Income tax filing is essential for the development and progress of the citizens of the country. Filing ITR regularly makes you financially responsible. This article will explore the importance of ITR filing and how to file ITR in detail.
Income tax returns are essential for individuals who earn a certain amount of money. Firms or companies with self-employed or salaried employees have to file income tax returns to the Income-tax department of India.
But what is an ITR filing? ITR filing is how taxpayers file a report of their total income earned in a financial year. Further, the income tax department of India will examine the file and set the Income-tax returns accordingly.
How to file ITR is another important question that needs a solid answer. But before we go through the process, let’s learn the importance of ITR filling in the details.
Importance of ITR filing
Filing ITR is important because it is a responsible citizen’s moral and social duty to file ITR. Furthermore, it is based on the ITR filed by us that the Government of India determines the number of expenses of the citizens and creates a platform for citizens to claim refunds apart from other forms of relief. Apart from these, there are other reasons why filing ITR is important. They are:
Filing ITR is a sign that indicates that you are responsible
Being a responsible person begins with financial responsibility. If you are financially responsible, you will automatically understand the importance of ITR. It makes you financially liable and helps individuals and businesses enter into future transactions. Further, ITR filed by an individual or business will help the income tax department of India to keep a record of these transactions.
ITR filing is important even if your income level doesn’t qualify
The ITR is filed according to the income slabs wherein your income qualifies. But even if your income doesn’t qualify under the given income slabs, it is ideal to file the ITR voluntarily. Because in some states of India, registration of immovable properties may require proof of the previous tax return history of the individual or company. Moreover, filing ITR helps register the important transactions made by the person.
Learn more about Why Income Tax Return Filing is Important?
ITR filing is essential to prove while applying for loans
Most of us prefer to opt for home loans to build our own homes or other expenses. While applying for a home loan, if you have a good track record of ITR Filings to your credit, then it will help you get the loan without any hurdles. Furthermore, credit card companies go through the ITR filing history of an individual before approving the credit card application. So it is important to have a good ITR notice track record as proof that you are a financially responsible person.
ITR filing history will help you claim against past losses
People or companies go through financial losses in one way or the other. It can be a short-term or long-term loss. But no matter what, it is ideal for keeping a good track record of your ITR filings. Keeping a regular ITR Filing can help you claim for your losses. Because you never know when you will need the same. As bad things don’t come by announcing. Thus, having a solid ITR filing history and getting the claim of your losses effortlessly.
Hence, these are some reasons you have to file ITR. Now we will see how to file ITR in detail.
How to file ITR?
Filing ITR can sound difficult for some. However, the truth is, it is not. The process of filing ITR is simple if you understand the process. There are different categories of ITR 3 form, from ITR 1 to ITR 7. Further, to file for the ITR, you have to choose the right ITR form and apply for the same online or offline. These are the steps involved in filing ITR:
Use the Income tax calculator on Vakilsearch to quickly calculate your taxes and submit your ITR.
- Visit the new Income tax department of the official portal. You can search for the same in Google or other search engines and click on the same.
- Once the website is open, register on the website using your PAN card, which becomes your User ID. Further, click on the login option.
- Navigate through different options and find the “Income Tax Return option” from the drop-down menu. Click on the same.
- Another drop-down menu opens up, and you have to choose the category of ITR form and then select the “Original/Revised return” option. Furthermore, you can click on the “prepare and submit online option.”
- Click on the continue option to proceed forward to the next step.
- Fill out the ITR form with all the required details demanded by the Income-tax department of India.
- Calculate the amount of tax you have to pay.
- Choose the suitable option from the “Taxes paid and verification tab.”
- Preview the form before submitting it to ensure there are no errors and submit it.
- Following the submission of the form, there will be a verification process. You can complete the verification process by submitting your Adhaar OTP, EVC, and ATM details.
- Finally, enter the OTP sent to your mobile number and submit it.
Thus, these are some steps you have to follow to prepare and submit your Income tax slab. But if you are not comfortable with the online process, go for the conventional offline process. They are:
Income Tax Filing offline process
- Visit the official e-filing portal: https://incometaxindia.gov.in/Pages/tax-services/file-income-tax-return.aspx, where you can find the ITR form.
- Download the relevant form under the “ Download > IT preparation software.
- Extract the zip file that you have downloaded.
- Open the tab and provide the necessary details demanded by the Income-tax department of India.
- Confirm all the details and then calculate the tax.
- Save the XML file.
- Login to the e-filing portal by providing the password and verifying the captcha.
- Select the ideal e-file and select the “ Income Tax Return” link.
- Fill in the assessment year and ITR Form number and set the filing type as Original/Revised. Further, set the submission mode XML. The PAN will auto-update.
- Next, confirm the ITR by selecting options like Aadhaar OTP, EVC, or Demat account details.
- Select continue to proceed with the process.
- Finally, attach the XML file and submit the form.
Overall, ITR filings are essential for having a good financial record. Further, these are how you can prepare and submit income tax returns.
- A Complete Guide to File an ITR in India
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- How to file Income Tax Return after the due date?
- Gratuity and its Income Tax Exemption Rules