NOTE: This tutorial is for Assessment Year (AY) 2011-12. Although the information has been checked for correctness, no guarantees are made to that extent. Please verify the information with other sources as well.
I have been filing my Income Tax returns online ever since the IT Department launched the online tax return filing facility at https://incometaxindiaefiling.gov.in. Not only is it very convenient to file your tax returns online, compared to the rather tiresome, frustrating and time-consuming process of physically filing your returns, it is also actually very easy to do so and the satisfaction is well worth the effort!
So I thought I should share the process of filing IT returns online, so many more of you can do the same and save a lot of your time, patience and effort!
Following are the steps:
1. Register on IT Dept. E-filing website (one-time only):
If you are filing your tax returns online for the first time, you must first create your account on the IT Dept. E-filing website. Click on the “Register” link on the home page to register.
It is exactly like opening an E-mail account, except that here your username will always be your PAN number. You must, of course, choose your password.
NOTE: If you don’t have a PAN card yet, you can refer to the instructions on this page to apply for one.
2. Download the appropriate ITR form:
Login to your account on the IT Dept. E-filing website and download the appropriate Return Preparation Software (Excel sheet). You can do this by clicking on “Downloads” tab at the top, and then clicking on the appropriate “Assessment Year” (AY) link from the drop-down menu.
There are various types of IT return (ITR) forms available. For salaried employees like me, the most important one is the ITR-1 form (also known as Sahaj for AY 2011-12), which allows you to declare:
a. Income from salary
b. Income or loss from one house property (for those repaying a home loan and/or having income from a rented property)
c. Income from other sources (such as interest income from savings accounts and fixed deposits, or income from a part-time business or profession)
There is an Excel form corresponding to every ITR form. In this blog post, I will be concentrating on ITR-1 only.
3. Fill in the ITR Excel form:
NOTE: Make sure that Microsoft Excel (or OpenOffice Calc) doesn’t have Macros and ActiveX controls disabled, otherwise you will encounter problems while filling the form.
The ITR-1 form consists of three sheets: “Income Details”, “TDS” and “Taxes Paid and Verification”. Each sheet will have some rows with black letters, and some with blue. You only need to fill the black rows. The blue rows will be filled in automatically depending on the values entered in other rows.
Let’s see how to fill each sheet, one by one.
a. “Income Details” sheet: Fill in your name, address, PAN number, email ID and phone number, etc. Select your employment category (Govt./PSU/Others) and whether this is an “original” or “revised” return (“revised” means you already submitted your returns, but later realised you left out something or made a mistake, and are now submitting a revised return).
If revised, also specify the original return’s receipt number and date, as shown below.
– Income from salary
Now, firstly you need to fill in your income from salary in Row 1, and deductions under Chapter VI A (under Sections 80C, 80CCC, 80CCD, etc.) in Rows 5(a) through 5(m), where each row has its maximum limits).
For this, you need to refer to the Form 16 provided by your employer(s), which will have all the information mentioned above, almost in the same order and format. You just have to copy the values from the Form 16 to the corresponding fields in the ITR form.
Finally, the total of Rows 5(a) to 5(m) needs to be copied in Row 6 (you can just use the “System calculated” value). It’s really easy!
This takes care of income from salary. You may also have interest income from money lying in savings bank accounts or fixed deposits, which also needs to be declared.
– Income from bank savings or fixed deposits
Any income of this nature needs to be declared in Row 3 of the ITR form. You will get the information about interest earned and Tax Deducted at Source (TDS) by the bank in a document called Form 16A, which the bank has to mandatorily send you if they have deducted any tax on interest during the previous Financial Year (FY). The Form 16A will have details of how much interest was paid and how much tax was deducted in a chronologically itemized manner.
– Income from house property
Lastly, if you own any house property and have any rental income or loan repayments on it, you need to declare your net gain or loss in Row 2. Remember that you if you own more than one house property, you need to use ITR-2 and not ITR-1.
NOTE: For those having income or loss from one or more house property, refer to this post for how to calculate the same.
b. “TDS” sheet: First, in Table 23, you need to enter the TAN number, name and address of every company you worked for during the financial year under assessment, in chronological order (click on “+” to add more rows). And also, from each company’s Form 16, you need to fill in the values for “Income chargeable under the head salaries” and “Total tax deducted”. Note that the total income from all the entries, if correctly entered, will automatically add up to the value entered in Row 1 on sheet “Income Details”.
Next, in Table 24, you must fill the various entries using data from your banks’ Form 16As (click on “+” to add more rows). As mentioned above, the Form 16A will have the break-up of the TDS on interest income. The TDS details must be entered in Column (4), and the total of the entries in Column (4) here must add up to the figure entered in Row 3 on the first sheet. Column (5) can be filled up the same as Column (4).
We will discuss Table 25 later. Leave it empty for now.
c. “Taxes paid and Verification” sheet: Here, the values in blue rows 15 through 17 will be automatically filled in depending on what you entered in “Tax deducted” in Tables 23 and 24 on “TDS” sheet.
Here, you need to fill in your bank account number in Row 20 and specify MICR code and type of account in Row 22. Select “Yes” in Row 21 to receive tax refunds (if applicable) directly to your bank account, or select “No” if you want refunds via cheque.
Also fill up the “Verification” section with your name, father’s name, place, date and PAN.
With this, the ITR form has been filled up.
