What is Income Tax Return e-Filing?
Income Tax Returns (ITR): Everything You Need to Know
Income Tax Return (ITR) is a form that individuals and businesses use to report their income and the taxes they owe to the Income Tax Department. According to the Income Tax Act and Income Tax Rules of India, every citizen is required to file their returns at the end of the financial year. The type of ITR form you use depends on the nature of your income and its source.
It's crucial to file your ITR by the due date, as late filing can lead to penalties and prevent you from carrying forward certain financial losses.
What is Income Tax Return e-Filing?
E-filing, or electronic filing, refers to the process of submitting your Income Tax Return through the internet. It allows taxpayers to file from the comfort of their homes or offices at any time. E-filing also speeds up refund processing because the data is directly uploaded to the system without manual handling.
Types of Income Tax Return e-Filing
There are three main methods to e-file your ITR:
- Filing with DSC (Digital Signature Certificate):
This method is the simplest and fastest. When you file with a DSC, no further steps are needed after submission. - Filing without DSC:
If you file without a DSC, an ITR-V form is generated. This form needs to be printed, signed, and sent to the Central Processing Center (CPC) in Bangalore via Speed Post or Standard Post within 120 days of e-filing. - Using ERI (e-Return Intermediary):
This method can be used with or without a DSC, and an intermediary assists with the filing process.
Who Needs to File ITR and Why You Should File
Filing an ITR is mandatory for anyone who meets the following criteria:
- Annual income exceeds the exemption limit:
- Individuals below 60 years with a gross annual income of ₹2.5 lakh or more.
- Individuals between 60 and 80 years with a gross annual income of ₹3 lakh or more.
- Individuals over 80 years with a gross annual income of ₹5 lakh or more.
- Claiming an income tax refund:
If you are eligible for a refund from the Income Tax Department, filing an ITR is essential. - Foreign investments or earnings:
Individuals who have invested in or earned income from foreign assets during the financial year must file an ITR. - Loan or visa applications:
Filing an ITR is often required when applying for loans or visas. - Registered businesses or organizations:
If you own a registered firm or organization, you must file an ITR, even if you have no profits or have incurred losses.
Special Circumstances for Mandatory ITR Filing
Even if you do not meet the general income criteria, you may still be required to file an ITR under certain conditions:
- Large bank deposits:
If you have deposited ₹1 crore or more in any current account. - Foreign travel expenses:
If you have spent more than ₹2 lakh on foreign travel, whether for yourself or someone else. - High electricity consumption:
If your annual electricity expenses exceed ₹1 lakh.