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ITR Filing Process | Simplified Guide for Taxpayers

by | Jan 23, 2025 | Income Tax, Income Tax Knowledge | 0 comments

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The Complete Guide to the ITR Filing Process 

Filing your Income Tax Return (ITR) is an essential step in managing your finances, ensuring legal compliance, and avoiding any penalties. The ITR filing process not only allows you to declare your income to the government but also ensures you are paying the correct amount of tax based on your earnings. For individuals, businesses, and professionals alike, timely filing is crucial for staying on top of tax regulations and taking full advantage of tax-saving opportunities.

The ITR filing process may seem overwhelming at first, especially if you’re a first-time filer. However, once you understand the income tax return steps, it becomes much easier. The online ITR filing method has made things more convenient for taxpayers, enabling them to file their returns from the comfort of their homes. Tools like Finodha can assist with the entire filing process, ensuring that your returns are accurate, compliant, and submitted on time.

In this comprehensive guide, we’ll walk you through each step of the ITR filing process for the Financial Year 2023-24. Whether you’re filing for the first time or need a refresher, this article will help you navigate the complexities of ITR filing effortlessly.

What is ITR Filing?

ITR filing is the process through which an individual or a business submits a detailed statement of their annual income to the Income Tax Department. By doing so, they report their total earnings for a particular year and determine the tax they owe based on their income. The main purpose of ITR filing is to ensure tax compliance and transparency, while also making individuals eligible for refunds if they’ve overpaid taxes throughout the year.

Assessment Year vs. Financial Year

In the ITR filing process, it’s essential to differentiate between the Assessment Year (AY) and Financial Year (FY):

  • Financial Year (FY): This refers to the year in which you earn your income. For example, FY 2023-24 spans from April 1, 2023, to March 31, 2024.
  • Assessment Year (AY): The year immediately following the FY in which your income is assessed, and taxes are calculated. For FY 2023-24, the Assessment Year will be 2024-25.

Who Needs to File an ITR?

While many individuals think ITR filing is only necessary for high-income earners, that’s not the case. Here are some scenarios in which filing an ITR is mandatory:

  • If your income exceeds ₹2.5 lakh (for individuals under 60 years).
  • If you receive income from multiple sources such as salary, rental income, capital gains, or business profits.
  • If you are a self-employed professional or business owner.
  • If you want to claim a refund for excess taxes paid during the year.
  • If you want to carry forward business losses or set off losses against future income.

Key Steps in the ITR Filing Process

The ITR filing process involves several key steps that need to be followed in a specific order to ensure accurate and timely submission. Let’s break down these steps in detail.

Step 1: Gather Necessary Documents

Before you begin the ITR filing process, it’s essential to gather the required documents. These documents serve as the foundation for your filing and ensure that the data you provide is accurate:

  • PAN Card: The Permanent Account Number is mandatory for ITR filing. It helps track your tax payments and filings.
  • Aadhaar Card: Linked with PAN for verification and compliance.
  • Form 16: Issued by your employer, detailing your salary and tax deductions.
  • Bank Statements: These show your interest income and help report any other income earned from your savings accounts or fixed deposits.
  • Investment Proofs: If you’ve invested in PPF, insurance premiums, or other tax-saving instruments, keep proof of these investments for claiming deductions under Section 80C.
  • Capital Gains Statements: If you’ve sold any assets like property or stocks, make sure you have the relevant documents to calculate the capital gains.

Step 2: Understand Your Income Sources

It’s important to understand all the different sources of income you may have before proceeding with the ITR filing process:

  • Salary: Income received from your employer after tax deductions (Form 16).
  • House Rent: If you own a property and earn rental income, this needs to be reported under “Income from House Property.”
  • Capital Gains: Profit earned from selling assets like property, mutual funds, or shares.
  • Business Income: Income from running a business, including freelancing, consultancy, or any other form of self-employment. By accurately understanding your income sources, you’ll be able to select the correct ITR form and avoid mistakes in your filing.

Step 3: Choose the Correct ITR Form

Choosing the right ITR form is one of the most important steps in the ITR filing process. There are several forms to choose from, each designed for different categories of taxpayers:

  • ITR-1 (Sahaj): For salaried individuals with an income of up to ₹50 lakh and income from salary, house property, and other sources.
  • ITR-2: For individuals who have income from multiple sources like salary, capital gains, or income from business.
  • ITR-3: For self-employed individuals or professionals with income from business or profession.
  • ITR-4 (Sugam): For individuals opting for the presumptive taxation scheme (e.g., small businesses or professionals with income up to ₹50 lakh). Selecting the correct form is crucial as it directly affects the accuracy of your tax filing.

Step 4: Register on the Income Tax E-filing Portal

In order to complete the ITR filing process, you need to register on the Income Tax Department’s official e-filing portal. Once registered, you’ll be able to upload your ITR and check the status of your filing and refunds. You can access various services, including viewing past returns, tax payments, and rectifications. This online registration is essential for both individuals and businesses filing their returns.

Step 5: Pre-validate Bank Accounts for Refunds

Pre-validating your bank account details is crucial for quick and hassle-free refunds. Linking your bank account to your ITR filing profile ensures that any refund is directly deposited into your account, eliminating the need for checks or long processing times.

