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Many have heard of the terms — income tax e-filing and income tax returns, but very few know what they are and what documents are required to do income tax e-filing. Before we look into the e-filing process, let us first understand what income tax is.
What is Income Tax?
Every Indian individual who is employed or self-employed is liable to pay tax on their annual income if it is above the minimum threshold. This tax either gets deducted at the source (TDS), or it gets deducted monthly from the salary.
An individual can decrease the total amount of tax that they pay every month by making some investments and/or deposits in the tax-free schemes as notified by the income tax department. Such individuals, who have made investments, can later file for returns on their income tax deducted by the income tax department.
What is income tax returns or income tax e-filing for returns?
Income tax e-filing is a term used for filing income tax returns online. In the income tax returns form, the taxpayer has to fill information about their income earned in the given financial year, the tax-saving investments made by the individual, and the resultant tax applicable in that year, and submit it to the Income Tax (IT) department. The IT department will then analyse your form and initiate the necessary returns. The IT department has issued seven different forms viz ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, ITR 7, to encompass each category of taxpayer. Each taxpayer should do income tax India e-filing before the last date of ITR filing for returns. The features and requirements of each ITR form are different based on the taxpayer’s source of income, the total amount of income earned annually and the taxpayer’s category. A taxpayer can fall into one of the three categories:
- HUF (Hindu Undivided Family)
When should the taxpayer do income tax e-filing?
If the taxpayer falls under any one or more of the below-mentioned criteria, then they should do an income tax India e-filing to gain income tax returns:
- If the gross annual income of the taxpayer is greater than 2.5 lakhs INR and is below 60 years of age, or if it is greater than 3 lakhs INR for an individual who is above 60 years of age but below 80 years, or if it greater than 5 lakhs INR for an individual who is above 80 years
- If the taxpayer has multiple income sources, like capital gains, house rent, investments, etc.
- If the taxpayer wants to claim refunds on the income tax paid to the government
- If the taxpayer wishes to apply for loan or visa
- If the taxpayer has invested in or earned from foreign assets in the current financial year
- If a taxpayer is a firm or a company, irrespective of loss or profit
Documents required for Income tax e-filing
Before embarking on the income tax e-filing process, make sure that you have all the documents required to fill the ITR form online. Salaried individuals usually fill the ITR 1 form for income tax e-filing. If the individual annual income is greater than 50 lakhs INR, then they should use ITR 2. So, let us check out the documents required to file an income tax filing form.
Form 16 is the most vital document required to file ITR filing for income tax returns. The employer issues this form to the employee. It is a TDS certificate which details the annual salary and all the tax deducted from the salary.
The ITR 1 form is the same as or similar to your Form 16, so almost all the details required to file ITR 1 will be available in Form 16. Just make sure that it has the correct PAN number mentioned.
Interest certificate from post office or banks
The individual should also specify their income earned through interests from bank and post office deposits. Interest certificate is proof of the income earned. The bank or post office where you have your deposits will issue this certificate.
Form 16A/Form 16B/Form 16C
If the individual has additional sources of earnings and the tax has been deducted at source on such earnings, then the individual is required to furnish the relevant forms as proof of tax deduction for ITR returns. These include:
- If tax is deducted on the interest earned from bank deposits(such as recurring deposits, fixed deposits, etc), then the bank will provide Form 16A as proof of the deduction.
- If the tax is deducted on the sale of the property, then the buyer will provide Form 16B as proof for the tax deduction.
- If tax is deducted on the income from rentals, then the tenant will issue Form 16C as proof of a tax deduction.
Form 26AS is the consolidated yearly tax statement of the individual. This statement has information on all the tax deductions under your PAN, such as:
- Tax deduction by the employer
- Tax deduction by banks
- Tax deduction by additional income sources
- Advance tax deposited during the previous financial year
- Any self-assessment tax
Form 26AS for ITR e-filing can be downloaded from the TRACES (TDS Reconciliation Analysis and Correction Enabling System) website.
