ITR Filing - Penalty for Late Filing of Income Tax Return

Posted by Rushabh H. Mehta | Published on 09 Mar 2020
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ITR Filing - Penalty for Late Filing of Income Tax Return

Introduction 

Most taxpaying individuals seem to view filing income tax returns as burdensome and a hassle. However, filing income tax returns is no longer cumbersome like it used to be. With the advent of the online filing, also known as e-filing, the days of standing in long queues and the endless anxiety of meeting the tax filing deadlines are far behind. Today, you can conveniently file your returns from your home or workplace in a matter of minutes. But delaying or missing out on registering your ITR in time could incur substantial penalties.

 

Importance of filing on time

Taxpayers typically receive notifications from the Income Tax Department regarding necessary income tax-related days in advance. In order to avoid paying the income tax penalty for late filing of your income tax returns, it can help to create an alert for such dates or mark them on your calendar.

Filing your income tax returns comes with specific advantages such as carrying forward of losses, claiming an income tax refund, reporting one's revenue or income for the financial year and avoiding paying penalties. Any returns filed after the deadline usually calls for late payment fees of up to ₹10,000.

 

The need to file Income Tax Returns

As a taxpayer, you are called to declare your revenue, tax deductions, investments, expenses and taxes through a form to submit to the Income Tax Department. Under the Income Tax Act, 1961, it is mandatory for every taxpayer to file income tax returns. The facility of filing taxes can now be done online, and hence it is crucial to have necessary documents at the time of filing returns.

 

Understanding penalties

As a taxpayer, the penalty for late filing of income tax return could be:

  • ₹5000 if income tax returns are filed after the deadline of the relevant Assessment Year. In this case, on or before December 31 of the relevant Assessment Year.
  • ₹10,000 if income tax returns are filed after the deadline but before the end of the relevant Assessment Year. In this case, after December 31, 2019, but before March 31, 2020.

ITR

If your cumulative income does not exceed ₹5 lakhs, you could be liable to pay ₹1000. 

The law of placing penalties for late filing of income tax returns was introduced in the Budget 2017, under Section 234F. It subsequently became valid for the Financial Year of 2017-18 or the Assessment Year 2018-19 and forward. The year that directly follows the Financial Year for which the ITR has to be filed is regarded as the Assessment Year. Hence, the Assessment Year for Financial Year 2018-19 is 2019-2020.

 

Simplifying the Section 234f penalty through examples

To understand how penalties can affect taxpayers, let's look at them through instances.

Example 1: Say, Mr X earns a yearly income of ₹6 lakhs. If he files his income tax return for Assessment Year 2019-2020 on August 25, 2019, he will not be required to pay the penalty under Section 234F. This is because, since Mr X filed his income tax returns within the due date, he was saved from paying a late fee.

Example 2: Mr A earning a yearly income of ₹7 lakhs filed his income tax return for Assessment Year 2019-2020 on November 10, 2019, would have to pay ₹5000 as penalty fee. This is because Mr A filed his income tax return after the due date, but before December 31, 2019.

Example 3: Mr D earning an annual income of ₹5.5 lakhs filed his income tax return for Assessment Year 2019-2020 on February 2, 2020, he would have to pay a late penalty fee of ₹10,000. This is because, Mr D filed his income tax return after the due date and after December 31, 2019.

 

Importance of filing taxes

While paying taxes is essential, filing your tax return holds even greater importance. While there are numerous advantages of filing your returns within the permissible timeframe, the consequences of delaying them can prove to be expensive such as paying the penalties under Section 234f income tax.

Hence, as a salaried individual, it is crucial to complete your tax return filing when you receive Form 16. By adhering to deadlines, there is no need to worry about late payment fees.

 

Repercussions of delayed ITR returns

If you delay filing your income tax returns, you may not be able to carry forward your losses from capital gains, except for losses from house properties. Besides, being late in filing your taxes could also incur interest on unpaid tax. In addition, not filing your tax returns on time could cause you to lose the interest on any refundable amount if you are eligible for refund and interest on that refund. 

