Filing your income tax return: A step-by-step guide

File your Income Tax Return and Avoid any delay and use this step by step guide to file your income tax return in time and avoid paying penalty of Rs.5000.

Filing your income tax return

1. Documents needed

Form 16/16A

• Form 16 is issued to salaried employees and 16A to professionals, usually between April-June
• Should preferably be generated via the TRACES website (TDS Reconciliation Analysis and Correction Enabling System)
• If you notice any errors, you should get it corrected as needed by the issuer at the earliest

Form 26AS

• Displays all payments (including salary income) made to you in the financial year and along with tax deducted and paid
• Includes entries from employer, client, bank / any other entity who has made a payment to you and deducted tax on it
• Includes any advance tax / self-assessment tax paid by you during the financial year
• Download from TRACES website, or your bank’s Netbanking website by clicking on “View Tax Credit Statement’

Statements of income and tax-saving investments

• Salary slips and Form 16/16A
• Income from dividends and sale of investments
• Income from sale of property and any other income earned by you during the year
• If salaried, you would have already given proof of tax saving investments to your employer
• Exceptions like donations to approved institutions can be included while filing returns

Expenses and Reimbursements

• If salaried, most reimbursements are already accounted by employer
• If freelancing or self-employed, part of some expenses like fuel, electricity, broadband can be claimed as a deduction
• Depreciation can be claimed on your computer / laptop / mobile / tablet, vehicles, any other devices used in business

You don’t need to actually submit these documents to the Income Tax Department while filing your income tax return – however, you should keep them handy in case there is a query during scrutiny of your return later.

2. Which ITR form to fill

Depending on your category as a taxpayer, there are different ITR forms. The most common forms for individuals are:

ITR 1 (SAHAJ)
For individuals being a resident other than not ordinarily resident having Income from Salaries, one house property, other sources (Interest etc.) and having total income upto Rs.50 lakh

ITR 2
For Individuals and HUFs not having income from profits and gains of business or profession

ITR 3
For individuals and HUFs having income from profits and gains of business or profession

ITR 4 (SUGAM)
For Presumptive Income from Business & Profession

Details of other ITR forms can be viewed on the Income Tax Dept website You should be careful to avoid these common mistakes while filing your income tax return.

3. Calculate tax liability / refund eligibility

If you have other income on which tax is payable beyond that subject to TDS, or expenses which you can adjust to claim a refund, calculate your actual tax liability for the year as you are filling in the ITR form itself, or use this calculator. If any additional tax is payable, you can pay it here as Self-Assessment tax.

4. Filing your income tax return

• Once your ITR form is completed, you can file it online (depending on ITR) or complete it offline
• Generate an XML file from it and save it on your computer
• Login to the Income Tax Department’s e-filing website or register if you’re a new user
• Upload the saved XML file to generate an acknowledgement, known as ITR-V

5. Verifying your income tax return

• Offline – download, print and sign ITR-V in blue ink, send it to CPC Bangalore within 120 days of filing your return
• Online – there are five ways of verifying your return online
  • EVC – 10 digit Electronic Verification Code generated at ATM, valid for 72 hours
  • Netbanking – After logging in, select ‘income tax e-filing’, select return to verify from IT site
  • Aadhaar OTP – If your Aadhaar number is linked to PAN and your mobile number is linked to Aadhaar
  • Verify via your pre-validated demat account
  • Verify via your pre-validated bank account