Proof of tax-saving investments
The individual should furnish proof of all the investments done in government authorised investment vehicles to save taxes. This investment helps to lower the tax liability. You can make a claim of a maximum of 1.5 lakhs INR as tax benefits under this section. The various investment vehicles qualified for income tax returns include:
- Paid Life insurance premiums
- Public Provident Fund
- Employee Provident Fund
- National Pension System
- Investments in Equity Linked Savings Scheme
Statement on home loan from bank or NBFC
If the individual has taken a home loan, then they should furnish the home loan statement from the respective bank or NBFC to claim income tax returns. This statement will provide the details of the total loan amount and the monthly outgoings towards the home loan.
If the individual has gained capital by the sale of property or mutual funds or equity shares, then they should report these gains while doing ITR e-filing. Non-disclosure of such information will invite penalty.
Valid bank account details for ECs refund
From 1st March 2019, the income tax department issues only e-refunds. So, while doing income tax returns filing, you need to provide details of a valid bank account linked to your PAN to initiate a successful refund.
The individual should provide proper Aadhaar card details for a successful income tax returns filing of ITR 1 form.
Details of bank accounts
The individual should provide the details of all bank accounts under their name while e-filing income tax.
With the technological development and centralisation of data in India, E-filing Income tax has become an effortless process, as long as you have the relevant documents that support your claim for ITR returns. The ITR form can be filled online, and the refund will be initiated directly to your bank account.
Due Date for Efiling Income Tax
To ensure that taxpayers meet the deadlines for all tax-related matters, the IT department has released the ‘’File-it-Yourself’’ calendar for 2020. The calendar not only helps taxpayers map their ITR filing journey, but also lists all the services and information provided by the IT department that can help make the process of filing taxes extremely convenient for all taxpayers.
As for the due dates, here’s what the calendar has to say:
|Deadline/Due Date/Last Date||For|
|January 15, 30, 31||TDS and TCS deposits for the quarter ending on December 31, 2019.|
|March 15||4th and final installment (payment) of advance tax (2020-21).|
|March 31||For AY 2019-20 with incomplete assessment, filing revised or belated return of income.|
|May 15||Submission of TCS statement for Q4 (FY 2019-20).|
|May 31||Quarterly statement (TDS deposited in the previous quarter).|
|June 15||For AY 2021-22, advance tax (first installment) payment.|
|July 31||Filing of ITR for individuals.|
|September 15||The second installment (payment) of advance tax.|
|September 30||Filing of ITR for corporates and to-be-audited accounts.|
|December 15||The third installment (payment) of advance tax.|
The Pros of Efiling ITR
With the introduction of ITR efiling, taxpayers can breathe a sigh of relief as they no longer have to opt for the cumbersome process of paper filing. Apart from this pro, ITR efiling has several other benefits, such as:
- ITR filing is accurate as the process is automated.
- Processing, payment, refund credits speeds are quick.
- Taxpayers can file their returns much before the due date on the portal. Doing this will ensure that you do not face any issues on the portal which can run slow or crash as a result of increased user traffic and congestion. Advance payment of taxes on the portal also ensures that no interest or penalties are levied for missing the deadlines.
- With the efiling method all transactions with the IT department are recorded for future references. Such records can be leveraged if any business opportunity emerges in the future which require proof of dealings with the IT department
Income Tax e-Filing FAQs
- Which ITR form should be filed by a salaried individual?For a salaried individual, to efile ITR the relevant form is ITR-1 (SAHAJ). However, you might be required to file a different case depending on the income you receive, other than your salary, or your investments. For example, for a salaried individual with capital gains, ITR-2 is relevant.
- Is ITR filing necessary if TDS deductions have been made?According to the Income Tax Act, you will have to file ITR even if you have paid TDS on your salary. TDS on salary is proof of your income exceeding the tax exemption threshold.
- Can ITR for previous years be filed in the current year?No, revised or old ITRs cannot be filed for the current assessment year. Simply put, for AY 2020-21, only FY 2019-20 is considered. However, if you have received notices for any of the previous ITRs, you can file them.
- Are any documents required when filing ITR?Documents need not be attached when filing ITR. But always keep your documents ready at all time as the tax authorities might ask you to produce any as proof.
- What are the various ITR forms that can be used by taxpayers to file returns?The different ITR forms are ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, ITR-7, ITR-V.