What is e-filing:
The full form of e-filing is “Electronic Filing”. In view of
extension of internet, e-filing has not only been popular but is also mandatory
in large number of cases. E-filing is The method of submitting tax returns over the Internet, using tax
preparation software that has been pre-approved by the related tax authority.
Who are Required to E-file their Tax Returns in India :
There are number of cases where Income Tax Department has made it
mandatory to e-file the returns. However, we can in short
say that for individuals with salary income or so and using ITR1 and ITR2,
e-filing is mandatory if the gross income exceeds Rs 5 lakhs or the individual
intends to claim refund of the tax already deducted / paid. In case you
are not covered by this, you need to check the cases where it is mandatory to
e-file the return.
Method for E-filing or How to File Your Income Tax Return Online
:
The income-tax department
has started an independent gateway for e-filing tax returns
—www.incometaxindiaefiling.gov.in. As per the method, Returns can
be e-filed either with or without a digital signature. Those who
e-file returns without a digital signature need to take a copy of form ITR-V,
sign it and send it within a specified period (120 days) to a specified address
(Income Tax Department – CPC, Post Bag No. 1, Electronic City Post Office,
Bengaluru–560100, Karnataka) by ordinary or speed post. In case the
return has been filed with digital signatures you need to send the ITR-V by
post.
The biggest gain of e-filing of tax returns is that you can do this from any place at any time, thereby saving a lot of time and effort. It is simple, easy and faster than filing returns manually.
Income Tax Department also has a Help Desk and in case of queries on e-filing of return, the taxpayer can contact 1800 4250 0025.
What Documents You Must
Have Ready to File AN E-Tax Return:
Before
you start filing your income tax return, there is a lot of ground work and
documents to be collected so that you can easily file the tax return and there
are no discrepancies. Some of the documents you need to collect
before you sit for actual filing of income tax are summarised here:-
(a) Your PAN Card, your e-filing
password, and your bank statements across all the accounts you operate
(including loan accounts)
(b) Your tax returns also ask for your
Aadhar and passport numbers — it is an optional detail, but if you have both,
take those as well.
(c) Form 16 (for Salary payments) and
Form 16A (for income from other sources, e.g. by banks for the interest paid to
you) from all the entities which have made payment to you and deducted
TDS;
(d) If you trade in shares, your D-Mat
account details alongwith the details of the transactions to prepare your gain
/ loss on shares. Prepare Capital Gain / Loss Statement as Short term
loss can be offset against short term and long term capital gains during the
same period
(e) Principal and interest payment
certificate from loan provider (if applicable for claiming
deductions): This is needed as you need to know actual amount you paid
towards your home loan principal and interest (separately) to claim tax
deductions under Section 80C and section 24 respectively.
(f) Verify your tax credit statement:
Form 26AS has now become very important as it gives you the details as how
much tax money was credited on your behalf via TDS. This amount should match
the TDS amount you have from form 16 and form 16A. If these do not match, you
are likely to get a notice from Income Tax Department for explaining the
reasons for the difference.
(g) Long term loss can only be offset
against long term gains during the same period
(h) Chillan’s of Advance Tax or
Self Assessment Tax as details of the same are required to be filled in the
return;
(i) Bank account statements to know the
amount of interest paid by your banks on your saving bank accounts. You
should recheck the credits of the saving bank account to find out whether any
credit has remained unaccounted for;
(j) Details of insurance payments and
donations, and if you are a freelancer or an independent professional, your
credit card bills.
(k) The details of your investments /
payments which are allowed as deductions in Section 80: We know
various deductions (about 17 in number) are allowed under sub-sections of
Section 80. The most popular sections availed by people are deductions
under
i) 80C: Under this Section (including
80CCC and 80CCD) we get deductions for payments that have been made towards
Life Insurance, PF and PPF Schemes and other unit linked savings schemes. The
maximum deduction that is allowed under this section is Rs.1, 50,000.
ii) 80D deductions are exclusively for
medical and health insurance premium payments. The deduction is, limited to
Rs.15,000 if the premium paid is just for yourself, increases to Rs.20,000 for
yourself and your spouse, and goes upto Rs.40,000 if it is paid for yourself
and your parents who are senior citizens
iii) 80TTA 80TTA covers Savings
Bank interest, which is deductible up to Rs.10, 000) and
iv) 80G (Under
this section, deduction is available to any tax payer making donation to the
company. 50% of the donation made is allowed to be deducted from the taxable
income and consequently tax is calculated)
(A)Other
Pre-Requisites For E-Filing of Income tax Return:
· A user must register at https://incometaxindiaefiling.gov.in
· PAN (Permanent Account Number)
https://incometaxindiaefiling.gov.in/e-Filing/Registration/RegistrationHome.html is the direct link for
registering yourself. For registering yourself, you will need to provide
PAN, Password details, Personal details as per PAN, Contact details and Digital
signature (if available and applicable). And submit these details.
On successful acceptance
of the details, Activation link will be sent to user through e-mail and a
mobile PIN to mobile number. Click on the activation link and provide Mobile
PIN to activate e-Filing account.
Once the above procedure,
you should note down your LOGIN details (via login User ID, Password, Date of
Birth/ Incorporation date) etc. as these will be required next time you login
to your account.
(B) Methods for Filing of E-Return:
Income Tax E-return can be down online through the income tax
website without any charges in the following two methods:-
(i) Download the ITR Excel Utility or
ITR Java Utility and furnish the details in the Excel uility
offline and then upload the same on income tax website;
(ii) Income Tax e-filing without
downloading the Jaya Utility and furnishing all details online itself.
The feedback indicates that people find Java Utility to be easier
than the Excel utility. However, you may use the utility which you
feel to be easier.
(C)Various Types of E-Filing:
There are three ways to
file Income Tax Returns electronically:
- (1) e-File
without Digital Signature Certificate. In this case an ITR-V Form is
generated. The Form should be printed, signed and submitted to CPC,
Bangalore using Ordinary Post or Speed Post ONLY within 120 days from the
date of e-Filing. There is no further action needed, if ITR-V Form is
submitted.
- (2) e-File the
Income Tax Return through an e-Return Intermediary (ERI) with or without
Digital Signature Certificate (DSC).
- (3) Use Digital Signature Certificate (DSC) / EVC to e-File. There is no further action needed, if filed with a DSC / EVC.
(D) Types of e-Verification of Returns
There are three options to electronically verify the returns (as per income tax department website)
- e-Verification using e-Filing OTP
- e-Verification using NetBanking login
- e-Verification using Aadhaar OTP validation
Source : Income Tax Department website
E-Filing Process
Income Tax Department on its website: https://incometaxindiaefiling.gov.in/ has given the following diagram which
beautifully sums up the e-filing process / procedure, which we have tried to
explain above.
Source : Income Tax Department website
NOTE
: We have tried to explain the details of e-filing in a systematic and easy to
understand method. However, those who wish to read the full details
and updated information visit the website of income tax department.
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