Learn to file income tax returns independently. From gathering documents to filing returns, we’ve got your back!
Let’s face it – the idea of filing income tax returns can be daunting. But with proper guidance, it’s far less intimidating than it appears.
Whether you’re a nine-to-fiver, a freelancer hustling on your own terms, or a business owner, understanding the process puts you in the driver’s seat of your financial journey. In this guide, we will walk you through each step of filing your income tax returns independently in India.
Step 1: Gather the necessary documents
Collect all the necessary documents that serve as the foundation of your tax return. Let’s look through the essential documents you need to have at your fingertips before commencing the filing process:
- PAN (Permanent Account Number) card
- Aadhaar card
- Bank statements
- Form 16 (for salaried individuals)
- TDS certificates
- Details of investments and expenses for deductions
Step 2: Choose the right form
Once you have gathered all the necessary documents, the next step is to select the appropriate income tax return (ITR) form based on your income sources and financial activities. The Income Tax Department provides various ITR forms catering to different taxpayer categories and income profiles. Here’s a brief overview of the commonly used ITR forms:
- ITR-1 (Sahaj) is for individuals being a resident (other than not ordinarily resident) having total income up to Rs.50 lakh, having Income from salary, one house property, other sources (Interest etc.), and agricultural income up to Rs.5,000.
- ITR-2 is for individuals and Hindu Unified Families (HUFs) with income from sources other than business or profession
- ITR-3 is for individuals and HUFs having income from business or profession
- ITR-4 (Sugam) is for Individuals, HUFs and Firms (other than Limited Liability Partnership (LLP)) being a resident having total income up to Rs.50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE and agricultural income up to Rs.5,000.
Step 3: Register on the Income Tax e-filing portal
Registering on the Income Tax Department’s e-filing portal is a straightforward process.
- Visit the Income tax portal.
- Click on the ‘Register Yourself’ option if you haven’t already created an account.
- Follow the prompts to enter your PAN and basic details to set up a password.
- Once registered, you’ll have access to various services offered by the portal.
Step 4: Verify your Aadhaar
Verifying your Aadhaar with your PAN is mandatory for filing income tax returns on the e-filing portal.
- After logging in to your account, navigate to the ‘Profile Settings’ or ‘Profile’ tab.
- Select ‘Link Aadhaar’.
- Follow the instructions to enter your Aadhaar number.
- Complete the verification process. This ensures seamless e-verification of your tax return.
Step 5: Determine your Tax Filing Status
Choose between individual, Hindu Undivided Family (HUF), or firm/LLP based on your entity type as per the Income Tax Act, 1961.
- Individual: A natural person, major or minor, covered under Section 2(31) of the Income Tax Act, 1961.
- Hindu Undivided Family (HUF): A family of all persons lineally descended from a common ancestor, taxed separately under the Act with its own PAN.
- Firm/LLP: A partnership or Limited Liability Partnership (LLP) as defined by the Indian Partnership Act, 1932, and Limited Liability Partnership Act, 2008, respectively.
Step 6: Select the Suitable ITR Form
Decide whether to use ITR 1 (for individuals) or ITR 4 (for individuals and HUFs with presumptive income), depending on your sources of income and deductions.
- ITR 1: For individuals with income from salary/pension, house property, and other sources, requiring basic details, income, deductions, and tax paid.
- ITR 4: For individuals and HUFs with presumptive income, requiring additional disclosures along with personal information, income, deductions, tax paid, and tax liability.
Step 7: Complete the Relevant Sections in the ITR Form
- If using ITR 1, fill in the five sections for Personal Information, Gross Total Income, Total Deductions, Tax Paid, and Total Tax Liability.
Personal Information: Basic details like full name, PAN, Aadhaar number, contact details, and bank account details.
Gross Total Income: Income from salary/pension, house property, and other sources, with details of exempt income if any.
Total Deductions: Claim deductions under various sections, such as 80C, 80D, 80TTA, and 80TTB.
Tax Paid: Reflect tax paid from all sources, including TDS, TCS, advance tax, and self-assessment tax.
Total Tax Liability: Calculate tax liability based on income, deductions, and tax paid.
- If using ITR 4, fill in the six sections for Personal Information, Gross Total Income, Disclosures, Total Deductions, Taxes Paid, and Total Tax Liability.
Disclosures: Required for individuals with taxable income exceeding INR 50 lakh in the financial year, where all assets must be disclosed in the income tax return.
Step 8: Verify ITR
After you file your return, you must verify it to ensure its authenticity. You can verify your return using one of the available options:
- Aadhaar OTP, Electronic Verification Code (EVC), or
- By sending the signed ITR-V (acknowledgment) to CPC Bengaluru.
Choose the most convenient method for you and complete the verification process.
Step 9: Maintain Records
Retain a copy of the filed return and all supporting documents for future reference. This includes documents such as:
- Form 16
- TDS certificates
- Investment proofs and other relevant records
Keeping meticulous records will be invaluable in case of any queries, discrepancies, or audits by the tax authorities. Organising your financial documents ensures smooth compliance with tax regulations.
Conclusion
Navigating the process of filing income tax returns independently isn’t just about ticking off boxes—it’s a journey towards financial empowerment. With guidance from the Income Tax Department and the resources at your disposal, you have the power to handle your tax responsibilities effectively.
With these simple steps, filing your income tax returns independently in India is easier than ever. But if you still need extra help or guidance, Geojit is here for you every step of the way.
Just visit our website and let us help you navigate the complexities of tax season with ease. From expert advice to handy tools and resources, we have everything you need to conquer your taxes and take charge of your financial future.