4. Validate all sheets:
After filling in the three sheets as specified above, you need to click on “Validate sheet” button on every sheet. The software will check for errors. You need to ensure that every sheet shows “Sheet is OK”. If any errors are indicated instead, those need to be rectified.
5. Calculate tax:
The most important rows in the ITR form are Rows 18 and 19. These show the balance tax payable or refundable, respectively. To populate these rows, you need to click on “Calculate tax” on the first sheet. This will populate the blue rows on all pages.
If the total tax deducted so far (on your salary by your employer, and on your interest income by your bank(s)) is equal to the total tax payable by you (as calculated in Row 17), then the values in Rows 18 and 19 will be zero, barring any mistakes from your side. In that case, all your tax has already been paid. You just need to submit the IT return and your job is done. So you can skip steps 6 and 7 and go directly to step 8.
If the value in Row 19 is positive, it means you’ve paid more tax than necessary and are therefore entitled to a refund. You should then provide your bank account details in Rows 20 through 22 (as indicated above), so that the IT Dept. can refund the excess tax once your IT return is processed. Again, you can go directly to step 8 from here.
Most significantly, if the value in Row 18 is positive, it means you still need to pay some more tax to cover the gap between what you are liable to pay and what has been paid so far. We’ll cover this in the next section.
6. Pay balance taxes and penalties, if applicable:
If you have any balance tax payable (value in Row 18 is non-zero), you must pay off this amount as soon as possible.
Balance tax is usually payable when you change companies during the year, but don’t provide the previous company’s Form 16 to the next company’s Finance Department, due to which they cut less tax assuming you had no prior earnings during the year. Also, banks usually cut tax on interest income at 10%, since they assume your taxable income falls in the lowest tax bracket. But if your taxable income falls in a higher tax bracket, then you need to pay additional tax.
If you are liable to pay any balance tax, you must also check if there are any penalties applicable to you due to late or incomplete payment of tax under Sections 234A/B/C. For this, refer to this blog post.
In previous years, you would need to go to a bank and deposit the balance amount by cash or cheque, after which you would get a “challan” as a receipt of the payment. But the good news is that from 2009, balance tax payments too can be done online! Here’s how:
a. Go to the Online E-Tax Payment System at https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp.
b. Click on “Challan No./ITNS-280” (Payment of income tax). On the next page, select the following:
– Tax applicable: (0021) Income tax – other than Companies
– Type of payment: (300) Self-assessment tax
c. Enter your other details (name, address, PAN number, etc.), choose your bank from the list and click on “Proceed” at the bottom. You will be taken to your bank’s website where you can make the balance tax payment. It is preferable to correctly specify the breakup of the total balance payable into actual Income Tax and Education Cess of 3%.
Note that apart from the balance tax payable, you must also enter any penalties applicable under Sections 234A/B/C separately in Interest field.
d. After making the payment, you will be shown the “e-challan” (e-receipt) for your payment. Save it to your PC and take a printout for your records.
7. Update ITR and recalculate tax:
Once all balance taxes and penalties are paid, enter the challan information in Table 25 on sheet “TDS”, which we left empty earlier. You also need to enter the total of Section 234A/B/C penalty calculated above in Row 14 on “Income Details” sheet. After this, you need to validate all sheets again and finally click on “Calculate tax” as before. This time, the value in Row 18 must be zero, indicating that all taxes due have been paid.
8. Generate and upload XML file:
Once you have verified that the revised value in Row 18 is zero, you need to click on “Generate” button to generate the XML file. This XML file will be generated in the same folder as the Excel sheet, and needs to be uploaded to the IT Dept. website.
Next, log back into your IT Dept. E-filing account at https://incometaxindiaefiling.gov.in. Locate the “Submit return” link on the left panel, choose your ITR form from the drop-down list and click “Next”. On the next page, click on “Browse” and select your XML file, and click on “Upload”. This will submit your IT returns to the IT Dept!
Upon successful submission, the next page will show a link to your ITR-V (ITR Verification) form. A copy of it will also be sent to your registered E-mail address.
Please take a minute and verify if all the entries in this form are correct. If not, you may need to file a revised return (see above for what a revised return means).
9. Post ITR-V to IT Dept.:
You need to take a print-out of the ITR-V form, sign it (in blue ink) and post it to the address mentioned at the bottom of the form by ordinary post.
Once your ITR-V form is received by the IT Dept., you will get an acknowledgement of the same by E-mail (called an E-Acknowledgement). Keep a printed copy of this for your records.
NOTE: If you have purchased a digital signature (see notes below), you don’t even have to post the ITR-V. Your IT return filing process is completed as soon as the XML sheet is uploaded.
Some miscellaneous points:
1. In some cases, you may need to fill up Rows 11 and 12 (relief under Sections 89 and 90/91). Refer to other sources to see if these sections are applicable to you.
2. Educational cess is calculated as 3% of total tax payable.
3. Tax-exempt interest income must be declared in Row 25. This is interest income for which the bank has not deducted any tax (you can find this from the bank’s Form 16A).
4. If you have paid any balance taxes, it is advisable to verify after 1-2 days if the Self-assessment tax paid by you is reflecting in your Form26AS for the current year. You can view your Form26AS by logging in here: https://www.tdscpc.gov.in/.
So that’s all that there is to filing your IT returns. Do let me know if I need to be more clear about something, or if I need to add or rewrite something.
- Income Tax Dept. E-filing website: https://incometaxindiaefiling.gov.in
- View Form 26AS online: https://www.tdscpc.gov.in/
- Online E-tax payment system: https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp