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    How to file ITR: Step by Step guide

    Synopsis

    An individual must file his/her tax return before the deadline, or else he/she will be liable to pay late filing fees of Rs 5,000. Further, certain types of losses will not be allowed to be carried forward, if the tax return is filed after the deadline.

    ITR filing guide: Red flags to avoid while filing tax return
    The last date to file income tax return (ITR) for FY 2020-21 is December 31, 2021. Though the penalty for filing ITR after deadline has been reduced by half, i.e., to Rs 5,000, it is important to file ITR before the expiry of the deadline to avoid missing out other benefits such as carry forward of losses etc.

    Also Read: ITR filing deadline extended to December 31, 2021

    Also read: How to file ITR? Here's the complete guide

    If you are yet to file your ITR, here is a step-by-step guide on how to e-file your ITR. Do make sure that before you start the ITR filing process, you have registered on the government's newly launched e-filing website.

    Also Read: How to register on new income tax portal for filing ITR

    Step-by-step guide to file your income tax return (ITR):
    1. Collect required documents such as TDS certificates (Form16/16A), capital gains statement
    The first step is to collect all the documents you will need to file your ITR such as Form 16, salary slips, and interest certificates etc. The documents will help you compute your gross taxable income and will provide you with the details of tax deducted at source (TDS) from your income in FY 2020-21.

    Also Read: 9 documents you need to file ITR

    Form 16 is a TDS certificate given by your employer if tax is deducted from your salary income. Similarly, your bank is required to issue Form-16A for TDS deducted on interest payment to you on fixed deposits. Ensure that all the TDS certificates received by you from all the deductors are in the TRACES format.

    Also Read: What you should check in Form 16 while filing ITR

    Also Read: How to deal with 2 Form 16s to file ITR

    Also Read: How SBI account holders can download Form 16A

    Also Read: How HDFC Bank account holders can download Form 16A

    Also Read: How ICICI Bank account holders can download Form 16A

    Also Read: How PNB account holders can download Form 16A

    TDS certificate received by you should be digitally signed. They will bear a checkmark indicating that the signature is verified. Non-verified signatures on the TDS certificate will have a question mark over it. You will be required to verify it.

    Also Read: How to validate signature in Form 16

    Similarly, if you have redeemed mutual fund units in FY 2020-21, you can ask the mutual fund to provide the transaction statement and capital gains statement for the same.

    Also Read: How to file ITR without Form-16

    2. Download and check Form 26AS and/or AIS
    This year the income tax department launched the Annual Information Statement (AIS) which informs taxpayers of the different financial transactions that were undertaken by him/her during the FY. However, since it has just been launched, there changes that there might be errors in the AIS. As per the tax department, if there are any errors in the AIS, then Form 26AS can be used to file ITR.

    Also Read: What is AIS and how to download it

    Also Read: All financial transactions that income tax department knows about it

    Also Read: How to get errors in Annual Information Statement corrected

    Form 26AS is like a tax passbook which consists of all the details of the tax that has been deducted from your income during the FY 2020-21 and deposited against your PAN. You must cross-check your TDS certificates with Form 26AS to ensure that tax deducted from your incomes such as salary, interest etc. is deposited with the government and against your PAN.

    Also Read: How to download Form 26AS

    Also Read: Why Form 26AS is important in ITR filing

    3. Rectify the errors in Form 26AS, if any
    If the amounts shown in the TDS certificates (Form-16, Form-16A etc.) and Form 26AS do not match, then you must take up the matter with your deductor to get the errors rectified. The deductor can be your employer, bank or others and request him to correct the details.

    Also Read: How to get errors in Form 26AS corrected

    If the error is not rectified, then you will not be able to claim the credit on that tax which is deducted. Chartered accountants advise that one should keep track of your Form 26AS during the financial year to avoid any discrepancies at the time of filing ITR. This year due to errors in the new income tax portal, it is not taking full TDS credit available in Form 26AS into account at the time of filing ITR.

    Also Read: Errors in new income tax portal reduces income tax refund

    If your TDS is deducted but not deposited with the government and your deductor is not paying heed to your complaints, then the Central Board of Direct Taxes (CBDT) has issued certain circulars regarding the same. The circulars state that income tax officers must not harass the deductee.

    4. Compute total income for the financial year
    Once you have collected all the documents needed and verified all the taxes that are deducted from your income, you are required 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.

