How To File An Income Tax Return (ITR) By Yourself: Explained!
Although filing your Income Tax Return (ITR) on your own can initially seem challenging, it can be a powerful and doable undertaking with the proper assistance and knowledge of the procedure. Knowing the process is essential for timely compliance as a responsible taxpayer in India. It lets you take charge of your finances and optimise your allowable deductions. This detailed guide will help you file your ITR on your own without the help of a professional throughout the entire procedure.
What is an Income Tax Return (ITR)?
An Income Tax Return (ITR) is a form that individuals or entities file with the tax authorities to report their income, expenses, and other financial details for a specific financial year. It helps determine the amount of tax that the filer owes or the refund they may be entitled to.
Key details in an ITR include:
- Income Sources: Includes wages, interest, dividends, capital gains, business profits, etc.
- Tax Deductions: Any eligible deductions or exemptions like education, medical expenses, and charitable contributions.
- Tax Paid or Refundable: The total tax due or a request for a refund if excess tax was paid.
Filing an ITR is essential for individuals whose income exceeds a certain threshold and for corporations, regardless of profitability. It helps ensure tax compliance and allows tax authorities to track income and tax liabilities effectively.
Steps to File an Income Tax Return (ITR)
1. Gather All of the Required Documents
You must gather all necessary documentation in one location before starting the ITR filing process. A more efficient filing process is ensured by gathering these in advance. What you’ll need is as follows:
1.1. Form 16
If you are employed, you must fill out this form. Your company provides it and includes information about your income and the Tax Deducted at Source (TDS) applied to it.
1.2. Form 26AS
This consolidated tax statement displays the tax credits linked to your PAN. It consists of your advance tax payment, TDS, and tax collected at the source.
1.3. Bank Statements
You must include interest income in your Income Tax Return if you have earnings from fixed deposits or savings bank accounts.
1.4. Proofs of Investment
Collect all investment receipts, including insurance premiums, mutual fund investments, Public Provident Fund (PPF) payments, and other transactions. These will support your claim for deductions under various sections, including 80C and 80D.
Having all this information at your fingertips reduces filing mistakes or delays.
2. Find the Right ITR Form
It’s essential to choose the appropriate form for your tax file. According to your tax status and sort of income, the Indian government provides the following forms:
-ITR-1 (Sahaj)
This form is intended for people whose combined income does not exceed ₹50 lakhs and who receive their income from interest income, one residence, and their salary. (Source)
-ITR-2
This is appropriate for people who have international assets, capital gains, or income from many properties.
-ITR-3
Those earning money from a business or profession must complete this form.
-ITR-4 (Sugam)
For those with an assumed income from a business or profession, this simplified form is intended for individuals, Hindu Undivided Families (HUFs), and firms (apart from LLPs). (Source)
3. Sign Up for the E-filing Portal of the Income Tax Department
You must first register on the official Income Tax Department e-filing portal to submit your Income tax return electronically. Here’s how to go about it:
- Visit the website for income tax e-filing.
- If you are a new user, click ‘Register Yourself.’ Current users only need their PAN as their User ID to log in.
- After filling in the necessary fields with your name, date of birth, and PAN, confirm your email and mobile number to finish the registration process.
You can use the portal to file your ITR after registering.
4. Begin the Filing Procedure
After logging into the portal, do the following actions:
- From the top menu, choose Income Tax Return by clicking on e-File.
- Select the relevant ‘Assessment Year.’ For example, your assessment year would be 2024–25 if you were filing your return for the financial year 2023–2024.
- Choose the online filing option.
- Select your filing status; based on your circumstances, it can be individual, HUF, or another type.
5. Add Your Income and Personal Information
Start entering your information, such as your PAN, Aadhaar number, and contact information, as soon as the form appears. Next, describe your sources of revenue in detail:
- For salaried workers, Form 16 is usually used to pre-fill the income details. However, you must confirm the integrity of these details.
- Enter all sources of income, such as interest from savings accounts, capital gains from shares or mutual funds, and rental income from your home.
- Add any freelancing or business/professional income, if applicable.
Precisely inputting these data ensures an accurate computation of your tax obligation.
6. Check the Pre-Filled Information
The fact that the system will pre-fill some information is one benefit of filing your ITR online. This information is taken from Form 16 and 26AS, which you previously filed. It is crucial to check this information thoroughly to ensure no inconsistencies. Typical fields to check are as follows:
- TDS information
- Verify these by comparing them with Forms 26AS and 16.
- Payroll Earnings
- Make sure it corresponds with the amounts on your Form 16 and payslips.
- Details of deduction
- Check that the deductions allowed under sections 80C, 80D, etc., are accurately shown.
7. Determine Your Tax Obligation
The portal will automatically compute your tax liability after entering your income and deductions. This calculation will indicate if you qualify for a refund or owe any more taxes. If you’d like, you can double-check this computation using your estimates.
If the computation indicates that more tax is due, you’ll be asked to use the e-Pay Tax service to make the necessary payments.
8. Pay Your Taxes, If Applicable
If the system shows that you have additional taxes due, pay them by following these steps:
- Select the relevant category, such as ‘Self Assessment Tax’, by clicking on e-Pay Tax.
- Use a debit card, net banking, or other available payment methods.
- After you’ve made the purchase, save the payment receipt (Challan) for your records. You will need to refer to it to complete your ITR.
9. Evaluate and Confirm Your Return
Previewing the form and ensuring all the information is correct before submitting your ITR is essential. Look for frequent mistakes such as:
- Missing or inaccurate PAN/Aadhaar data.
- Mistakes in the deductions or income figures.
- Incorrect TDS values about Form 16/26AS.
Once the preview meets your needs, move on to the completed submission.
10. Upload and Confirm Your Return
Your return is finished once it has been confirmed after it has been filed. One crucial phase is verification, which can be carried out in the following ways:
- Adhaar OTP
Input the One-Time Password to the phone number associated with your Aadhaar.
- Net Banking
You can use some banks’ e-verify feature on their online banking page.
- Send CPC Bengaluru an ITR-V.
If you cannot e-verify, you have 30 days to sign and mail a hard copy of the ITR-V acknowledgement to the Centralised Processing Centre (CPC) in Bengaluru.
11. Remind Yourself of Deadlines
Understanding the ITR filing deadlines is crucial:
- The deadline for individuals not the focus of a tax audit usually comes on July 31st of the assessment year.
- Penalties may apply if the deadline is missed; however, a late return may still be submitted before the assessment year ends, usually by December 31st. (Source)
- Ensure your return is filed on time to avoid fines and interest.
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Conclusion
In conclusion, It is possible and a financially empowering experience to file your income tax return on your own. Without the assistance of an accountant or tax expert, you can effectively complete the process with thorough planning and close attention to detail. You can ensure compliance with tax regulations and optimise your tax savings by being aware of the forms, organising the required paperwork, and using the government’s easy-to-use web portal.
Filing your ITR not only encourages improved money management but also keeps you updated on your rights and responsibilities regarding taxes. You are now equipped with the knowledge from this guide to file your tax returns accurately and confidently!
If you want to seek further guidance on taxes, visit our website: Innerwork Advisors
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