Income Tax Return e-Filing Guide

Most Comprehensive guide for Individuals for FY 2019-20 (AY 2020-21) for efiling income tax return in India in simple language

Income tax department has been very proactive from last one year and working too hard on making the compliance as strong as possible in our country. From introducing the provision u/s 234F for non filing of income tax returns to making- most of processes online by eliminating the traditional paper based compliances; the objective of the department is very clear that it wants your files to be clean and compliant with the law.

In this article, we will share the most crucial information that you must know while filing of your income tax return (ITR) for FY 2019-20 (AY 2020-21).

What is Income Tax Return?

Income Tax Return (ITR) is a form through which you report the details of your income earned from various sources and thereon pay taxes to the Income Tax Department. ITR contains all the details of incomes and tax saving investments done by an individual in a particular financial year. The tax department has notified 7 types of ITR forms i.e. ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, ITR 7 for filing Income Tax Return (Forms are relevant for individuals, company, firm, etc.).

Why Filing of a tax return in India is important ?

The Income Tax Act 1961, obligates certain eligible persons to file their income tax return once in a year. Filing of Income Tax Return legitimize your earnings and investments whereas non filing it means that you have not disclosed your eligible income which is required to be disclosed as per law, which becomes your Black Money. Also, by filing your Income Tax Return you can get an income tax refund, if you have paid excessive taxes to the government. Further your Income Tax Return plays a crucial role at time of applying loan, credit card, etc.

What is eFiling of Income Tax Return?

E-filing of Income tax return is filing your Income tax return online., There are two ways to file an Income tax return in India :

• One is the traditional method i.e. offline in paper format, where the return is submitted physically to the IT department. and,
• The other one is the electronic mode, where you can submit your return online through the income tax website or by following a few simple steps

As per latest announcement by income tax department, At present income tax returns can be filed through online method only. However, the super senior citizens are allowed to use the offline paper mode.

Who is required to file an Income Tax Return?

Every Indian including an NRI is required to file an Income tax return where Total Income exceeds the basic exemption limit of Rs. 2,50,000 for an individual; Rs. 3,00,000 in case of senior citizen and Rs. 5,00,000 in case of super senior citizen.

Total Income comprises income from all sources i.e. income from salary, house property, business income, capital gains or any other taxable income. This limit is to be checked before giving the benefit of deductions like 80C,80D, 80DDB etc.

You are required to file return irrespective of the fact whether you have paid tax or not. So, even if the employer has deducted TDS in full you are still to file an income tax return.

In what cases Residents of India are required to compulsory file their return irrespective of income criteria:-

• You are a beneficial owner of any asset located outside India.
• Have any financial interest in entities located outside India.
• Beneficiary of any asset located outside India.

In simple words, if you have any foreign income connected, you have to file your ITR on or before the due date.

As per budget 2019, given below individuals are also required to file an Income Tax Return even if total income is below basic exemption limit from F.Y. 2019-20 in following cases :

• who has incurred expenses on payment of electricity of an amount of Rs. 100,000 or more during the year
• who has incurred a expenses of Rs. 2 lakhs or more for foreign travel, either for himself or another person
• Who has deposited Rs. 1 Cr or more in the current accounts maintained with a banking company or a co-operative bank
• Also, a person who claims exemption under Sections 54 and 54F (reinvestment of long-term capital gains or LTCG from a property sale), where income before exemption is more than the minimum exemption limit, will have to file ITR.

Let’s take a few quick and easy examples of real life situations to understand it better:-

Is there any benefit of filing return if an individual’s income does not exceed Rs 2,50,000?

If your Income doesn’t exceed Rs 2,50,000 during the year, then you’re not legally bound to file your return. But it’s still recommended that you file your return because of the benefits that come with filing income tax return :

Accidental Claims

This is one of the benefits that comes to picture when you meet with an accident and want accidental claim from the insurance companies.If you have your income tax returns with you then the court applies a simple formula to arrive at the claim amount.

Proof of Income/Proof of Net worth

What’s the best document for your Income Proof? No brownies for guessing this one. Yes, we all know it’s your income tax return.

Refund

You can claim a refund of the amount that you have paid in excess or deducted excessively in the form of TDS. There is no bigger joy than getting back your money from the Income Tax Department.

Eligibility in Loan Application

Income Tax Returns of the last three years is one of the basic documents required for loans. This helps banks in judging your pay back capacity.

Carry forward capital losses

If in a financial year you have incurred capital losses, then you can carry forward it and settle in future.

