The last date to file your income tax returns (ITRs) is July 31. All Indians, including NRIs, with a gross total income of over Rs 2.5 lakh have to mandatorily file returns. The threshold for senior citizens (above 60 years) is Rs 3 lakh while that for super senior citizens, aged over 80, is Rs 5 lakh. Significantly, all to file individual taxpayers are now required ITR electronically - only super senior citizens and assessees with annual income of under Rs 5 lakh, who are not seeking a refund, can choose to do so in paper form.
The first step is to correctly pick the ITR form that applies to you:
- ITR-1: Also called Sahaj, this form is for individuals boasting total income up to Rs 50 lakh. This covers salary or pension income, income from one house property (not a case of brought forward loss) or from other sources except lottery/horse racing winnings, as well as income-related to patents and dividends.
- ITR-2: This form is for individuals earning over Rs 50 lakh annually, those who own more than one house property as well as those who hold directorship in a company. According to Cleartax, this is also the form to pick if you have to declare capital gains, foreign assets/income or if you hold unlisted equity shares shares. It is also applicable for an individual and Hindu Undivided Family (HUF) not having any income from profit and gains from business or profession.
- ITR-3: This is for individuals and HUFs having income from a proprietary business or profession. Moreover, partners of partnership firms will have to use this form, not ITR-2, if they only receive exempt income from their firms, which is a share of profits not remuneration and interest.
- ITR-4: Also called Sugam, this form is for individuals, HUFs and partnership firms that have opted for the presumptive income scheme as per Section 44AD, Section 44ADA and Section 44AE and whose income is not more than Rs 50 lakh.
- ITR-5: This applies to Association of Persons [AOPs], Body of individuals [BOIs], firms, LLPs, artificial juridical persons, cooperative societies and local authorities.
The remaining ITR forms apply to companies, trusts, institutions, political parties, colleges, investment funds and the like and the dedicated tax filing portal of the Income Tax Department (incometaxindiaefiling.gov.in) does not cover them.
Once you know which form to pick, keep your Form 16 and investment details handy and then follow the following steps on the portal:
- Log into incometaxindiaefiling.gov.in. If you don't have a password, you will have to click on the green "Register yourself" tab on the left side of the homepage. All you need to do is key in your PAN details as well as the required contact details and choose a password.
- Go to the e-file option and click on "Prepare and Submit ITR Online". Only ITRs 1 and 4S can be filled online.
- Select the form that applies to you and the Assessment Year.
- Fill in the details, if you have multiple bank account, select the pre-validated bank account where you wish to receive your income tax refund, and then click the 'Continue' button.
- The ITR-1 form on the portal is divided into seven tabs, namely General Instructions, Part - A General Information, Computation of Income and Tax, Tax Details, Taxes Paid & Verification, and the last two are for donations.
Remember that starting this year, the Income Tax Department will provide pre-filled ITR-1 forms that will state your salary, FD and bank interest income, TDS details, capital gains from securities, dividends, tax deductions claimed under Sections 80C to 80U and your contact information. This data will be collected from multiple sources such as banks, your Form 26AS, the TDS return filed by your employer, your previous year's ITR, stock exchanges, mutual funds, EPFO, State Registration Departments, etc.
To be on the safe side, go through all the pre-filled date carefully and correct any errors that you spot. The idea behind this move is to make the process of filing tax returns faster and less cumbersome for individual taxpayers. However, apart from ITR-1, the other ITR forms have not been covered by this facility yet.
Apart from the steps mentioned above, taxpayers also have the option of downloading the ITR preparation software from the Income tax website, filling in the information required, generating the ITR data in XML format and lastly uploading it on the e-filing portal.
The last step is to upload a Digital Signature Certificate (DSC), if applicable, so long as its registered with e-Filing. The DSC is a must for filing ITRs that need to be audited. Click on 'Submit'. On successful submission without DSC, your Income Tax Return-Verification (ITR-V) form would be displayed on the screen. Click on the link and download the ITR-V. You can then choose to either instantly e-verify your tax return - say, via Aadhaar on the same portal - or paper verify it by sending a signed copy of the ITR-V to the Department's Centralized Processing Centre (CPC) by post within 120 days from the date of e-filing.
You can also choose to file your ITR on Cleartax or Taxspanner, where you get the handy option to upload your Form 16. This makes things much simpler for the taxpayer. Fill in all the details required over the next several pages and proceed to e-filing. Here, too, you need to e-verify your ITR.
According to the Revenue Department, over 1.46 crore tax returns have already been filed so far. It's in your interest to not wait till the nth hour to file your ITR. Missing the July 31 deadline - unless the government announces an extension in the days ahead - can prove to be costly. The penalty for ITRs furnished on or before December 31 is Rs 5,000, but double that amount for later filings. However, if your taxable income is below Rs 5 lakh, the maximum penalty will be Rs 1,000. On the other hand, if the tax evaded "exceeds Rs 25 lakh the punishment could be 6 months to 7 years" the Income Tax Department says on its website.