Besides, if you fail to file your returns on or before the deadline, it could invite an additional interest of 1% per month or until the time you clear the amount on the unpaid taxes. The interest is applicable under section 234A of the Income Tax Act.

For instance, the due date to file your income tax returns in a particular Financial Year is August 31, but you file your taxes on December 30. In this case, if your total outstanding is ₹1 lakh, having taken into account advance taxes and TDS, the total interest payable would be ₹4000, with interest charged at 1% for four months.

However, in the event that you have to pay the fee under Section 234F, you need to apply Challan Code ITNS 280. To pay the penalty, the taxpayer must visit the NSDL website and select Challan ITNS 280. There are two ways to make late payment fees.

  • It can be included as the total income tax due
  • The amount can be mentioned under 'Other' head.

 

Conclusion

Ensure that you file your income tax returns by the due date if your revenue surpasses the exemption limit. It is crucial to file your income tax returns on time if you have to deposit balance tax, expect a significant refund amount or have to carry forward your losses.

 

Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.

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What is a Unit Linked Insurance Plan, Types & Benefits

Posted by Rushabh H. Mehta | Published on 06 Mar 2020

What is ULIP? Insurance plans are meant to provide financial security to you so that in case of premature demise, your family does not face any financial trouble. Though insurance plans provide unmatched financial security, many individuals also seek good investment returns on their premiums. Keeping this sentiment in mind, ULIPs were launched in the year 2000 when private life insurers were also allowed to operate in the insurance domain. Today, ULIPs have become quite popular, and insurance companies are offering different types of ULIPs to their customers. Let’s understand ULIP meaning in detail and its benefits – What is a ULIP plan? ULIP’s full form is Unit Linked Insurance Plan. A ULIP is an investment-oriented life insurance plan. The plan gives you the dual benefits of investment returns and insurance coverage. The premiums that you pay for the plan are invested in market-linked investment funds, which offer attractive growth. Returns under ULIPs are, therefore, not guaranteed but can be attractive if given time. How do ULIPs work? ULIPs are considered to be a transparent insurance plan as the premiums you pay, and the growth can be easily monitored. When you buy a ULIP, you can decide the amount of premium you wish to pay (provided it is at least the minimum required premium under the plan). The sum assured is then calculated based on the amount of premium paid. ULIPs have different kinds of investment funds which include the following – Equity fund wherein at least 65% of the portfolio is invested in equity-oriented securities Debt fund wherein at least 65% of the portfolio is invested in debt-oriented securities Balanced fund which combines both equity and debt investments for moderate risks and moderate returns You can choose one or more of these investment funds as per your risk appetite. After that, relevant charges are deducted from the premium, and the premium is directed towards the selected fund. As the value of the underlying assets grows, the value of the fund grows. Your investment in the fund also grows, and you get market-linked returns. ULIPs also provide you with various flexible benefits which are as follows – Switching – under switching, you can change the investment funds if your investment preference has changed Partial withdrawal – you are allowed the flexibility of withdrawing from your fund value partially after the first