Filing your Income Tax Return (ITR) in India is more than just a legal requirement; it offers a multitude of advantages for the taxpayer and the country as a whole. Fulfilling your tax obligations ensures you contribute to the government’s finances and national development. But the benefits go beyond that. Filing your ITR opens the door to claiming tax refunds if you’ve paid excess taxes. It also serves as a valuable proof of income, which can be essential for securing loans, applying for visas, or participating in government tenders.
Regular ITR filing builds a strong credit history, potentially leading to easier loan approvals and better interest rates. Notably, The final date for filing ITR (Income Tax Return) for the FY 2023-24 is Wednesday, July 31, 2024.
Points to remember
There are a few essential concepts to understand before getting into the online ITR filing process. The Assessment Year (AY) refers to the financial year following the one in which you earned income. For example, if your income is for the financial year 2023-2024, the assessment year would be 2024-2025. You’ll also need your Permanent Account Number (PAN card), a unique identifier the Income Tax Department uses. Ensure your PAN is active and linked to your UID number for a seamless online filing experience. Finally, there are various ITR forms designed for different taxpayer categories. The most common form for resident individuals with income from salary, pension, one-house property, and other sources like interest income is ITR-1 (SAHAJ).
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Old Tax Regime vs New Tax Regime
In India, income tax is levied under two main regimes: the old and new tax regimes. Each offers distinct advantages and disadvantages. The old regime features a tiered tax structure with progressively higher rates as your income increases. This might seem like a drawback, but it’s balanced by the ability to claim deductions and exemptions on various expenses and investments. These deductions in sections like 80C (investments) and HRA (house rent allowance) significantly reduce your taxable income, potentially leading to a lower tax bill.
On the other hand, the new tax regime boasts a simpler structure with lower flat tax slabs compared to the old regime. While this translates to lower tax rates, it comes at the cost of limited deductions and exemptions. Most benefits available under the old regime are eliminated here, meaning your taxable income might be higher.
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Step-by-step guide to e-filing your ITR:
- Login to the Income Tax e-filing portal: Visit [income tax department website ON incometax.gov.in]. If you’re a new user, register yourself using your PAN details.
- Click ‘File Income Tax Return’: On the dashboard, locate the ‘e-File’ section and select ‘Income Tax Returns’ followed by ‘File Income Tax Return’.
- Select the Assessment Year and Filing Status: Choose the correct assessment year corresponding to the income you’re filing for. Next, select your filing status, such as ‘Individual’ or ‘Hindu Undivided Family’ (HUF).
- Choose the ITR Form: You must select the appropriate ITR form. If your income profile aligns with the criteria mentioned earlier, ITR-1 (Sahaj) is the most likely choice.
- Filing Type: Specify whether you’re filing an ‘Original’ return (first time for the AY) or a ‘Revised’ return (corrections to a previously filed return).
- Tax Filing Mode: Select ‘Prepare and Submit Online’ to complete the entire process electronically.
Read Also:5 strategies to increase your tax refund on filing your ITR
Filling the ITR form (ITR-1):
- The portal offers pre-filled information based on Forms 16 (received from employers) and 16A (received from banks) submitted by deductors. However, it’s essential to review and edit these details, if necessary, meticulously. Personal Information: Verify your PAN, name, address, and contact details.
- Income Details: This section captures your income from various sources like salary, interest, house property, and capital gains. Ensure you have the relevant documents for accurate reporting.
- Deductions and Tax Payments: Claim allowable deductions under various sections like Chapter VI-A deductions for investments, medical expenses, etc. Pre-paid taxes deducted from the source will be reflected here.
- Tax Computation: The portal calculates your total tax liability based on the income and deductions entered.
- Verification: Once satisfied with the information, proceed to verification. You can choose between Aadhaar OTP, EVC (electronic verification code) from your bank, or a physical verification sent via post.
Post-filing:
After successful verification, your ITR will be considered filed. It’s advisable to download and save the acknowledgement receipt for future reference.
Additional tips:
- Gather Documents: Keep all relevant documents like salary slips, Form 16, bank statements, investment proofs, and property papers readily available for reference while filling out the ITR.
- Start Early: Don’t wait until the last minute to file your ITR. Early filing allows you to rectify any errors or discrepancies before deadlines.
- Seek Professional Help: If your income profile is complex or you have doubts, consider consulting a tax professional for guidance.
Read Also: Income Tax: Know these 5 key points before filing ITR early
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