How to file ITR? Steps to e-File Income Tax Return Online
Filing income tax returns enables an individual to annually declare his earnings, investments, tax liabilities etc., in one place. Apart from record-keeping your tax history, income tax returns are often required while applying for a loan or as proof of income.
Many people might believe that filing income tax returns is a cumbersome process or requires hiring of experts. However, the whole process of income tax filing can be a lot easier if you choose to e-file your tax returns.
Difference Between Financial Year and Assessment Year
- Financial Year
The Financial Year (FY) is the period of one year starting from April and ending with March next year. All your earnings during this period are considered your total earnings in that financial year.
- Assessment Year
The Assessment Year (AY) is the year following the financial year. All your earnings in a financial year are evaluated and taxed accordingly in the assessment year.
Simply put, you pay taxes in the following assessment year for the income earned in the financial year.
For example, suppose that you have earned Rs 10 lakhs in FY 2020-21, on which you need to pay income tax at the rate of 20 per cent. The tax authorities will assess your tax liabilities in the following year, which is AY2021-22, and you will pay the required tax in AY 2021-22 for your earnings in FY 2020-21.
Prerequisites Before e-Filing Tax Returns
There are certain prerequisites that are needed to be fulfilled before you can proceed with e-filing ITR.
- Linking of Aadhar & PAN
The government has now made it mandatory to link your PAN with your Aadhar. If you haven’t done it yet, you need to complete the linking before March 31, 2022.
- Linking Bank Account
You need to link your bank account with your PAN. This is necessary because any income tax refund will be credited to the linked bank account.
- Register Mobile Number
You need to link your mobile number with your PAN. You should register the same mobile number that is registered with your AADHAR to avoid any confusion.
How to File IT Return Online
- Visit the new income tax portal.
- Log in using your PAN and Password.
- Go to ‘Income Tax Return’ under the ‘e-File’ tab.
- Select ‘File Income Tax Return’.
- Select Assessment Year.
- Select the online Mode of Filing and press ‘Continue’.
- Select the status applicable for you (individual, HUF, others).
- Select the proper ITR form.
- Fill in your bank account details or pre-validate them if already provided.
- You will now be asked to file your IT returns in the new online form. Many fields will be pre-filled. You should check the pre-filled details.
- Submit the form and verify. You can now e-verify your returns using your Aadhar.
- If you have chosen e-verification, then the process ends here. However, if you choose manual verification, then you need to take the printout of the ITR and send the hard copy to the IT department.
Once you can complete income tax filing on your own, you can do it in the future as well. Alternatively, you can always hire an expert to do the filing on your behalf if you don’t feel like doing it yourself or you think you need a professional’s intervention or guidance.