Filing Income Tax -Step by Step Process

It is that time of the year again. Wondering, whether you should file income tax or complex terminology(Section 80C, 80TTA) restraining you from taking the first step. In this article, we would try to answer few of those queries and help you with some of the best resources available to file your taxes.

Let’s try to address the elephant in the house!!

Am I Required to File Income Tax Returns?

It is mandatory to file income tax returns in India if your gross annual income is more than-

Should File Returns if I Earned Less Than Taxable Income i.e. Less than 2.5 Lakh in this financial year?

Yes, it is advisable to e-file your income tax returns even if you don’t pay taxes. A zero-return filing will be helpful when you need to get your tax refund or apply for a loan or visa.

Let me explain it bit more: The most important benefit of paying taxes and filing your income tax return is that only the income disclosed by you in your income tax return is considered your true income. If you are required to show your income at any place in future, only the amount disclosed in your income tax return would be considered as a valid proof of your income.

Moreover, even if you apply for any Loan from a Bank, you are mandatorily required to show them your income tax return and only the income disclosed in this income tax return would be considered as a valid source of income.

Note: This link by ClearTax addresses a lot of such common queries. Do read!

Now, you have decided to file income tax. What next?

You can directly file on incometaxindiaefiling.gov.in if you are comfortable with taxation terminologies and various sections.

If not, there are various third party sites that simplify the process of efiling, breaking down terminologies into easy to understand descriptions. E.g. cleartax.in, myitreturn.com, taxspanner.com etc

The Other advantage with these portals is that for each subsequent year, you are not required to fill the same basic details (like address, aadhaar, bank accounts etc) again. Thus, making subsequent e filling a matter of few clicks.

Use this link to create account on ClearTax, which is free: https://cleartax.in/r/1v2wgrsp

• If you have received Form 16 from your employer, follow the instructions here. You can upload multiple Form 16 (your employer, bank etc)

• If the employer doesn’t provide Form 16, refer to the instructions here.

Once the return is efiled, the next important step is to verify it, either by physical post or more recommended e-verification. It's very easy, just follow the steps in this link.

Note: From this financial year, the government has made the linking with aadhaar Card mandatory; therefore, you do need to possess an aadhaar card and keep your aadhaar card number handy while filing your returns. Follow this link for more information.

Important things to remember:

• Don’t forget to get Form 16 from your bank, Banks deduct TDS if the FD interest income exceeds 10,000. If it does not, it is your responsibility to mention the same.

• Get details of saving bank interest from your bank statement. Generally saving interest is credited at the end of each quarter. Interest up to 10,000 is exempt under section 80TTA

• Do mention all your bank account details.

• Don’t forget to claim LTA, if that forms part of your salary. Note that only 2 journeys can be claimed in a block of 4 years. We are currently on the 1st Jan 2014- 31 Dec 2017 block.

• Do it before the deadline to avoid any penalties.

Disclaimer: A lot of content for this article has been taken from ClearTax.in. We are in no way associated with them. The author of this article is personally using ClearTax from past few years and finds it very convenient to use. There might be several other options which you are free to explore.