Income Tax E Filing

Efiling Income Tax Online 2018-19

Income tax is a form of direct tax, levied by the Government of India on both residential and non-residential Indians. Individuals earning over Rs. 2.5 Lakh/annum are liable to pay income tax, usually within August 31 of the corresponding year.

Income tax filing used to be a lengthy process, involving several steps of documentation and verification. Thankfully, with the introduction of world wide web, e-filing systems have become significantly popular, streamlining the entire process and helping a taxpayer pay minimum time penalty for an accurate IT filing.

Every single taxpayer (including organizations, firms, societies, etc.) are eligible for e filing of income tax returns. Special provision is reserved for super senior citizens (individuals older than 80 years of age), who can file their IT in either paper or online format.

The entire process is simple and minimum time-consuming. Let’s take a look at how to complete online return filing for income tax.

How to File Income Tax Returns Online

An individual willing to complete income tax e filing in India should be a registered user in the official website of Income Tax Department, India. New users will have to go through the registration process, after which they can follow the steps mentioned below.

  • Gathering necessary documents – 

A taxpayer will have to calculate their gross taxable income and Tax Deducted at Source (TDS) to complete income tax filing in India. To computer the same, certain documents like Form 16, salary slips, interest certificates, etc. will be required.

Documents such as Form 16 is necessary to calculate TDS, as it acts as a TDS certificate provided by one’s employer if they pay income tax return on their salary. Financial institutions like banks also issue Form 16A if a taxpayer pay TDS on interest earned on saving schemes like a fixed deposit.

If someone wants to lower their tax liability, yet want to earn a good return on their invested amount, they can invest in tax saving Mutual Funds as an alternative to fixed deposits. MFs like equity-linked savings scheme are ideal tax-saving instruments, as it can lower one’s tax liability by almost Rs. 1,50,000 in accordance with Section 80C of the Income Tax Act, 1961. Its details will also reflect in Form 16.

The TDS certificates should be digitally signed, with the TDS deductions presented in TRACES format. Individuals earning profit by selling mutual funds will have to submit the transaction statement as well as capital gains statement to prove the same.

  • Downloading Form 26AS – 

Form 26AS carries a detailed calculation of all the fields that incurred taxes during a certain financial year. It is deposited against one’s PAN card, and available in the TRACES website. It can be downloaded by navigating to the ‘My Account’ section and selecting ‘View Form 26AS’.

Every taxpayer should carefully check their Certificate for Tax Deducted at Source against Form 26AS while e filing of income tax. It will ensure that all the taxes collected from their salary, income from interest, etc. has been duly paid to the Government of India, and has been logged against their PAN. They must also check whether all the values displayed in the TDS certificate and Form 26AS matches with each other; otherwise they will not be able to claim the input tax credit on the total tax deducted.

  • Calculating total income and tax liability – 

After collecting both income proofs and TDS certificate, one has to determine the total taxable income and their tax liability. This contains two different steps; first, a taxpayer will have to calculate their taxable income by adding profit earned from 5 different heads. These are the following –

Head of income Nature of income
Income from salary Regular source of finance earned from salary or pension
Income from other sources Source of finance earned from investments such as FD, savings account interest, etc.
Income from residential property Funds earned from renting a property
Income from capital gain Funds earned by selling capital assets such as Mutual Funds, Shares, residential properties, etc.
Income from business Source of finance earned by businessmen and other self-employed individuals.

All these details are mentioned in the Form 16.

After determining the total taxable income, a taxpayer can calculate their tax liability before proceeding with income tax online filing. It varies between individuals with different annual income, for example, a taxpayer earning Rs. 2.5 Lakh per annum will be exempted from income tax, whereas individuals earning a minimum of Rs. 2.5 Lakh to a maximum of Rs. 5 Lakh will have to pay 5% tax and 4% cess. Taxpayers earning Rs. 5 Lakh to Rs. 10 Lakh will have to pay Rs. 12,500 with 20% income tax and 4% cess. Income above Rs. 10 Lakh will be liable to pay 30% income tax with 4% cess, and Rs. 1,12,500. All the taxes will be calculated on a compounding basis.

Deducting duties like TDS, TCS, and advance tax (which should be already levied throughout the year) from the computed tax liability will determine the exact amount of income tax an individual will have to pay.

  • Income tax e filing India – 

A taxpayer can file their IT returns after clearing the due amount, which should reflect in Form 26AS within 2 to 3 working days online. Electronic verification does not require sending any document to support the claim, ensuring a hassle-free process.

Income Tax Department releases ITR forms for every assessment year. E filing of income tax should be done by duly submitting the same within the due date.

  • Verification – 

After paying the total due amount, a taxpayer will have to verify his or her tax returns within 120 days (failing to do so will be deemed as not filing income tax returns.) The entire process can be completed online; the taxpayer will be sent an email confirming that their ITR has been received after successful income tax filing in India. After the verification is complete, the returns will be processed against the tax paid.

Online filing of income tax in India offers a time-saving and hassle-free method for taxpayers across the nation.


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