statements before filing their Income Tax Returns (ITR). The taxes have to calculated for Systematic Investment Plans (SIP) and Systematic Withdrawal Plans (SWP) and filed accordingly.
      • Incomes from interest fall under the head Income from Other Sources. Thus, it is important to file the income earned in terms of interests on savings bank accounts and fixed deposits before filing the Income Tax Returns (ITR).
      • Income of minors (if any) has to be added to the income of a parent before calculating taxable income.
      • Providing the correct bank details is also very important. Tax refunds (if any) are processed to the mentioned bank account.

      11 July 2018

    • Companies get tax notices for passing off cash balances as transition credit

      Companies that had added cash balance lying in their personal ledger account (PLA) to the transitional credit when the tax system moved to the Goods and Services Tax (GST) have received notices issued by the indirect tax department. This has triggered panic among these companies.

      PLA is a cash ledger which is maintained with the central government. Companies used to add money to the PLA to settle specific tax liabilities on a future date. However, PLA balance cannot be used to pay tax under GST. After the rollout of the Goods and Services Tax (GST) last year, companies were enabled to utilise unused old tax credits in their books as transitional credits to set off their GST liabilities.

      The tax notices clearly mentioned that the PLA cannot be transferred through transitional credit form or Tran 1 form. This has triggered panic among a number of medium and large scale companies that were stranded with huge cash balances in their PLA. The problem is particularly specific to a number of companies that operate in tax exempt zones such as Jammu and Kashmir, Himachal Pradesh, and the North Eastern states.

      3 July 2018

    • How to fill tax exempt income and bank details section in ITR1

      Once the tax details section is filled up on the ITR-1 form, there is one final step that you need to fill up. You are required to fill up the details of tax exempt income, details of your bank account, and fill the verification sub-section under the ‘Taxes Paid & Verification tab of the ITR-1.

      The form needs to be filled up with details of exempt incomes although you are not required to pay tax for that. This is done to give the IT department a clear picture about the income tax returns. All the incomes are to be reported in the ‘Exempt Income (For reporting purpose)’ under the fifth tab. Other than that, the bank account details are to be filled up as well.

      2 July 2018

    • Income Tax E-Filing Deadline: Use Tax Calculator to Ascertain I-T Exemptions Accurately

      The deadline for filing income tax returns by salaried individuals for the financial year is approaching and it is important to file the Income Tax Returns (ITR) accurately. Filing of incorrect returns will lead to the IT department to take note of it and they might even send a notice in certain cases asking for an explanation. For the convenience of applicants, the Income Tax Department (ITD) has made the e-filing portal very comprehensive. This will help the taxpayers to file their returns easily and at the same time, they can also calculate the payable income tax and various exemptions accurately.

      The official filing website, www.incometaxindiaefiling.gov.in, has a widget tagged as the ‘Tax Calculator’ which allows the user of the website to access other third-party websites. Under this tab, the user will find 30 different windows which help in calculating 30 different tax or exemption components. These options will help the taxpayer to determine and file the final income tax return.

      19 June 2018

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