Obtaining Visa

For travelling abroad, foreign consulates of many countries ask you to furnish last 3 years’ income tax returns or current year’s income tax return. Absence of any return can reduce the chances of you getting a visa specially under the visitor, investor and work permit category.

Carry forward of losses

Want to claim last year’s business loss? File your income tax return and you’re all set for it.

For Startup Funding

Looking to raise funds from VC’s, angel? You need to have income tax returns filed till date ready. Many investors study your business scalability, profitability and other cost parameters from your business income tax return.

Protection against Black Money

If you diligently file your income tax return every year, then your savings will never be at risk of being termed as black money by the Income Tax officials as any income not reported to the Income Tax Department comes under the radar of black money.

Buying insurance Policy with high life cover

Some insurance companies are adamant for income tax return while providing high life cover to verify your annual income.

Obtaining Government Tender

Sometimes, furnishing your income tax return is a must to apply for government tenders especially when tender of high value are being awarded.

Avoid penalty

Non-filing of income tax return can lead you in trouble with the income tax department. You carry the risk of not only paying a penalty but interest on it as well.

Credit Card Application

Want to flaunt a high limit Credit Card? Well, you better have your income tax return with you to get the hang of it.

Growth of the nation

Be a part of the nation building process by filing an income tax return.What will happen when I have taxable Income, but do not file my income tax return?

Having taxable income and not filing income tax return can put you in trouble with the Income Tax Authorities. Be prepared to welcome notices from Income Tax Department along with fines and penalties. The consequences of non-filing of return are:

• Late filing Fee u/s 234F shall be levied if return is not filed on or before the due date. The quantum of fees shall vary according to the amount of your income and return filing date. Maximum fees levied is Rs. 10,000/-.
• Notice u/s 142(1) which requires you to file your return if you have not filed it before the due date. if you fail to comply with this notice then it may result in:

(a) Best Judgement Assessment u/s 144 and/or

(b) Penalty of Rs. 10,000 u/s 271(1)(b) and/or

(c) Imprisonment with or without fine u/s 276D.

• Notice u/s 148 for furnishing return within the period as mentioned in the notice itself.

As per Section 270A, if income is under-reported due to

– Wrong disclosure / misreporting then penalty shall be leviable @200% of tax payable on such income and

– In any other case, the penalty shall be 50% of tax payable on such income

• A penalty of minimum 100% to a maximum of 300% of the amount of tax for concealment of income u/s 271(1)(c).
• Interest u/s 234A keeps on mounting at the rate of 1% per month/ part of the month till the time you file your return. Also, you’d be required to pay interest u/s 234B and 234C, both at the rate of 1% per month/ part of the month if you’ve not complied with the advance tax provisions at the time of late filing of return.
• If you have losses (Business) which you want to be carried forward, you can not carry forward your loss if you do not file an Income Tax Return or file after the due date.

When should I file my Income Tax Return?

Due date of filing Income Tax Return is the 31st July (after the end of each financial year for which it has to be filed). This date may be extended by the Income Tax Department. So for the financial year 2019-2020 ended on 31.03.2020, the due date would be 31st July, 2020 unless its extended.

Although, for the people who fall in the limits of tax audit, the due date is 31st October and in case where transfer pricing is applicable, the due date is 30th November after the end of the financial year.

Note: Persons who fall in the limits of Tax Audit are:

• Person carrying on business and sales/turnover exceeds Rs.1 Cr.
• Person carrying on profession and Gross Receipts exceeding Rs 50 Lakhs.
• Person carrying on business or profession under the provisions of section 44AD and sales/turnover exceeds Rs 2 Cr. or declaring income lower than the deemed income under the applicable section.

NOTE: The threshold limit of Rs 1 crore for a tax audit is proposed to be increased to Rs 5 crore with effect from AY 2021-22 (FY 2020-21) if the taxpayer’s cash receipts and cash payments are limited to 5% of the gross receipts or gross payments.

What will happen in circumstances where I have missed the due date or made a mistake while filing my Income Tax Return

Missed the due date

You can file a belated return before the end of relevant assessment year i.e. For FY 2019-20 (or AY 2020-21) filing date of it would be till 31st March, 2021. (It is called a belated return i.e. late filed return (After the due date) but with the payment of late fees u/s 234F.) Similarly the applicable due date for filing belated return related to FY 2020-21 (Or AY 2020-21) will be 31st March, 2022

Made a Mistake

You can Revise your already filed ITR by the end of relevant assessment year i.e. For FY 2019-20 (Or AY 2020-21) filing the date would be 31st March, 2021.

From here check all the due dates to stay one step ahead of Income Tax

What will happen if I don’t file an Income Tax Return on or before the due date?