five years of the policy have expired Top-ups – additional investments can be done towards the plan through top-up premiums Premium redirection – you can choose to redirect your subsequent premiums to another fund from the next policy year under this facility Surrender of the plan – if the first five years of the policy have been completed, you can surrender your policy to terminate the coverage before the chosen term. When the policy is surrendered, the available fund value is paid as surrender value, and the plan is terminated. Benefits payable under ULIPs Under most unit-linked plans, you get either a death benefit or a maturity benefit. These benefits are as follows – Death benefit – the death benefit is higher of the available fund value as on the date of death or the sum assured. If the fund value is higher than the sum assured, the fund value is paid otherwise, the sum assured is paid. Maturity benefit – when the term of the plan comes to an end, the fund value is paid as maturity benefit. The maturity benefit can be taken in a lump sum, or you can also avail the benefit in instalments over the next five years through the settlement option feature, which is available under most unit-linked plans. Types of ULIPs Though ULIPs are aimed at creating wealth, there are different types of ULIPs based on the financial goal that they fulfil. These types include the following – Investment ULIPs Investment ULIPs are the most common unit-linked plans which aim to create wealth over the term of the policy. Child ULIPs Child ULIPs are especially designed unit-linked plans for the financial security of the child if the parent is not around. Under these plans, the parent is insured while the child is the beneficiary. These plans have an inbuilt premium waiver rider. If the parent dies during the policy tenure, the death benefit is paid. However, the plan does not terminate. The policy continues, and future premiums are paid by the company on behalf of the insured parent. On maturity of the policy, the fund value is again paid as the maturity benefit which provides the child with the financial corpus needed to pursue his/her dreams. Pension ULIPs These are other specific unit-linked plans which help in creating a retirement fund. Pension ULIPs are deferred annuity plans wherein you pay premiums during the policy tenure to build up a retirement corpus. In case of death, the death benefit is paid. However, if the policy matures, pension ULIPs allow you to receive annuity pay-outs from the corpus created or defer the vesting age from which you would receive an annuity, or withdraw 1/3rd of the corpus in cash and use the remaining fund value to receive annuity payments. Thus, pension ULIPs create a source of income after retirement and are suitable for individuals looking to fulfil their retirement planning needs. Benefits of ULIP A ULIP is popular because of the following benefits it provides – It allows you to avail insurance coverage as well as investment returns in a single product The premiums paid and the benefits received under ULIPs are completely tax-free in nature helping you save tax The flexible benefits of ULIPs allow you to manage your investments as per your investment strategy The different types of ULIPs help you fulfil the various financial goals that you might have Switching and partial withdrawals do not attract any tax making ULIPs tax efficient Since the returns are market-linked, you get inflation-adjusted returns from ULIP ULIPs are attractive insurance policies that give you coverage as well as returns. Now that you understand ULIP meaning, its types and advantages, use our IndiaNivesh platform to invest in a plan as per your insurance and investment needs and enjoy all the benefits that the plan has to offer.   Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.

