Steps to follow while filing income tax returns

Steps to follow while filing Income tax Returns


How to file income tax return online step by step

Filing income tax returns online step by step below:

1. Create login –

The taxpayers have to create their login on the website of the Income Tax Department for e-filing, if not already created.

2. Allocating the Documents –

The foremost thing before filing an income tax return is to allocate all the relevant documents as details of such documents will be furnished at the time of filing returns. Important documents for filing Income tax returns are as under:

Aadhar Card & Pan Card –

These are the two most important documents and one should be handy with them at the time of filing of Income-tax return. Aadhar card is use to provide the enrollment identity and generate a one-time password (OTP) while the PAN card is the identity proof of the registered payer.

Salary Slips –

For salaried assessee, it is important to have their salary slips.

Form 16 –

This is the most important form require at the time of filing return. It is a TDS certificate issued to a salaried employee by the employer providing details of the taxes paid on the employee’s behalf.

Form-16A/Form-16B/Form-16C –

  • Form 16A – This form is applicable in case when TDS is deducted by someone ‘other’ than the employer such as any bank or institution deducting TDS against the income earned from fixed deposits, interest, or commission, etc. by assessee.
  • Form 16B – If assessee has sold a property, then the buyer will issue him Form 16B showing the TDS deducted on the amount paid to assessee.
  • Form 16C – “If assessee is landlord earning rental income, then assessee needs to ask his tenant to provide Form16C for providing the details of TDS deducted on the rent received by assessee.

Form 26 AS –

It is an annual tax statement representing details of all the taxes being deducted by any deductor. Form 26AS  mainly includes:

  • TDS deducted by the employer,
  • TDS deducted by any other organization for the payments that have been made to assessee during the relevant year,
  • TDS deducted by banks if the interest income in FY 2019 – 20 exceeds Rs 40,000,
  • Advance taxes deposited by assessee during the FY 2019-20,
  • Self-assessment taxes paid by assessee.

Capital Gain –

If any income is earned by the sale of the property, or any investment done in mutual funds, equity shares, etc. assessee is liable for capital gains. To compute capital gains on the sale of mutual funds and/or shares, assessee would require statements from mutual fund houses and/or brokers.

In case of capital gains either long-term or short-term, on sale of house property, land, or building assessee would require the purchase deed and sale deed of the said property. ”

Interest certificates from banks and post office –

Interest received from a savings bank account, post office savings account, fixed deposits, and recurring deposits are taxable. Therefore, assessee should get the interest certificates from the banks and post office branch, if any to know the total interest earned. In case no TDS has been deducted.

** Any interest from the savings bank account and post office savings account received above Rs 10,000 will be chargeable to tax.

Home Loan Statements from Banks –

Assessee to provide the statement of the loans taken against buying a house. It will reflect the break-up details of how much principal and interest have been repaid by assessee during the year. Section 24 of the Income-tax Act, 1961 provides a deduction of interest repaid on the home loan for which the maximum amount can be claimed is of Rs 2 lakh. Deduction of the principal amount repaid will allowable under section 8C of the Income-tax Act, 1961.

Deductions under section 80C to 80U –

The maximum tax-break you assessee can claim under sections 80C, 80CCC, and 80CCD(1)can not exceed Rs 1.5 lakh in a financial year. The most common tax breaks under section 80C are as follows:

a) Employees Provident Fund (EPF)

b) Public Provident Fund (PPF)

c) Investments in ELSS schemes of mutual funds

d) Life insurance premium

Apart from the above sections, assessee can also claim deductions under different sections of the Income-tax Act. For example, the health insurance premium paid in the FY 2019 – 20 is eligible for deduction under section 80D of the Act for a maximum up to Rs 25,000 or 50,000as per applicability in a year. 

3. Compute total taxable income for the financial year-

Once assessee has all the documents require and verified all the taxes that are deducted from his income; assessee has to compute the total income chargeable to tax.  

Total income is computed by adding incomes from five different heads and claiming all the relevant deductions allowed under the Income-Tax Act and setting off losses if any.

4. Computing the tax liability–

The assessee has to compute his gross taxable income by applying the tax rates in force for FY 2019 – 20 as per his income slab. After calculating the tax amount already paid via TDS, the advance tax assesee will calculate his balance tax liability or refund. If any tax is payable, the assesee has to pay balance tax as a self-assessment tax for the relevant year.

5. File income tax return after selecting the Correct ITR Form –

Once taxes, if any due, are paid by assessee he can start the process to file your ITR. There are SEVEN different types of ITR forms available with respect to different categories of taxpayers and its income. The taxpayers have to select the relevant for them. If assessee wants to claim any refund from the tax department, then also he has to file ITR for claiming such a refund.

6. Validate the Return –

Lastly, after the successful submission of the ITR forms, its verification is required. There are 6 ways to verify ITR, out of which 5 are electronic methods and one is physical verification.

If assessee wants to verify his tax – return electronically, he won’t be required to send any documents to the tax department. However, if assessee wish to verify his return physically, then he will be required to send a duly signed copy of ITR-V/Acknowledgement to ‘CPC, Post Box no. 1, Electronic City Post Office, Bangalore- 560100.

After filing of ITR, assessee has 120 days to verify it. If assessee does not verify his ITR, then it will be deemed as he has not filed ITR.

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Income Tax Return (ITR)

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