Following are the consequences if you do not file your Income Tax Return on or before the due date:- non-filing of ITR. Some of them are:

• You can not carry forward the losses from your business.
• Lose Interest on refunds.
• Pay Interest under section 234A @ 1% per month for late filing of return.
• Late filing fee u/s 234F upto Rs. 10,000 depending upon taxable income and date of return filing will be levied.
• You may receive the Notice from the Income Tax Department.

What are the options available to a person if he/she misses the due date or if one wants to file a tax return after the deadline of Income tax return filing is over?

Well, even if one misses the due date , still they can file the Late/Belated Return. A belated income tax return can be filed before the end of the relevant assessment year. You can file the ITR of F.Y. 2019-20 till 31 March 2021 and ITR of F.Y. 2020-21 till 31 March, 2022.

What is the process for e-Filing of your Income Tax Return?

Income Tax online filing is a simple process and can be done by sitting at home for free

Step 1:

Visit tax2win website. Here, click on option “File ITR Now”.

Step 2:

Here Select your source of Income and click on continue.

Step 3:

If you’re salaried individual, Just Upload your Form 16.If you do not have any form 16 then you can simply skip the option and move further.

Step 4:

Enter the Financial Year, PAN & Aadhaar details and other basic details like your Employment Details, Deductions(If Any), bank details. After giving the details of all the information,

Step 5:

Review your tax computation and click on “File My ITR” button.

You can also use the government portal to file your income tax return. The link of the government website is https://www.incometaxindiaefiling.gov.in/home. Filing on Tax2Win or Government portal will not make any difference because ultimately the return gets filed with the government portal in both cases and both sites are 100% free of cost for filing. You can check this link to for any help required during eFiling on government portal- https://www.incometaxindiaefiling.gov.in/help/?lang=eng

Our Users finds Tax2Win website more friendly and easy to use since it is designed basis inputs from lakhs of people who are using it to eFile income tax return every year.

Which ITR form to fill for filing my income tax return in India?

The applicability of the ITR form depends on the source and quantum of income and residential status . Check the correct applicable form to you for FY 2019-20 (AY 2020-21)-

What documents are needed to file ITR?

Although documents differ with the income source but still there are few documents that are common while filing ITR. Also note that you do not need to submit/upload any of the documents on the website, these are advised to be kept with you so that required information can be filled correctly, your time is saved and common errors can be avoided)

PAN Card-

PAN Number is the mandatory requirement while filing the Income Tax Return. Your name & DOB on ITR should be the same as written in a PAN card.

Aadhaar Card-

Government has also made it compulsory for all the taxpayers to use Aadhaar while filing ITR.

Bank Account Statements-

Just to find Incomes, Interest on Saving bank account etc. So that you do not miss reporting of any income in ITR.

Bank Account Details-

Your details of all the bank accounts i.e Bank account number, IFSC code and Bank Name is needed to be mentioned while filing ITR

Challan Details-

It includes details such as the challan no., BSR code , date, amount of payment of Advance Tax/ Self Assessment Tax etc.

Original Return/Notice-

If an individual is filing a revised return or a return is filed in response to notice received, then he is required to fill the details of original return and details of notice.

Check the complete list of documents for ITR filing when you have income from salary, house property, capital gains and other sources.

How to e-file ITR with Form 16?

The procedure to e-file return with form -16 is as follows:

• Choose “File It Yourself” and click on “File ITR Now” option at tax2win.in and
• Upload your Form 16. After uploading the form 16, Tax2win software will auto-fill the Form 16 data.
• Verify your tax computation now and edit if required.
• Click “FILE MY RETURN” button and you are done!.

Can I e-file ITR without Form 16?

Yes, you can still e-file your Income Tax Return even if you do not have form 16 with you. You need to fill in the required details in the software and submit the ITR in the end.

What will be the next steps after efiling of Income Tax Return?

Once you are done with efiling of income tax return, you must:-

• Check your inbox of eMail id as provided in your income tax return form, You will receive an intimation for successful filing of your Income Tax Return, along with ITR-V (Acknowledgement) attached with eMail.
• Cross Check all figures thoroughly in your filled ITR form or ITR-V for any error, mistake etc
• Verify the Income tax return by sending a physical copy to CPC bangalore or you can e-Verify online. Once the return has been successfully Verified, the return filing procedure ends here. And now your job is done.
• IMPORTANT, In case you have a refund in your tax return you shall receive the same in your bank account within the next few days. It is better to keep tracking your refund status so that you do not miss out on any important updates from the department. You can keep checking the refund status from here

Note:- Verification of an ITR is an important step without which your return filing process is not completed. within the time limit (120 days) you have not verified your tax return,it shall be considered as “Invalidated” i.e. null and void. It means that no Income Tax Return has been filed at all.