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Advance Tax – Know What is Advance Tax & How to Pay it

Posted by Rushabh H. Mehta | Published on 09 Mar 2020

As the term suggests, advance tax means paying taxes in advance according to a set schedule before the financial year ends. As a taxpayer, you would be familiar with income tax and that it needs to be paid or recovered before the end of a fiscal year.   Understanding advance tax The advance income tax is currently paid every quarter. This form of tax aids the government to receive tax revenue on an ongoing basis. As a taxpayer, you can make smaller payments every quarter that could be easier on your wallet, rather than making a one-time, lump sum tax payment at the end of the Financial Year - in March. To understand what is advance tax, it merely means the payment of tax liability by a taxpaying individual before the financial year closes. As a salaried individual, you may want to know the implications of non-payment of advance tax, how much advance tax needs to be paid, how to pay advance tax online, the income segments on which advance tax is payable and other crucial details, to avoid penalties. Being knowledgeable about taxes can help you to know the difference between the advance tax and self-assessment tax, especially when it comes to filing your taxes or understanding late payment charges. To understand advance tax for individuals, it is imperative to know how and when you need to pay the tax and other essential factors.   Who must pay advance tax? All taxpayers who receive taxable income from sources that are not subject to withholding tax, or where taxes are deducted at a lower rate must pay tax in advance. The Income Tax Department has laid provisions for taxpayers to pay advance tax in four easy instalments within specified due dates whose estimated tax liability for the Financial Year surpasses ₹10,000, or more, as per Section 208 of the Income-tax Act, 1961.  Senior citizens, who are 60 years and above, without an income from a business or profession, are exempt from paying advance tax. Typically, a taxpayer's advance tax payable is decided after making an estimate of the taxpayer's total yearly income, tax payable in that regard, and as reduced by TDS and foreign tax credit. The Income Tax Department also has the authority of estimating a taxpayer's total income and advance tax payable by issuing a notice to make the payment.   The need to pay advance tax The Income Tax Department has made it a mandatory requirement for qualified taxpayers to make advance tax payment for the benefit of the government. Advance tax facilitates the government in receiving tax income every quarter rather than at the end of the financial year. The option of paying advance tax on a quarterly basis also reduces the taxpayer's burden through the payment of smaller cash discharges. The advance tax payable in four instalments during a specific financial year is as follows:   Types of income applicable for advance tax All personal income is liable to tax according to the Income Tax Act. Revenue from monthly rent, interest income, capital gains on the sale of shares or assets, revenue from a profession or business and the like triggers advance tax obligation. As a taxpayer, one must estimate the total personal income received by the individual during the financial year, ascertain the taxes payable, decrease the quantum of taxes that are reserved while remitting the balance taxes based on specific percentiles, on or before the due date of every specified quarter. The primary area of concern for every taxpayer is to understand how to estimate one's taxable income since the revenue for the entire financial year must be calculated in advance to pay taxes.   Penalties on delaying or non-payment of Advance Tax Here’s what you need to know regarding late payment or non-payment of advance tax. Failing to pay advance tax or delaying paying advance tax attracts interest under Section 234B and 234C of the Income Tax Act. 1% interest is levied every month on the total amount due from April to December, and 1% for the quarter ending March. If the advance tax is not paid on time, the simple interest of 1% per month accrues and must be paid on all pending instalments. The Income Tax Department also levies interest if the total advance tax paid, in addition to TDS, is less than 90% of the assessed tax.   Implications of avoiding advance tax payment With regards to salaried individuals, advance tax payable is also levied on any revenue other than the salary, as salary is subject to TDS. Non-payment, deferral of advance tax or partial payment could invite an interest of 1% per month for the first three quarters and 1% for the quarter ending March. This could cumulate in a total of 10% of the advance tax due. In the event that the taxpayer does not pay 90 % of advance tax by March 31 of a financial year, an interest rate of 1% per month will be levied under Section 234B of the Income Tax Act until all the taxes are paid in full. This means, if you default in making advance tax payment during the first three instalments, it could result in 3% interest on the tax payable for the quarter. In contrast, a default in paying the last instalment could result in 1% interest on the advance tax payable.   Conclusion You can make advance tax payment off-line by filling in Challan 280 at authorised bank branches. Similarly, you can also make the payment online via the Income Tax Department's website that offers detailed instructions. Calculate your taxable income and adjust your tax payment accordingly to know your advance tax payable. As a taxpayer, it can help to estimate your total taxable income for the entire financial year in advance. Paying taxes as per the advance tax due dates can save you from the interest levied on a non-payment or short payment of the advance tax. In addition to avoiding paying high-interest amounts, it could also help in reducing the stress of paying significant tax amounts at the time of filing your income tax returns.   Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.  

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  • Advance Tax – Know What is Advance Tax & How to Pay it
    Posted by Rushabh H. Mehta | Published on 09 Mar 2020

