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HomeIncome TaxYour Step-by-Step Guide to Filing Income Tax Returns

Your Step-by-Step Guide to Filing Income Tax Returns [FY 2022-23]

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An income tax return is paid to the government and is reflected in your Form-16. If you are liable for advance tax, at least 90% of the payments must be made before the 31st of March or the end of FY 2022-23. 

According to the Income Tax Act of 1962, any individual whose income crosses the exemption limit, i.e. ₹2 Lakh according to the old tax regime and ₹3 Lakh according to the new tax regime, should file ITRs. If you satisfy the following criteria, you will have to file an ITR:

  • If you fall under the age of 59 and your annual income per year exceeds ₹2.5 Lakh.
  • If you wish to claim a refund and think an excessive amount of tax has been deducted or wrongly paid.
  • If you have foreign assets or are a signatory to a foreign account.
  • If you have foreign travel expenditures greater than ₹2 lakhs.

Did You Know? The government has introduced several measures, such as pre-filled Income Tax returns and electronic return verification.

What is Income Tax?

Income tax is a fixed rate on your total income paid to the government. The taxpayer pays this based on their total income. Income tax applies to individuals, HUF (Hindu Undivided Family), partnerships, companies, etc. The tax slabs are announced yearly by the government in its annual budget. 


Why Do You Need to File an ITR Online?

It is mandated by the income tax department of India to file an income tax return if a person’s income is above the exemption limit of 2.5 Lakh according to the old tax regime or above 3 Lakh according to the new tax regime. Moreover, an ITR is needed when applying for loans, applying for VISA, or even when applying for credit cards.

How to File ITR Online?

To learn how to file an Income Tax Return, you will first have to understand the components of income tax and how to fill them in. Employers deduct employees’ tax liability as TDS from their salaries. 

The filing date is the 31st of July of the assessment year 2023/24 and may get extended through IT Department notifications. You will be penalised for not filing the ITRs by the due date with a 5000 late fee.

Also Read: How to Verify Your Income Tax Return Online | Verify ITR

Types of IT Saving Under the Old/New Tax Regimes

Tax planning and online apps can help you learn how to file ITRs and tell you how to save income tax. The Income Tax Act of 1962 has certain exemptions and deductions. It will help you lower your total taxable income to save taxes.

Tax-saving heads and instruments are listed below.

1. Public Provident Fund (PPF)

You can invest in the government’s tax-saving instrument with a term of 15 years and a tax-free interest rate of 8%. Interest is credited every quarter. It is available at post offices and banks. 

2. ELSS Mutual Funds

You can invest in these funds with up to 80% equity and a lock-in tenure of 3 years. Returns are chargeable to tax at LTCG (Long Term Capital Gains) tax @ 10% when they exceed the 1 lakh exemption.

3. 5-Year Tax-Saver FDs

They carry 7 to 8% taxable interest and are allowed a total tax deduction of up to Rs 1.5 lakh.

4. EPF Payments

They are 12% of basic pay and are included under the total exemption limit of 1.5 lakh U/S 80C.

5. Tuition Fee Payments

Fees for dependent children are exempt from tax up to 1.5 lakhs per year.

6. Premiums on Life Insurance

They are tax-exempt for term/endowment insurance policies, ULIPs etc. when the cover amount exceeds ten times the premiums paid.

7. National Saving Certificate (NSC)

It has a 5-year maturity period and earns about an 8% fixed interest rate. It is part of the total exemption available under S80C.

8. NPS-National Pension System

It is accounted for u/s 80CCD and adds to the exemption limit of 1.5 lakhs. Such deductions exceed the U/S 80CCD(1B) exemption of 50,000.

9. SCSS

Seniors Citizens Scheme Savings: It has a 5-year term and is available post-60 years. The interest rate is 0.5 to 0.75% higher than normal and taxable.

10. SSY-Sukanya Samriddhi Yojana

Benefits investing parents with girls below ten years old. Its 21-year tenure provides tax-free interest and continues till the girl marries/reaches 18 years of age. 

11. Premiums on Health Insurance

It provides 25,000 deductions U/S 80D for health insurance premiums over and above insurance premium limits. The senior citizen’s limit is 50,000. Thus you can avail yourself up to 75,000 when paying premiums for yourself and senior citizens dependent on you.

12. NPS

National Pension System: The deductions available U/S 80CCD(1B) allow equity/ debt pension funds up to 50,000 as tax-exempt until 60 years. The U/S 80CCD (2) allows employees to claim deductions up to 10% of their salary and 14% if a government employee. 