Step 6: Fill in the Details and Verify Information

This is one of the most critical steps in the ITR filing process. Fill in all the relevant details carefully, ensuring there are no discrepancies. This includes income from all sources, tax deductions, and any exemptions you may claim. Double-check the information, especially PAN, Aadhaar, and bank account details to avoid errors.

Step 7: Submit and E-verify Your ITR

Once all the information is entered, you can submit your ITR for processing. After submission, it’s essential to e-verify your ITR either through OTP on your registered mobile number or using Aadhaar OTP for faster processing. Without e-verification, your ITR filing will not be complete, and your return won’t be accepted by the tax authorities.

Online ITR Filing Made Easy

Gone are the days when filing taxes required visiting offices or hiring an accountant. The online ITR filing process has transformed how taxpayers file their returns, providing an easier, more convenient, and error-free approach to tax compliance.

Advantages of Online Filing

Here are some of the key advantages of online ITR filing:

  • Convenience: File your taxes from anywhere, anytime, as long as you have an internet connection.
  • Faster Processing: Once submitted, your return is processed quickly, and you receive an acknowledgment almost immediately.
  • Quick Refunds: If you’re due for a refund, it will be processed faster when you file online.
  • Error-Free Filing: Online portals have built-in checks to avoid common mistakes like incorrect bank details or missing income.

Common Platforms for Online Filing

There are a few platforms available to make the ITR filing process even simpler:

  • Income Tax Department Portal: The official portal provides a step-by-step guide to filing your ITR.
  • Platforms like Finodha: These platforms are user-friendly and designed to guide you through the filing process, making the entire experience seamless. With tools like Finodha, even first-time filers can feel confident, thanks to the clear instructions and expert support provided.

Tax Filing Guide for First-Time Filers

If this is your first time filing taxes, you may feel overwhelmed by the ITR filing process. However, it doesn’t have to be daunting. Here’s a tax filing guide to ensure you get it right:

  • Start Early: Don’t wait until the last minute to file your return. Starting early ensures you have time to resolve any issues or discrepancies.
  • Understand Your Income Sources: List all your sources of income—salary, business, capital gains, etc. This helps you select the correct form and fill it out accurately.
  • Choose the Correct Form: First-time filers often get confused about which form to use. Read the instructions carefully and select the form that best matches your income situation.
  • Avoid Common Mistakes: Double-check your PAN, Aadhaar, and bank account details. Incorrect information will lead to delays or rejections.
  • Claim Deductions: Don’t forget to claim deductions available under various sections like 80C, 80D, etc. These can help reduce your taxable income.

Tax Deductions and Benefits

When filing your ITR, it’s essential to know the various deductions available to minimize your tax burden. Some common deductions under the Income Tax Act include:

  • Section 80C: Deductions for investments in PPF, ELSS, NPS, and life insurance premiums.
  • Section 80D: Deductions for health insurance premiums for self, family, and parents.
  • Section 24(b): Deductions for home loan interest. By filing your ITR, even if it’s not mandatory, you can enjoy various benefits such as tax refunds, eligibility for loans, and visa applications.

Why Choose Finodha for Your ITR Filing?

Filing your ITR doesn’t have to be complicated. With Finodha, you can streamline the entire process. From selecting the right form to getting expert assistance with tax deductions, Finodha ensures an efficient filing experience. Here’s why Finodha is a top choice:

  • Affordable Plans: Starting at ₹429, you get access to expert guidance and hassle-free filing.
  • Dedicated Support: Get help through calls, email, or WhatsApp.
  • Secure Data Handling: Your data is encrypted and securely managed, ensuring privacy and compliance.

Conclusion

The ITR filing process can be intimidating for first-time filers, but with the right guidance and tools, it becomes manageable. Remember, timely filing is not just about compliance—it can also bring financial benefits like tax refunds and eligibility for loans. Choose trusted platforms like Finodha to make your filing experience smooth and hassle-free.


Frequently Asked Questions (FAQs)

Q1. What is the process to file ITR?

The process includes gathering necessary documents, choosing the correct ITR form, registering on the Income Tax portal, entering your income details, and submitting the form. You must then e-verify the submission for it to be processed.

Q2. How to complete an ITR filing online?

Log in to the Income Tax Department’s portal or a third-party platform like Finodha. Select the form, fill in the required details, and submit the form. After submission, e-verify your return using OTP or Aadhaar for faster processing.

Q3. What happens if you miss the ITR deadline?

If you miss the deadline, you may incur penalties and interest charges. You can still file a belated return, but it will be subject to penalties.

Q4. How to revise an ITR?

If you’ve made an error in your filed return, you can revise it by submitting a revised return through the Income Tax Department portal before the end of the assessment year.

Q5. How can I claim a refund for excess taxes paid?

Refunds can be claimed through the ITR filing process by ensuring accurate tax payments and mentioning your bank details in the form. Once processed, the refund will be credited to your account.

Q6. Can I file ITR for multiple years together?

No, you must file returns for each year separately. However, you can file returns for previous years by submitting a belated return for each one.

Q7. What documents are required for ITR filing?

You will need your PAN, Aadhaar, Form 16, bank statements, proof of deductions, and any other relevant financial documents.

Q8. What is the penalty for incorrect ITR filing?

If there’s a mistake or incorrect claim in your ITR filing, the penalty could range from ₹5,000 to ₹50,000, depending on the nature of the error.


More Information: https://taxinformation.cbic.gov.in/

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