    As the term suggests, advance tax means paying taxes in advance according to a set schedule before the financial year ends. As a taxpayer, you would be familiar with income tax and that it needs to be paid or recovered before the end of a fiscal year.   Understanding advance tax The advance income tax is currently paid every quarter. This form of tax aids the government to receive tax revenue on an ongoing basis. As a taxpayer, you can make smaller payments every quarter that could be easier on your wallet, rather than making a one-time, lump sum tax payment at the end of the Financial Year - in March. To understand what is advance tax, it merely means the payment of tax liability by a taxpaying individual before the financial year closes. As a salaried individual, you may want to know the implications of non-payment of advance tax, how much advance tax needs to be paid, how to pay advance tax online, the income segments on which advance tax is payable and other crucial details, to avoid penalties. Being knowledgeable about taxes can help you to know the difference between the advance tax and self-assessment tax, especially when it comes to filing your taxes or understanding late payment charges. To understand advance tax for individuals, it is imperative to know how and when you need to pay the tax and other essential factors.   Who must pay advance tax? All taxpayers who receive taxable income from sources that are not subject to withholding tax, or where taxes are deducted at a lower rate must pay tax in advance. The Income Tax Department has laid provisions for taxpayers to pay advance tax in four easy instalments within specified due dates whose estimated tax liability for the Financial Year surpasses ₹10,000, or more, as per Section 208 of the Income-tax Act, 1961.  Senior citizens, who are 60 years and above, without an income from a business or profession, are exempt from paying advance tax. Typically, a taxpayer's advance tax payable is decided after making an estimate of the taxpayer's total yearly income, tax payable in that regard, and as reduced by TDS and foreign tax credit. The Income Tax Department also has the authority of estimating a taxpayer's total income and advance tax payable by issuing a notice to make the payment.   The need to pay advance tax The Income Tax Department has made it a mandatory requirement for qualified taxpayers to make advance tax payment for the benefit of the government. Advance tax facilitates the government in receiving tax income every quarter rather than at the end of the financial year. The option of paying advance tax on a quarterly basis also reduces the taxpayer's burden through the payment of smaller cash discharges. The advance tax payable in four instalments during a specific financial year is as follows:   Types of income applicable for advance tax All personal income is liable to tax according to the Income Tax Act. Revenue from monthly rent, interest income, capital gains on the sale of shares or assets, revenue from a profession or business and the like triggers advance tax obligation. As a taxpayer, one must estimate the total personal income received by the individual during the financial year, ascertain the taxes payable, decrease the quantum of taxes that are reserved while remitting the balance taxes based on specific percentiles, on or before the due date of every specified quarter. The primary area of concern for every taxpayer is to understand how to estimate one's taxable income since the revenue for the entire financial year must be calculated in advance to pay taxes.   Penalties on delaying or non-payment of Advance Tax Here’s what you need to know regarding late payment or non-payment of advance tax. Failing to pay advance tax or delaying paying advance tax attracts interest under Section 234B and 234C of the Income Tax Act. 1% interest is levied every month on the total amount due from April to December, and 1% for the quarter ending March. If the advance tax is not paid on time, the simple interest of 1% per month accrues and must be paid on all pending instalments. The Income Tax Department also levies interest if the total advance tax paid, in addition to TDS, is less than 90% of the assessed tax.   Implications of avoiding advance tax payment With regards to salaried individuals, advance tax payable is also levied on any revenue other than the salary, as salary is subject to TDS. Non-payment, deferral of advance tax or partial payment could invite an interest of 1% per month for the first three quarters and 1% for the quarter ending March. This could cumulate in a total of 10% of the advance tax due. In the event that the taxpayer does not pay 90 % of advance tax by March 31 of a financial year, an interest rate of 1% per month will be levied under Section 234B of the Income Tax Act until all the taxes are paid in full. This means, if you default in making advance tax payment during the first three instalments, it could result in 3% interest on the tax payable for the quarter. In contrast, a default in paying the last instalment could result in 1% interest on the advance tax payable.   Conclusion You can make advance tax payment off-line by filling in Challan 280 at authorised bank branches. Similarly, you can also make the payment online via the Income Tax Department's website that offers detailed instructions. Calculate your taxable income and adjust your tax payment accordingly to know your advance tax payable. As a taxpayer, it can help to estimate your total taxable income for the entire financial year in advance. Paying taxes as per the advance tax due dates can save you from the interest levied on a non-payment or short payment of the advance tax. 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  • Income Tax Slabs & Rates in India for 2020-21
    Posted by Rushabh H. Mehta | Published on 28 Feb 2020

    Every year, the income that you earn is subject to income tax. Calculation of your tax liability depends on the income tax slabs, which are determined under the Income Tax Act, 1961. These tax slabs specify the rates of tax payable on different levels of income. The higher the income you earn, the higher would be the income tax rate. However, before we understand the income tax slabs and calculation of your tax liability, let's look at the five sources of income that you need to declare when filing your income tax returns. Sources of income Income from salary Income from business or profession Income from capital gains Income from house property Income from other sources Any income that you earn in a financial year should be recorded under the correct head of income. After that, the total income is added together to find your gross taxable income. You can claim eligible deductions and exemptions from your gross taxable income to arrive at the net taxable income, which would then be subject to tax. Income tax slabs Now that you know how you are required to calculate your taxable income, here are the income tax slab rates which are applicable to calculate your tax liability – Income tax slab for individuals and HUF’s Points to note Here are some points which you should note concerning the above-mentioned income tax slabs In all the above-mentioned income tax slabs, there would be an additional health and education cess of 4% on the tax liability calculated. If your net taxable income is up to INR 5 lakhs, you can claim a rebate on the tax payable under Section 87A of the Income Tax Act, 1961. The rebate allowed would be your actual tax liability or INR 12,500, whichever is lower. This rebate reduces your tax liability to zero if your income is limited to INR 5 lakhs Illustration Let’s understand how to use the income tax slab for calculating your tax liability with the help of an example. Mr. Verma is 40 years of age, and he has an income of INR 10 lakhs from salary and INR 2 lakhs from other sources. He invests INR 1.5 lakhs in ELSS schemes and INR 20,000 towards a health insurance policy. His income tax liability would be calculated as follows – Calculation of Mr. Verma’s Taxable Income New Income Tax Slab In the Union Budget 2020, Mrs. Nirmala Sitharaman, India’s Finance Minister, introduced a new income tax slab. In this tax slab, the income tax rates are lower for higher levels of income. The new income tax slab is as follows – Income tax slab 2020-21 Points to note This slab would be applicable from the financial year 2020-21 Health and education cess of 4% would be applicable on the tax liability calculated using the above-mentioned income tax slab If you choose the new income tax slab rates, you would not be able to avail deductions and exemptions available under different sections of the Income Tax Act, 1961 Two deductions can be claimed under the new tax regime from your taxable income. The first deduction will be for your employer's contribution to the National Pension Scheme (NPS) if you are a salaried employee under Section 80 CCD (2). Contribution of up to 10% of your salary would be allowed as a deduction. The second deduction is under Section 80JJAA where expenses incurred on new employment would be allowed as an exemption. The income tax slab 2020-21 is optional. You can either choose the new tax slab or the old one for calculating your tax liability. The rebate under Section 87A would be allowed even under the new tax regime if taxable income is up to INR 5 lakhs Illustration In the above example, if the new tax regime is considered and the employer’s contribution to NPS scheme is INR 50,000, the taxable income and tax liability would be calculated as follows – Calculation of Mr. Verma’s Taxable Income (New Tax Slabs) As you can see, even in the absence of deductions, the new tax regime allows a lower tax liability due to lower tax rates. When you calculate your tax liability, use both income tax slabs, the old and the new, and find out your tax liability. Then choose the tax slab, which offers the lowest tax outgo and file your income tax returns. You can choose tax-deductible investments offered by IndiaNivesh and lower your tax liability using the old tax slabs. So, work out both the alternatives, if you need tax saving options, find them on IndiaNivesh and then file your returns.   Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing. 

