Income Tax in India: Guide, IT Returns, E-filing Process 2020

Last Updated at: June 24, 2020
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Income Tax in India_ Guide, IT Returns, E-filing Process 2020
In a press conference on 13th May, 2020,the Honourable Finance Minister of India has extended the Income Tax Return (ITR) filing deadline for FY 2019-20 till 30th November. This was a part of the economic booster dose of Rs 20 lakh Crore announced by Hon’ble PM during the COVID-19 outbreak.

 

What is Income Tax Returns?

Who needs to file IT Returns?

What is the tax slabs for resident Indians?

Why do you have to file Income Tax returns?

What are the benefits of filing Income Tax Returns?

How to file Income Tax return online?

The tax structure in India is divided into direct tax and indirect tax. Direct tax is levied on taxable income earned by individuals and business entities. On the other hand, indirect tax is levied on the sale and provision of goods and services. It is collected by the intermediary and later paid to the government instead of assesses directly.

In this article, let’s look into the income tax structure in detail and how to e-file your income tax returns.

What is Income Tax Returns?

The income tax return is a tax form or forms which contain details of income, expenses and other tax information which is to be furnished by the taxpayers to the income tax department in the specified format. Every year different types of ITR forms are prescribed by the income tax department for different taxpayers having income from different sources.

ITR forms range from ITR 1 to ITR 7, used by taxpayers having a different income. ITR 1 is easy to file but some of the other ITR forms need additional disclosures such as balance sheets and a profit or loss statement.

Here, you can download the IT Returns Forms

File Your Income Tax Returns

Who needs to file IT returns?

Whether you’re a resident Indian or an NRI, filing income tax returns is compulsory if the assessee whose gross income is over the exemption limit for the year. Income tax law prescribes the rate at which such income should be taxed.

Individuals’ income is grouped into different tax slabs and each tax slabs have different tax rates.

Tax Slabs for Resident Indians in 2020-2021

Income Range Tax Rate
Upto Rs 5,00,000 Nil
Rs 5,00,001 to Rs 7,50,000 10%
Rs 7,50,001 to Rs 10,000,00 15%
Rs 10,000,01 to Rs 12,50,000 20%
Rs 12,50,000 to Rs 15,000,00 25%
Above Rs 15,000,00 30%

Why do you have to file Income Tax Returns?

Whether your gross total income meets the threshold limit or not, it’s a good practise to file or e-file your ITR. There are certain benefits one can avail of provided the income tax returns have been filed.

Benefits of filing income tax returns (ITR):

  1. Claiming tax refund

If excess tax has been paid or tax deducted at source (TDS) on some investment during a financial year, a person can claim a refund by filing ITR in the relevant assessment year.

  1. Visa processing

At the time of processing your visa application, you’ll need to furnish copies of the ITR filed for the past couple of years as a proof of income. This document helps them to evaluate your financial health and in return, it shows how well you can support yourself in their country.

  1. Availing loan

To avail of a loan like a vehicle loan, home loan, etc., it is important to produce a copy of your tax returns. It reflects on your financial discipline and capacity to repay a loan. 

  1. Carry-forward of losses

Income tax law allows to carry-forward losses incurred for a financial year to those who file ITR within the due date in the relevant assessment year. By doing so, you can set off against the income of the subsequent years.

  1. Avoid penalty

Income tax officials have the authority to impose a penalty up to Rs 5,000 on persons who required to file ITR but didn’t. So it’s important to file tax returns within the due date.

  1. Proof of income in compensation cases

Furnishing tax returns as an income proof will help in arriving at compensation in case of accidental disability or death.

How to file Income tax returns online?

STEP 1:

Visit the income tax website – https://www.incometaxindiaefiling.gov.in/home and click on the IT Returns preparation software from the “Download” section.

Income Tax in India: Guide, IT Returns, E-filing Process 2020

Choose the relevant assessment year and download the offline software either in MS Excel or Java format based on your preference.

Income Tax in India: Guide, IT Returns, E-filing Process 2020        

STEP 2:

Prepare the tax returns using the downloaded software.

  • It is necessary for the taxpayers to gather all the information regarding your income, deduction, tax payment details and all other necessary documents.
  • Pre-populate the personal details by clicking on the “Pre-fill button”. And, fill in all the details of your income, tax payments and TDS deducted. Make sure that no information is left out.
  •  Next, click on “Calculate” to determine the tax and interest liability and check for the tax payable or refund receivable as per the software.

If the tax payable, thew it is important to pay at the earliest and enter the details and make sure tax payable becomes zero.

  • Upon successful validation, click on the “Generate XML”  button to convert the file into an XML file format and save it in your PC/laptop.
STEP 3: Upload the tax returns in XML file format

Now, log in to the income tax e-filing portal with the User ID, Password and Captcha. Taxpayers can also log in through Net banking.

Income Tax in India: Guide, IT Returns, E-filing Process 2020

Income Tax in India: Guide, IT Returns, E-filing Process 2020

Step 4:

Click on the “E-file” option and select the “Income Tax Return” option.

Income Tax in India: Guide, IT Returns, E-filing Process 2020

STEP 5:

Fill in all the necessary details such as PAN number, assessment year, ITR form number and submission mode. In submission mode, remember to choose “Upload XML.”

Upload DSC, if applicable and click on the “Submit” button.

Income Tax in India: Guide, IT Returns, E-filing Process 2020

STEP 6:

Upon successful submission, ITR-V will be displayed (if DSC is not used). Click on the link and download the ITR-V. Printed ITR-V should be signed and submitted to CPC, Bengaluru within 120 days from the date of e-filing.