    Also Read: How to compute total taxable income to file ITR

    Deductions can be claimed provided the old income tax regime is opted for at the time of filing ITR. However, if an individual opts for a new tax regime, then common deductions and tax exemptions cannot be claimed.

    Also Read: New vs Old income tax regime

    5. Compute your tax liability
    This year an individual taxpayer has the option to either continue with the old tax regime or opt for the new tax regime. After computing your total income, you must calculate your tax liability by applying the tax rates in force for FY 2020-21 as per your income slab. This will be calculated depending on the tax regime opted for by the individual.

    Also Read: Here are the latest income tax slabs and rates

    Also Read: Use our income tax calculator to compute your tax liability

    6. Calculate final tax payable, if any
    Once you have computed your tax liability in the earlier step, deduct the taxes that have been already paid by you through TDS, TCS and Advance Tax during the year. Add interest, if any, payable under sections 234A, 234B and 234C. Remember this year, if your self-assessment tax-liability is more than Rs 1 lakh and you have not paid the same before July 31, 2021, then penal interest will be levied.

    Also Read: Delay in ITR filing can cost these taxpayers 1% extra

    Also Read: How to correct mistakes made at the time of paying taxes

    This will tell you if all the taxes are already paid by you or any additional tax has to be paid or if you have paid any excess taxes and a refund is due to you.

    7. File income tax return after all taxes are paid
    Once taxes, if any due, are paid by you, you can start the process to file your ITR. If you want to claim any refund from the tax department, you can do so only if you file your ITR. Therefore, you will have to file your ITR even if you are not mandatorily required to do so as per rules. While filing your ITR ensure that you are using the correct ITR form to file it. If you file your ITR using the wrong form, then it will be termed as a defective return and you will be required to file it again.

    Also Read: Senior Citizens aged 75 years and above are not exempted from ITR filing this year

    Also Read: Which ITR form is applicable to you for FY 2020-21

    Also Read: How to claim income tax refund

    The income tax department notifies ITR forms for every assessment year. Assessment year is the year immediately following the financial year for which the return is to be filed. For FY 2020-21, the assessment year is 2020-21.

    Also Read: How to file ITR-1

    Also Read: How to report excess EPF, NPS contribution in ITR

    Also Read: DIY ITR filers don't forget to report these incomes, assets

    Also Read: How to claim LTC Cash Voucher while filing ITR

    Also Read: How to file ITR of a deceased person

    Also Read: How to file ITR-2 with salary incomes, capital gains

    Also Read: How to report cryptocurrency gains, losses in ITR

    Also Read: Forgot to submit LTC Cash Voucher Scheme bills? Here's help

    Also Read: How to claim HRA while filing ITR

    8. Verification of ITR
    The last step of the ITR filing process is verification. There are 6 ways to verify your ITR. Out of this, 5 are electronic methods and one is physical verification. If you want to verify your tax-return electronically, you will not be required to send any documents to the tax department. However, if you wish to verify your return physically, then you 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, Karnataka, India.'

    Remember after you file your ITR, you have 120 days to verify it. If you do not verify your ITR, then it will be deemed as you have not file ITR. In case you forget to verify your ITR before the deadline, you can file a request to your assessing officer.

    Also Read: 6 ways to verify your ITR

    Also Read: Forgot to verify ITR? Here's help

    Also Read: How to check ITR-V status

    9. E-verification acknowledgement
    If you verify your ITR using an electronic method, then you will immediately receive confirmation from the tax department regarding verification of your ITR. If you have sent ITR-V via post to the I-T department, they will send you an email confirming that your ITR-V has been received by the I-T department, i.e., your return stands verified. The email will be sent to the email address you have registered in your e-filing account on the income tax department's e-filing website.

    Also Read: How to check your ITR status

    10. IT department will process return after verification
    After the return is verified, either via e-verification or physically, the income tax department will start processing your tax return to ensure that all the details filled by you are correct as per the Income Tax Act and also cross-check the details filled by you with other data available with it.

    Once the return is processed, the I-T department communicates the same to you via email to your registered email ID. In case any discrepancies are found, they may ask you to explain further or correct the mistakes made while filing the original ITR.

    Also Read: How to read intimation notice from tax department

    Also Read: Not received intimation notice? Here's help

    Also Read: ITR not processed? Here's what you can do

    Also Read: How to check income tax refund status

    Also Read: How to respond to income tax notice online

    Also Read: Income tax refund of this amount will not be paid

    Also Read: How to correct mistakes made while filing ITR
    ( Originally published on Jun 27, 2019 )

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