What is the timeline & methods for completing e-Verification of an Income Tax Return ?

You are required to complete the verification process by either signing it manually or electronically within 120 days from the date of filing your income tax return.You can find out the details here to know step by step process for both modes.

There are various methods to e-verify ITR:

• Through Net banking
• Through Bank ATM
• Aadhaar OTP
• Bank Account number
• Demat Account.
• Physically sending ITR-V.

What is the latest amendment introduced u/s 234F i.e. Fees for filing of Income tax return AFTER the due date and other consequences of non filing or late filing of income tax return?

With a view of improvising tax compliance and effective utilization of information in tax administration, it is important that returns are filed within the due dates. Keeping this in view the law imposes certain fees u/s 234F in case the returns are not filed on time, these are as under:-

If return is filed on or before the due date i.e. 31st July* – No Fees

If return is filed after the due date but before 31st Dec.*- Fee of Rs. 5,000

In any other case- Fee of Rs. 10,000

*(In case of extension, then these dates will be replaced by such extended date)

NOTE:- In case total income is upto 5 Lacs then amount of penalty will be Rs. 1,000 in all cases irrespective of timing of filing of your return.

Further, provisions related to fees for delayed filing of income tax returns are applicable from Financial year 2018-19 (Assessment year 2019-20) onwards only.

Note: In case total income is upto 5 Lacs then amount of penalty will be Rs. 1,000 in all cases irrespective of timing of filing of your return.

Apart from 234F, you need to pay interest on the unpaid amount of Tax under 3 different sections of the act-

• 234 A- @1% per month or Part of the month for delay in filing your income tax return
• 234 B- @1% per month or Part of the month for non-payment or short payment of advance tax.
• 234 C-@1% per month or Part of the month for Non-payment or short payment of individual installment or installments of advance tax (i.e., deferment of advance tax)

Refer to the detailed guide on 234A, 234BC, 234C interest to know more about these sections and how these may impact you.

An important piece of advice that we would like to pass on to all our readers is that:- The Income tax department and tax laws in the country have become more strict in recent times and it will be more compliant & strict in the near future.

The current laws, however, are still lenient and flexible. So, without any delay start making your Income Tax files cleaner and stronger from this year itself. File accurate income tax returns; And if you do need any help or assistance in filing of strong and clean Income Tax Returns.

Frequently Asked Questions

What is Income Tax?

Income Tax is simply Tax to be paid on income earned by you. The amount is required to be paid to the government (Income Tax Department) directly.

What is the last date for filing income tax returns for the FY 2019-20 (AY 2020-21)?

The Due date(or last date) of filing income tax return for individuals and other taxpayers (HUFs, Association of Persons, Body of Individuals) whose accounts are not required to be audited for the FY 2019-20 (Assessment year 2020-21 ) is 31st July,2020.

Is linking of Aadhar PAN compulsory to e-file ITR?

As per the press release issued by the Income Tax Department on 31/08/2017 linking of PAN with Aadhaar is necessary for processing the ITR. CBDT has issued circulars many times since then for further extension on the due dates of linking. now Aadhar and PAN linking due date is 30th june 2020.

How to link Aadhar Number with PAN Card?

• Online : Using Income Tax e-filing Website
• Linking of PAN and Aadhaar can also be done through SMS. Type UIDPAN <Space><12 Digit Aadhaar No.><Space><10 Digit PAN> and send an SMS to 567678 or 56161. For Ex- UIDPAN111122223333 AAAPS1111A
• Link Aadhaar-PAN manually by filling Annexure-1 along with the supporting documents i.e. copy of PAN card and Aadhaar card. through visiting PAN/UTIITSL/NSDL centres.

Who can file the return Offline (In paper form)?

Offline mode is only available for Super Senior Citizens (individuals whose age is 80 years or more during the financial year) and whose income is less than Rs 5 lakh per year and who do not have to claim a refund in the return.

How to calculate the amount of tax to be paid?

You can easily calculate your tax by using our Income Tax Calculator. Here you just need to fill the required information in an orderly manner and at last you will get the amount required to be paid as tax.

How to make tax payment online?

Every individual can pay taxes by Online or Offline method stated by the Income Tax Department.

 I have filed my return, when will I get a refund?

Normally it takes 20-50 days to get your refund after filing your Income Tax Return.

How to correct a mistake made while filing ITR?

As per Section 139(5) of the Income Tax Act, taxpayers can file a revised return to rectify the mistake made while filing ITR. A Tax return can be revised before the end of the relevant Assessment year for which return is filed.