13. Rent Deductions

Deductions are available when you pay rent, and they can be deducted up to 60,000 per year. If you get HRA, the whole amount can be deductible if you stay on rent. 

14. Repayments of a Home Loan

Repayment is available for the home loan principal amount and is exempt up to 1.5 lakhs.

Home Loan Interest deduction: Deduction is allowed up to 2 lakhs per year with an interest certificate from banks u/s 24 of the IT Act.

15. Charitable Donations

They have no upper limit. If donated to an NGO, 50% or up to 10% of adjusted total income is exempt when the NGOs have an 80G certificate.

16. Savings Account Interest

It is tax-deductible up to 10,000 per year U/S 80TTA. The exemption limit for senior citizens is 50,000, including FDs and SM account interest earned.

Also Read: What Are the Components of Income Tax Law in India?

How to File Income Tax?

ITR can be filed either in offline or online modes. How to file Income Tax Return is explained below.

Offline Mode 

1. Log in to the IT portal at https://www.incometax.gov.in/iec/foportal/. Move to the Downloads section and download the ITR form as a Java utility file.

2. Extract the files from the zipped file and save them offline to fill the form correctly, as explained below.

3. Install the utility via a .exe file and get the interface running. 

4. Once you click continue, you’ll be redirected to the Income Tax Returns page with three options. 

5. You can typically file your ITR, edit a previously filled ITR draft, import pre-filled data like PAN, Name, etc., and then start filling your returns.   

6. Save and validate as you move from form to form.

7. Once you click on file returns, you’ll be presented with three choices: 

  • Download any pre-filled data from the e-filling website, 
  • Import it from your local system, and then proceed, or 
  • Simply edit an already filled ITR draft.

8. Then, you need to enter PAN and assessment year. After filling in, you’ll be redirected to the login page. After logging in, you’ll find the pre-filled data. Now just click on file return.

9. Then select your status and ITR form applicable to you. After that, just click “Let’s get Started”,  confirm your return, and click ” Proceed.”

Online Mode

1. Log in to the IT e-filing portal using your PAN as the User ID and enter the password and captcha. You need to register if you are visiting it for the first time.

2. Choose the ” e-file ” tab and head to “file income tax return”.

3. Carefully complete the assessment year and ITR form and click “prepare and submit online”.

4. In the next step, you will be asked whether you wish to file your returns online or offline. It is recommended that you use the former method in this case.

5. File your income tax returns as an individual, Hindu Undivided Family (HUF), or another entity.

6. Select the income tax returns (ITRs) you wish to file. The ITR 2 can be filed by individuals and HUFs who do not have a business or professional income. Individuals may also choose ITR1 or ITR4, depending on their situation. Click on ‘Proceed with ITR1’ here.

7.  After that, you’ll need to cite a reason as to why you’re filling an ITR, so choose the right options.

8. If you’ve filed an ITR before, you can import the pre-filled data by selecting the details you want to be auto-filled.

9. Now match your applicable incomes with forms such as 26AS, AIS and Form 16, such as salaried income, capital gains, etc. 

10. Then calculate the tax to be paid and click “preview and submit”.

11. Click “submit” to upload your ITR and verify using OTP on an Aadhar-linked mobile/EVC through bank account details to verify the return.

12. If verification fails, send a physical copy to the Central Processing Centre-CPC.

How to View and Download ITR?

To view the ITR filed online and its acknowledgement in pdf format, just follow these steps:

1. Log into the IT portal https://www.incometax.gov.in/iec/foportal/ with your login ID and password.

2. Click Forms/Returns view.

3. Choose the assessment year and income tax returns to view the file of ITRs filed.

4. Click on the tab for the acknowledgement number or ITR-V for the ITRs required.

5. The ITR-V file can be opened and downloaded as a PDF file.

6. Choose the right return and FY from the dropdown boxes to file income tax. Ex: ITR1, ITR2 etc.

Also Read: All About Income Tax and Tds Password Format With Examples

Conclusion

Filing an IT return, online or offline, can be hectic if you aren’t a commerce person. But following the above steps can make it easy for you to file your ITR for the assessment year 2023-24 without any external aid. Moreover, it’s a simple job if one understands and does the filing process on time. Filing an Income Tax (IT) return is the process of reporting your income to the Income Tax Department of India and paying taxes on it, if applicable.

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