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Home » How to File Income Tax Return in India: Step-by-Step Guide

How to File Income Tax Return in India: Step-by-Step Guide

  • May 20, 2022June 13, 2022

Income tax is a tax levied by the government on the income of individuals and businesses. India, like most other countries, has a system of income taxation in place to generate revenue for the government. In this article, we will discuss how to file an income tax return in India. 

This guide will provide step-by-step instructions on how to file your income tax return online. We will also cover some of the most common mistakes people make while filing their returns. So without further ado, let’s get started

1. What is Income Tax Return (ITR)?

Income Tax Return (ITR) is a document that individuals and businesses are required to file with the Income Tax Department. The ITR forms are used to calculate an individual’s or company’s tax liability. They must be filed every year, and the due date for filing is typically 31 July. There are different ITR forms for different types of taxpayers, and the form that must be used depends on the taxpayer’s income, business, and other factors. For example, self-employed individuals must use ITR-1, while those who earn income from sources other than employment must use ITR-2. Businesses must use ITR-3 or ITR-4, depending on their business structure. Filing an ITR is mandatory for all taxpayers who meet the minimum income threshold, and those who fail to do so may be subject to penalties. While the process of filing an ITR can be complex, there are many resources available to help taxpayers understand and comply with their obligations.

2. Who needs to file ITR in India?

In India, every person who has an annual income of more than Rs. 2,50,000 is required to file an Income Tax Return (ITR). This includes income from salaries, pensions, interest and dividends, capital gains, business or profession, and other sources. The due date for filing ITR is July 31, and taxpayers who fail to file their return by this date may be liable for a late filing fee of Rs. 5,000. In addition, taxpayers who have a total income of more than Rs. 5,00,000 are required to pay advance tax on their income. Advance tax is payable in three installments: June 15 (15% of tax liability), September 15 (45% of tax liability), and December 15 (75% of tax liability). Taxpayers who fail to pay advance tax may be liable for interest charges. Finally, taxpayers who have filed their ITR but have not paid the full amount of tax due may be required to pay interest on the outstanding amount. Interest is charged at the rate of 1% per month from the due date until the date of payment. In conclusion, any person with an annual income of more than Rs. 2,50,000 is required to file an ITR.

3. How to file ITR in India online?

In India, the Income Tax Return (ITR) is a document that needs to be filed by individuals who have earned an income of more than Rs.5 lakh in a financial year. The last date to file ITR for the 2018-19 financial year is July 31, 2019. The process of filing ITR has been made easier and simpler by the introduction of e-filing. Individuals can now file their ITR online without having to visit the income tax office. Here’s a step-by-step guide on how to file ITR online:

  • Log in to the e-filing website of the Income Tax Department using your user ID and password. If you are a new user, you will need to register on the website first.
  • Once you are logged in, click on the ‘e-file’ tab and select ‘Income Tax Return’.
  • Select the relevant ITR form from the drop-down list. For example, if you are an individual with income from salary and interest, you will need to select ITR-1 ( Sahaj).
  • Fill in all the required details in the ITR form and cross-check them before moving to the next step.
  • Upload the required documents and click on the ‘Submit’ button.
  • Once your ITR is successfully filed, you will receive an acknowledgment number which can be used to track the status of your return.

4. Documents required for filing ITR

Documents required for filing Income Tax Return are: 1) A copy of last year’s return, if filed; 2) Form 16 or Form 16A issued by employer; 3) Proof of investments made during the financial year; 4) Bank statement/ passbook showing details of interest earned; 5) TDS certificate if any; 6) Rent receipts, if applicable; and 7) Any other relevant documents. All these documents should be submitted to the concerned authority while filing ITR. furnishing these documents will help in the easy and speedy processing of returns. Further, it will also avoid any kind of hassle or delay in getting a refund, if any. Therefore, it is advisable to submit all the relevant and required documents while filing ITR.

5. How to calculate income tax liability in India

There are two types of taxes in India: direct and indirect. Direct taxes are levied on an individual’s or organization’s income, while indirect taxes are levied on the sale of goods and services. Income tax is a direct tax that is levied on an individual’s or organization’s income. The income tax liability in India is calculated based on the following factors: (1) the taxpayer’s residential status; (2) the taxpayer’s age; (3) the type of income; (4) the rate of tax; and (5) the tax exemption and deduction limit. The Indian government has also introduced a new income tax slab for the financial year 2020-21. Under this new slab, individuals with an annual income of up to Rs 5 lakhs are exempted from paying any income tax.

6. Common mistakes while filing ITR

There are several common mistakes that people make while filing their income tax returns (ITR). Some of these errors can be easily avoided by taking a few simple precautions. Here are some of the most common ITR filing mistakes:

  • Not declaring all sources of income: It is important to declare all sources of income, regardless of whether they are taxable or not. Non-disclosure of income can lead to penalties and interest charges.
  • Incorrectly calculating deductions and exemptions: Make sure you correctly calculate deductions and exemptions before claiming them on your return. This will help you avoid underpaying or overpaying taxes.
  • Filing under the wrong ITR form: Be sure to file your return using the correct ITR form. Incorrectly using a form can result in a mismatch of information and may lead to processing delays.
  • forgetting to attach supporting documents: Remember to attach all relevant supporting documents with your ITR, such as Form 16, bank statements, and investment proofs. Failure to do so can lead to problems during processing.
  • By taking a few simple steps, you can avoid making these common mistakes while filing your ITR. By doing so, you can ensure a smooth and hassle

Conclusion paragraph: We hope this guide helped demystify the process of filing your ITR


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