What is Form 26AS and how it is helpful in filing of an income tax return?

Form 26AS is your Tax Credit statement where consolidated details are available about the total tax deducted (TDS) by different parties, while making payment to you and total tax deposit by you (Advance Tax, Self assessment tax etc.).

 Do I need to file returns even if my company has deducted tax on my salary?

Yes, you are required to file your tax return even though TDS has been deducted by your employer, provided your income exceeds the basic exemption limit of Rs. 2,50,000. Further, You can not claim excess money refund without filing your tax return.

What is ITR-V?

ITR-V is the acknowledgement of your return filed which is sent to your email as soon as return is filed.

Is it necessary to attach documents while e-filing ITR?

No, documents are not required to be attached/ uploaded but it is advised to keep them with you. they may be asked by income tax authorities if any assessment notice is served to you in future.

Can I file my ITR for A.Y. 2019-20?

No.If you have not filed your return until due date i.e. 31st July 2019 (extended due date is 31st August 2019), then a belated return can be filed in this case. The last date for filing of income tax returns for A.Y. 2019-20 was 31st March , 2020.

Due to the COVID-19 outbreak the last date of filing Income Tax Return for A.Y. 2019-20 has been extended to 30th June 2020 from 31st March 2020.

How to file an income tax return for salaried employee for FY 2019-20?

For efiling income tax return online, please refer to the above para of this guide explaining the procedure in detail.

Which ITR should be filed for Income from salary or commission or both?

If you have income only from commision, then you are required to file ITR-3 because commision is treated as business income.

However, if you have income from both salary and commission and income from salary is your primary source of income , then you can file ITR-1 and can show commission income as income from other sources, For only salary income, file ITR-1

Is it mandatory to file an income tax return for income less than 5 lakhs?

Yes, as per section 139(1) of the Income Tax Act, 1961, every individual is required to file income tax return if their income exceeds INR 2,50,000. So, if your income is INR 5 lakhs, then you are required to file ITR, even if no taxes are required to be paid.

What is the minimum income for income tax?

For taxpayers, there is no tax on income if his taxable income does not exceeds Rs. 5,00,000, however you are required to file a return if your income exceeds Rs. 2,50,000

Which ITR form is to be filled if income is from interest earned on FD only?

If you are an individual or HUF (Hindu Undivided family) earning income from interest from FD only, then you can file ITR-1

I have an income from my salary as well as capital gains,which ITR form do I need to select: ITR-1 or ITR 2?

ITR-2 is applicable on all those individuals and HUFs whose earnings are from salary, house property, capital gains and other sources but not from business income.Hence, you are required to file ITR-2.

Which Income tax return form should I fill if I am an NRI with no income in India?

An NRI is only required to file a return if he has earned or received any income in India. If there is no income in India an NRI is not required to file income tax returns.

What should I write in the capacity column of the ITR 1 form?

Capacity column indicates the status of the person who has filed the return. if you are filing for yourself then choose self and if you are filing for others then choose representative, if you are filing for HUF then Karta, If you are filing for Partnership then Partner & so on as applicable in your case.

How do small shopkeepers file an income tax return?

If small shopkeepers have turnover of upto Rs. 2 crore, then they can file their return under presumptive scheme under section 44AD,

 I worked for two companies last year. Do I need to use an ITR-2 for e-filing?

You can file ITR-1 even if you have two employers in a single financial year; provided income does not exceed INR 50 lakhs. ITR-2 is required to be filed by those individuals and HUFs whose earnings are from salary, house property, capital gains and other sources .

What will happen if I don’t e-verify my income tax return ?

You are required to either e-verify your return or send it to CPC, Income tax department, Bengaluru within 120 days of filing of return, failing to do so will result in invalidation of return that means the return will be considered as never been filed. You can file a belated return if you have not verified your return in the stipulated time.

Can a buyer of a car claim TCS in his income tax returns?

Yes, the buyer of a car can claim TCS in his return. Any amount paid as taxes by the taxpayers can be verified with Form 26AS and can be claimed. If no taxes are required to be paid while filing the return, you can claim TCS refund from the government.

What if I have forgotten my user ID of the E-filing Website?

Default User id for income tax E-filing Website is your PAN no. if you have forgotten your password, you can reset it by clicking on forgot password link provided on the login page itself and follow the steps.

Do I need to file the balance sheet with the income tax return in India?

If you have income from business and filing ITR-4 form, only certain disclosures are required, not the complete Balance sheet like sundry debtors, sundry creditors, stock and cash in hand.