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Home Articles Steps to File Income Tax Returns

Steps to File Income Tax Returns

IndianMoney.com Research Team | Updated On Monday, July 29,2019, 02:49 PM

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Steps to File Income Tax Returns

 

 

The deadline for filing ITR which is August 31st 2019 is fast approaching. This is the date by which you have to file ITR for FY 2018-19. If you miss this deadline; you could end up paying Rs 10,000 penalty as late tax filing fees. It’s compulsory to file ITR online, but if you are a super senior citizen, (This is 80 years or above), you can file ITR in the paper format.

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Steps to file Income Tax Returns

If you want to file ITR electronically, you must first register on the income tax e-filing website. You then follow the steps given below and file the income tax returns.

1. First Collect Requisite Documents like Form 16 and Capital Gains Statements:

You must first collect all the documents needed to file ITR. This could be Form 16, salary slips and even the interest certificates. With these documents you may compute the gross taxable salary. You get details on TDS deducted from FY 2018-19 income.

Form 16 is nothing but the TDS certificate given by your employer. (This is if TDS is deducted from your salary). The bank gives Form 16A for TDS deducted on FD interest payments. Make sure TDS certificates received from deductors are in TRACES format.

See Also: 5 Simple Steps To File Income Tax Returns

What About Long Term capital Gains on Equity Shares and Mutual Funds?

You must pay taxes on LTCG for equity shares and equity mutual funds on the gains which exceed Rs 1 Lakh in a financial year. This is a 10% tax without indexation benefit. Collect capital gains statements and calculate the amount of tax needed to be paid.

2. Check Form 26AS

You must download and check Form 26AS from TRACES. This is your tax passbook which has details of tax deducted from your income in the financial year and deposited against PAN. Check TDS certificate against Form 26AS to make sure that TDS deducted from salary/interest and so on is deposited against PAN with the Government.

3. Correct Errors in Form 26AS

If there are errors in Form 26AS, get them rectified. Connect with your deductors who could be the employer, bank and request him/her to make the corrections. You can’t claim tax credits if the errors are not rectified.

4. Compute Total Income for Relevant Financial Year

You have collected the documents and verified TDS deducted from income. You can now compute total income chargeable to tax.

Add income from 5 different heads and claim all tax exemptions and deductions. It’s easier to file ITR with the new Form 16. You must provide the sourcewise bi-furcation for income taxable under ‘income from other sources’.

See Also: Income Tax Return Filing And Eligibility

5. Calculate Tax Liability

You have computed total income. You now have to calculate tax liability by applying income tax rates for FY 2018-19 based on the relevant income tax slab.

6. Calculate Final Tax Payable

After computing tax liability, deduct taxes which you have already paid. This could be TDS, TCS or advance tax.

7. File Income Tax Returns

Pay off all tax dues and start filing ITR. You can claim tax refund, only if you file ITR. File ITR using the right ITR form. If you file ITR with the wrong form, it’s a defective return and you must file ITR again.

You can file ITR by downloading the requisite software in Excel. If you are filing taxes using ITR-1 and ITR-4, you can file online without downloading any software. For ITR-1 use ‘Prepare and submit online’ without downloading the excel software utility.

8. Verify the Income Tax Return

The final step is the ITR verification. This can be done electronically or with physical verification. There’s no need to send documents to the tax department for electronic ITR verification. After filing ITR, you have 120 days to make the verification.

See Also: Changed Jobs: How to File Income Taxes?

9. Acknowledgement for e-Verification

For verification of ITR by the electronic method, you immediately receive tax confirmation from the IT Department. If you have sent the ITR-v via post to the IT Department, you get an email confirmation saying returns stand verified.

10. The IT Department Processes Returns

After ITR verification, the Income Tax Department will process the tax returns. After the ITR is processed, the tax department makes a communication through email to the registered email ID.

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