Priyanka Iyer
The year 2020 has been full of twists and turns, which has resulted in several modifications in policies and revisions in deadlines. The matter of tax filing has been no different. The date for ITR filing has been extended again, for the fourth time this year. The deadline now has been extended to December 31, 2020.
While it may seem like there’s a lot of time to file your returns, it would be good to file them before time. Any kind of delay closer to the deadline, may result in incurring late filing fees. Before understanding how to file your returns, let’s understand the importance of filing returns.
Why do you need to file IT returns?
The annual income calculated for an individual comprises five heads of income, and is calculated before allowing any deductions under sections 80C to 80U of the Income Tax Act, 1961. Based on your gross total income, you’re required to file returns, as this total income exceeds exemption limit before being adjusted for deductions.
Filing your returns, even if you don’t fall in the taxable income limit, can have several benefits. Here’s a look at some of these benefits:
- You can claim tax refund, in case TDS has been cut on your investment
- Income tax returns reflect a detailed picture of your income, which can come handy during application of loans or for visa processing
- Any losses incurred during the present year can be carried forward to the next year, to set it off against the income of subsequent years
- Providing your ITR at the time of accidental death or disability, can enable you to establish income proof, in case of compensations.
In addition to the above, filing ITR is a good practice that must be followed by every law-abiding citizen to keep the income tax department informed about their income and taxability.
How to file your IT returns?
Before filing IT returns, here are the steps you need to undertake:
- Compute your gross taxable income and tax deducted at source, by collecting these documents:
- Form 16 (in TRACES format)
- Salary slips
- Interest certificates for capital gains
- Download and cross-check TDS certificates with Form 26AS, to verify if tax deducted from your incomes such as salary, interest, etc. is deposited with the government, against your PAN. Get the errors rectified, by your employer, bank or any other financial institution.
- Compute your total income and check tax liability for the Financial Year.
- Calculate final tax payable, if any, after deducting the taxes that have already been paid.
Now that you’re ready with all these details, you can go ahead and file your returns. Here are the steps to file your returns online:
Step 1: Visit the Income Tax Portal, and register online using your Permanent Account Number (PAN)
Step 2: Download the appropriate ITR utility under ‘’Downloads > IT Return Preparation Software’
Step 3: Open the ‘Return Preparation Software’ that you’ve downloaded, and enter all details from your Form 16, as per the provided instructions
Step 4: In case of tax liability, compute payable tax, pay the tax amount and enter the relevant challan details in your tax return. You can skip this step, in case there is no tax liability.
Step 5: Confirm your details and generate an XML file, which will be saved on to your system.
Step 6: Click on ‘Submit Return’ and upload the XML file
Step 7: Add your digital signature, confirm your details and get an acknowledgement email, after which you can e-verify your return.
That is all. You can now file your returns easily, and avoid all last minute stress and penalties.
