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Guidelines to File for Income Tax Returns

As the months of June and July arrive, the time to file for Income Tax Returns follows suit. Salaried individuals will have to collect Form 16 from their employers and Form 16A to file for tax deducted on other earnings apart from salary.

Likewise, individuals who are self-employed with income through business also need to accommodate and finalise their yearly accounts. Tax filing experts suggest being prepared for filing for returns beforehand, to simplify things and not wait until the last minute.

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Income Tax Return Online

According to Section 139(1) of the Income Tax Act, 1961 of India, A ‘mandatory return’ is required to be filed by the following:

  • Any company whether it is domestic, foreign, public or private.
  • Any firm inclusive of unlimited liability partnership firm and LLP.
  • Any individual whose total income within a financial year exceeds the basic exemption limit.

Voluntary Return is referred to Income Tax Returns filed by an individual even when he / she is not required to do so. Voluntary Return is also considered as a valid return.

These days the government simplified filing for Tax Returns for the citizens by introducing E-Filing Policy. E-filing is defined as filling for Income Tax Returns electronically. Through e-filing one have the option of either seeking help from a professional or registering online for the tax return from the comfort of one’s home.

Why is filing for Income Tax Returns mandatory?

Filing for Income Tax Returns is an obligation for everyone who earns a Gross Total Income (prior to any deductions under section 80C to 80U) exceeding Rupees 2,50,000 during the FY 2016-17.

It is always better to be prepared in advance rather than waiting to file your tax returns right before the due date.

Generally, documents that will be required during the filing of Income Tax Returns are as follows:

  • Form 16 (received from the employer): Form 16 is helpful in letting a salaried individual know his / her income from the salary as well as any taxes deducted from the salary by the employer.
  • Form 16A: In this case, the taxpayer must collect the form from entities who have deducted tax during the time of payment within the year (TDS). The entities include banks where the taxpayer has a fixed deposit account, companies, tenants to whom the taxpayer has rented out his / her property etc.
  • A summary of all bank accounts the taxpayer has operated during the year: This summary will provide an idea of every income which was earned within the year as well as give details about investments and the expenses incurred by the taxpayer. This will provide the Income Tax Department a complete detail of any extra earnings made during the year which could be taxable.
  • Credentials of any property owned: If the taxpayer has purchased any property during the year, he / she must produce details of the rent received along with the receipts of Municipal Tax payment. On properties purchased through a loan, the taxpayer must provide the details of loan that was taken and a copy of the interest paid on the loan.
  • Sale and purchase bill, documents, contract note for investments made, assets sold: The taxpayer should produce purchase documents associated with any sales made within the year. For larger transactions, it is highly recommended that before calculating the taxable income, the taxpayer prepares a statement of sale, documents verifying the investments made on the purchase, the loss and profit documentation etc.
  • Details of tax payments in case of any Advance Tax payment within the year.

Which type of ITR Form should one file for?

As the new Income Tax Return forms were introduced based on nature of one’s income earned, every taxpayer should know the relevance of each form so that he / she will select the right one.

The 4 types of ITR forms are categorized as follows:

ITR-1 Sahaj Form

ITR-1 is meant for individuals, who earn:

  1. Income through salary.
  2. Interest income which is either taxable or exempted.
  3. Income from family pension.
  4. Income from agricultural activities.

Individuals or HUF who do not earn their income through business, professional channel or through a partnership with any firms.


Individuals and HUF who have income through association in a partnership and he / she do not have any other separate business or profession.

ITR-4 Sugam Form

Individuals or HUF who earn income through business under a proprietary entity or professionally work under a proprietary entity.

The different types of e-filing procedure

  • Digital Signature Certificate (DSC): Taxpayer can use Digital Signature Certificate for e-filing tax returns. Digital Signature Certificate is mandatory while e-filing for certain sections of businesses, families, and individuals. DSC guarantees a convenient and secured procedure, especially during electronic transactions.
  • If a taxpayer files without DSC, he / she must generate an ITR-V form which should be printed, signed and submitted to CPC, by ordinary post or speed post, within 120 days after the date of e-filing.
  • Taxpayers can also e-file for Income Tax Returns via E-Return Intermediary (ERI), a system that enables authorized intermediaries to e-file Income Tax Returns on behalf of the taxpayer.

Common misconceptions of people about Income Tax Return filing

There are many salaried employees who have a misconception about Income Tax Return filing. They think that since taxes have already been deducted from salaries so there will be no requirement to file for Income Tax Returns. However, this is an ill-informed notion and illegal as well because although the tax was deducted from the salary and there are no dues liable, it is mandatory to file for Income Tax Returns.

The Form 16 alone, provided by the employer is not the Income Tax Return form. A majority of citizens in India do not show the interest earned from the savings account as this interest is taxable by law.

How to e-file tax returns

Filing for Income Tax Returns online is a quick and easy procedure. The various steps are as follows:

  • Visit the official website of Income Tax Department.
    • The taxpayer’s Permanent Account Number (PAN) will be used as the user ID.
    • Tax Credit Statement or Form 26AS. The Tax Deduction at Source (TDS) mentioned on Form 16 should match with the figures in Form 26AS.
  • Click on the Income Tax Return forms and choose the desired financial year.
  • Download the ITR form which is applicable.
  • Fill out the ITR form by entering all details required.
  • One can check the payable tax amount by utilizing ‘Calculate Tax' tab.
  • Make the payment for tax if required and fill in the challan details.
  • Confirm all the data which has been provided in the worksheet by clicking the 'Validate' tab.
  • Generate an XML file and save it on your desktop.
  • Then click on 'Upload Return' button and upload the saved XML file.
  • A pop-up will be displayed on the screen asking to digitally sign the file. If the applicant has obtained a digital signature then he / she can select ‘Yes’.
  • The acknowledgment form which is the ITR Verification (ITR-V) will then be generated and available for download.
  • Printout the Form ITR-V and sign it in blue coloured ink.
  • Mail the form by ordinary or speed post to the department CPC, within 120 days of filing for returns, online.

Frequently Asked Questions

Q. Can a taxpayer file for ITR online without a registered account at Income Tax e-filing portal?
No, to e-file for tax returns online, one must have a registered account. The registration is an easy process where one can quickly create an account by entering User Type (individual, HUF, companies, chartered accountants, agencies or tax deductors), PAN, first-middle names and surname and date of birth. If a user forgets his / her password then it can be generated by clicking the ‘forgot password’ button.
Q. How long does it take to verify for Income Tax Return that has been filed online?
One can either:
  • Sent the ITR-V to CPC, Bangalore directly.
  • Verify it online via Electronic Verification Code.
  • Use the Aadhaar-linked one-time password, within 120 days from the day of filing the return.
Q. Can one e-file for tax returns before the tax payments?
One can only e-file for tax return after all the tax payments are cleared.
Q. Is it mandatory for a taxpayer to e-file for tax returns himself / herself or it can be assigned to someone else?
Taxpayers can seek the professional assistance of Chartered Accountants and agencies like All India ITR, for e-filing ITR.
Q. How can one check the status of Income Tax Refund?
The status of Income Tax Refund can be checked online via the official website of Income Tax Department. To check the status, one must enter his / her Permanent Account Number (PAN) and choose the correct Assessment Year. The refund status can be tracked after 10 days from the date of refund authorization from the ITR Department.
Q. What does ITR–V mean?
If a taxpayer e-files for Income Tax Returns without using DSC or he / she e-files via E-Return Intermediary (ERI), then Form ITR-V will be generated for the taxpayer. The taxpayer must printout this form, sign it and submit it to the Central Processing Centre, Bangalore via speed post or ordinary post after 120 days, from the day of e-filing.

In the News

  • The last date to e-file TDS statements by employers for the quarter ended 30 September 2017 is 31 October 2017

    If you are a TDS depositor ensure that you are registered at the TRACES portal and that you accurately furnish your CIN, PAN and TAN to receive tax credits and not default on payment. Once you make the payments and obtain the Challan you have 7 days to correct your statement from the day of receiving communication of receipt.

    The TDS certificate (Form 16A) needs to be mandatorily downloaded from the TRACES portal. There is a late payment fine of Rupees 200 for every day the payment is delayed. If you do not possess a PAN, fill and submit Form 27Q.

    Further employees should receive their TDS certificates by the 15th of November this year otherwise you would be liable to penalty at the rate of Rupees 100 every day of non-compliance.

    25th October 2017

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