  • Your ITR-V will also be sent to your registered e-mail ID.
  • If income tax returns are filed with DSC, the return filing process is complete.
  • This is the end of e-filing ITR by taxpayers.
0

Income Tax in India: Guide, IT Returns, E-filing Process 2020

428
In a press conference on 13th May, 2020,the Honourable Finance Minister of India has extended the Income Tax Return (ITR) filing deadline for FY 2019-20 till 30th November. This was a part of the economic booster dose of Rs 20 lakh Crore announced by Hon’ble PM during the COVID-19 outbreak.

 

What is Income Tax Returns?

Who needs to file IT Returns?

What is the tax slabs for resident Indians?

Why do you have to file Income Tax returns?

What are the benefits of filing Income Tax Returns?

How to file Income Tax return online?

The tax structure in India is divided into direct tax and indirect tax. Direct tax is levied on taxable income earned by individuals and business entities. On the other hand, indirect tax is levied on the sale and provision of goods and services. It is collected by the intermediary and later paid to the government instead of assesses directly.

In this article, let’s look into the income tax structure in detail and how to e-file your income tax returns.

What is Income Tax Returns?

The income tax return is a tax form or forms which contain details of income, expenses and other tax information which is to be furnished by the taxpayers to the income tax department in the specified format. Every year different types of ITR forms are prescribed by the income tax department for different taxpayers having income from different sources.

ITR forms range from ITR 1 to ITR 7, used by taxpayers having a different income. ITR 1 is easy to file but some of the other ITR forms need additional disclosures such as balance sheets and a profit or loss statement.

Here, you can download the IT Returns Forms

File Your Income Tax Returns

Who needs to file IT returns?

Whether you’re a resident Indian or an NRI, filing income tax returns is compulsory if the assessee whose gross income is over the exemption limit for the year. Income tax law prescribes the rate at which such income should be taxed.

Individuals’ income is grouped into different tax slabs and each tax slabs have different tax rates.

Tax Slabs for Resident Indians in 2020-2021

Income Range Tax Rate
Upto Rs 5,00,000 Nil
Rs 5,00,001 to Rs 7,50,000 10%
Rs 7,50,001 to Rs 10,000,00 15%
Rs 10,000,01 to Rs 12,50,000 20%
Rs 12,50,000 to Rs 15,000,00 25%
Above Rs 15,000,00 30%

Why do you have to file Income Tax Returns?

Whether your gross total income meets the threshold limit or not, it’s a good practise to file or e-file your ITR. There are certain benefits one can avail of provided the income tax returns have been filed.

Benefits of filing income tax returns (ITR):

  1. Claiming tax refund

If excess tax has been paid or tax deducted at source (TDS) on some investment during a financial year, a person can claim a refund by filing ITR in the relevant assessment year.

  1. Visa processing

At the time of processing your visa application, you’ll need to furnish copies of the ITR filed for the past couple of years as a proof of income. This document helps them to evaluate your financial health and in return, it shows how well you can support yourself in their country.

  1. Availing loan

To avail of a loan like a vehicle loan, home loan, etc., it is important to produce a copy of your tax returns. It reflects on your financial discipline and capacity to repay a loan. 

  1. Carry-forward of losses

Income tax law allows to carry-forward losses incurred for a financial year to those who file ITR within the due date in the relevant assessment year. By doing so, you can set off against the income of the subsequent years.

  1. Avoid penalty

Income tax officials have the authority to impose a penalty up to Rs 5,000 on persons who required to file ITR but didn’t. So it’s important to file tax returns within the due date.

  1. Proof of income in compensation cases

Furnishing tax returns as an income proof will help in arriving at compensation in case of accidental disability or death.

How to file Income tax returns online?

STEP 1:

Visit the income tax website – https://www.incometaxindiaefiling.gov.in/home and click on the IT Returns preparation software from the “Download” section.

Income Tax in India: Guide, IT Returns, E-filing Process 2020

Choose the relevant assessment year and download the offline software either in MS Excel or Java format based on your preference.

Income Tax in India: Guide, IT Returns, E-filing Process 2020        

STEP 2:

Prepare the tax returns using the downloaded software.

  • It is necessary for the taxpayers to gather all the information regarding your income, deduction, tax payment details and all other necessary documents.
  • Pre-populate the personal details by clicking on the “Pre-fill button”. And, fill in all the details of your income, tax payments and TDS deducted. Make sure that no information is left out.
  •  Next, click on “Calculate” to determine the tax and interest liability and check for the tax payable or refund receivable as per the software.

If the tax payable, thew it is important to pay at the earliest and enter the details and make sure tax payable becomes zero.

  • Upon successful validation, click on the “Generate XML”  button to convert the file into an XML file format and save it in your PC/laptop.
STEP 3: Upload the tax returns in XML file format

Now, log in to the income tax e-filing portal with the User ID, Password and Captcha. Taxpayers can also log in through Net banking.

Income Tax in India: Guide, IT Returns, E-filing Process 2020

Income Tax in India: Guide, IT Returns, E-filing Process 2020

Step 4:

Click on the “E-file” option and select the “Income Tax Return” option.

Income Tax in India: Guide, IT Returns, E-filing Process 2020

STEP 5:

Fill in all the necessary details such as PAN number, assessment year, ITR form number and submission mode. In submission mode, remember to choose “Upload XML.”

Upload DSC, if applicable and click on the “Submit” button.

Income Tax in India: Guide, IT Returns, E-filing Process 2020

STEP 6:

Upon successful submission, ITR-V will be displayed (if DSC is not used). Click on the link and download the ITR-V. Printed ITR-V should be signed and submitted to CPC, Bengaluru within 120 days from the date of e-filing.

  • Your ITR-V will also be sent to your registered e-mail ID.
  • If income tax returns are filed with DSC, the return filing process is complete.
  • This is the end of e-filing ITR by taxpayers.
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