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  • Step by Step Guide on how to file ITR (Income Tax Returns)
    Posted by Rushabh H. Mehta | Published on 28 Feb 2020

    Over the last few years, the income-tax department of the country has been very dedicated to making the process for filing of ITR returns easier to ensure robust compliance by the taxpayers. However, many people find still find it intimidating and prefer to pass it on to professionals. How to file ITR online? Filing your ITR online is mandatory, and only super senior citizens who are 80 years or above can file their returns in a paper format. As filing the ITR online has simplified the process manifold, here is a step-by-step guide on how to file ITR- Step 1- Register/Login on the Income Tax Department Portal The first step to filing your ITR online is to register yourself on the Income Tax portal www.incometaxindiaefiling.gov.in.  Your Permanent Account Number is your user id for registration, and you are required to set an alphanumeric password for it. Once you have registered on the official website, you need to log in with the same ID and password, and you will get secure access. You will be prompted to put a captcha each time you log in. Step2 –Collect the relevant documents needed to file your returns Before you start filing your ITR, all your documents must be organised and handy at the time of filing returns. Here is a list of documents you will need for filing your ITR online- PAN Card Aadhaar Card Bank Account Statements Bank Account Details TDS certificate( Form 16/Form 16A) Apart from these basic documents, if you have any other income such as rental income, capital gains/losses, then keep all such documents handy. Step 3- Click on the "Filing of the income tax return" to begin the process of ITR filing online Once you have registered yourself on the e-portal, login to your account and click on the “Filing of income tax return” tab on the dashboard. Step 4 - Download the correct form for ITR filing There are different ITR filing forms available based on your source of income. Choose the relevant form based on your income. The various available based on the nature of income are- ITR-1 Form- Individuals earning income from salary, income from house property, and income from other sources. ITR-2 Form- Individuals and HUFs who do not conduct business or profession as proprietors ITR-3 Form- Individuals and HUFs earning an income through business or profession as proprietors ITR-4 Form- Individuals earning income as business professionals ITR-5 Form- It is for firms, Limited Liability Partnerships (LLPs), co-operative societies, body of individuals ITR-6 Form- Those companies that are not claiming tax exemptions under Section 11 of the Income Tax Act ITR-7 Form- It is for trusts, colleges, institutions and political parties It is essential that you choose the correct form for ITR filing as filling in the wrong form will make it invalid, and you will have to re-file it.  Step 5- Fill in the relevant information in the ITR form Once you have downloaded the appropriate form, then enter all the relevant details like name, PAN details, address, date of birth, investments, bank details, etc. in the form and validate the details entered by you. Step 6- Compute your taxable income Once you have entered all the relevant information in the form, compute your total taxable income for the financial year by adding the income from all the five heads of income. Step 7- Calculate your tax liability After you compute your taxable income, calculate your tax liability as per your income tax slab. Step 8- Verify your Form 26 AS The next step is to verify your Form 26 AS, which shows all the taxes that you have already paid in the year. You have to go on the quick link menu and open your Form 26 AS where you find details of TDS, advance tax, self-assessment, etc. Form 26 AS is a consolidation of tax credit statement. Step 9- Calculate your final tax liability Calculate your final tax liability after deducting the taxes that have already been paid by you. If there are any additional tax that needs to be paid then you can pay it online. Step 10- ITR filing after paying your dues Once you have paid your taxes in full, you can file your ITR in Excel or Java software utility. ITR1 and ITR 4 forms can be submitted online only. Step 11- Verification of your ITR filing This is the last step in filing ITR. You are required to verify your ITR either electronically or physically. If you opt for electronic verification, then you will receive the acknowledgement receipt immediately. You can also send the ITR for verification by sending a signed copy by post to the Income Tax Department in Bangalore within 120 days, and they will email you the acknowledgement for the same. After the verification is over, the Income Tax Department will process your ITR to cross-check the details and tax paid by you. On completion, they will communicate the same to you via email on the registered email id. Conclusion Over the years, the process of ITR filing has been simplified, and now it is mandatory to e-file your returns except in the case of super senior citizens. If you have any queries or doubts about filing your ITR online, then you can get in touch with our tax experts at IndiaNivesh to help you file your returns.   Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing. 

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