written by Khatabook | October 26, 2021

How To Generate Income Tax Return XML File

Every year the date for filing of returns usually is July 31st. However, the COVID 19 pandemic led to the deadlines being extended to September 30th 2021 and again to December 31st 2021. The salaried class therefore has now time to focus on their Income Tax Returns or ITR for the financial year (FY) 2020-2021 or the Assessment Year (AY) 2021-2022. Read on to find more about the steps to generate your Income Tax Return XML file?

What is ITR XML file?

ITR XML is basically a file format. So, what is ITR XML file in income tax? This is a format for filing Income tax returns. When a filing is done offline and is required to be submitted online, it becomes easier to upload it by converting it into XML format. 

The IT Department has introduced a new portal with a JSON utility that provides the IT taxpayer with all information on how to create ITR XML file with pre-filled information to validate it. To file all sources of income, full disclosure is of key importance. The XML file for ITR utility is enabled to track your Form 16, share market transactions, interest incomes and other such crucial sources of income. They can then disclose any further income sources or changes and file the return. If your return is incomplete, an automatic system generated issue of notice U/S 143-2 follows.

The ITR XML returns forms and penalties

The ITR forms have different return forms and ITR XML files for different people. Choosing the correct form is crucial, as the ITR XML format return will be invalid if the wrong form is chosen. The salaried class use the ITR-1 and 2 forms. For those with income up to Rs 50 lakh and owning one house, the ITR-1 is to be used, while those with more than one house property should file ITR-2 and the ITR2 XML file in offline method.

You can be penalised if you don’t file your income tax XML file or ITRs as required under the law. The under-reported income and tax are now assessed with a penalty of 50% of the income. Serious discrepancies and misreporting of income incur 200% of the under-reported income penalty. Further, if the tax due is Rs 1 lakh or more and self-assessment tax is unpaid by 31st of July 2021, interest is levied on the tax dues.

Methods of filing returns

Th e ITR XML file format filing can either be in the offline or online modes. The offline method means you need to know how to generate XML file for ITR, download your ITR and fill in relevant details in the Java format or Excel sheet. The online method means you log in to the Income Tax portal, fill in the information pertinent to auto-populate the form chosen, fill it and submit it. You can then log into the portal, fill in the PAN, and other information, generate the XML file and then attach or upload  your ITR.

The filing of returns process can be  a bit complex. Those filing the ITR-1 and 4 may fill the forms online, while those using ITR 2, 3 must use the offline method mandatorily using the ITR 2 XML and the ITR-4 XML files. ITR-1 and 4 can also be filed offline using XML file in ITR. 

How to create XML file for ITR?

The ITR XML file download is in an XML format used by the portal for the ITR form. ITR XML file is enabled by a machine language (ML) that enables the file to automatically populate, distribute itself to the online repositories and integrate with the IT Department’s portal. Using the offline method makes it easier to enter and upload the form in XML format. This means you have to convert the java format or Excel sheet to the XML format or generate the ITR XML file before submitting your returns.

Also Read: Section 80GG - Claim Deduction for Rent Paid

Filing process of XML file returns

The filing process steps involved, let’s say, for the ITR-2, are detailed below:

  • Firstly, go to the e-filing portal of the Income Tax Department available at www.incometaxindiaefiling.gov.in and log in using your PAN and password.
  • Next, choose the ‘Download’ tab or section of the website’s home page.

  • Now, choose the AY or assessment year for filing returns and choose the ITR-2 form (applicable based on your income sources type) in the FY or financial year. This file is called the offline utility file.

  • The offline utility or the ITR 2 XML file download you just downloaded has a ‘Pre-fill’ tab that pre-populates all your personal information, TDS details, tax details, income details and so on. Verify the same and fill in any missing information.
  • Once the filling up is done, click on the ‘Calculate’ tab to automatically calculate the interest liable to be paid and the tax liability. In case you have to pay taxes, you will get the difference between the self-assessment tax paid and the actual tax liability. If the tax paid exceeds your liability, you will get a tax refund.
  • At this point, save changes by clicking on the ‘Save’ button and then use the ‘Generate XML’ option by clicking on the tab. Save this generated XML file to any location on your computer, like the desktop etc., for better access in filing the ITR.

  • Just to check if your information is correct, open the saved XML on your system and re-verify your information’s accuracy.

  • Finally, go to the portal, log in to your e-filing account, and upload the XML file saved after the XML file generation.

Congratulations, you have completed filling your ITR!

Which ITR form to choose?

The table below can help you choose the right ITR form to file:

Form

Who should use it?

ITR-1

For a resident Indian individual with upto Rs 50 lakh total annual income from all sources and one house property including agricultural income of Rs.5,000.

ITR-2

For HUF or Hindu undivided families and individuals who have no income from gains and profits of the profession or business, and those ineligible to file ITR-1.

ITR-3

For HUFs and individuals with income from gains and profits from profession or business.

ITR-4

For HUFs, firms, and resident individuals with annual income up to Rs.50 lakh and professional or business income U/S 44ADA, 44AD, 44AE.

ITR-5

For limited liability partnerships (LLPs), Firms, body of individuals (BOIs) and association of persons (AOPs).

ITR-6

For all companies under Companies Act 2013 and 1956 excluding companies with income from charitable or religious properties.

ITR-7

For those who must furnish returns, U/S 139(4B), 139(4A), 139 (4D), 139(4C).

Preparations required when filing the ITR

Before generating the ITR XML file for filing ITR, you should keep handy all necessary documents. For instance, Form 16 or 26AS, salary slips, updated bank passbook, investments proof, loan papers, insurance documents, rent receipts, and any other document required to file your ITR.

How to file in the offline method?

The process of offline filing is explained on the IT Department’s portal (www.incometaxindiaefiling.gov.in) and involves the following steps:

  • Firstly, download the required ITR form, fill it, save the XML file generated to your system, and then upload it after logging in to the IT Department’s portal and your account.

 

 

  • For e-filing and using this method, the taxpayer should also download an ITR utility from the portal, the Java Utility or the Excel Utility. The procedure to download the utility is to choose the download section on the home page and download the correct utility. You can use the path 'Downloads > IT Return Preparation Software'.

  • Once downloaded, extract the zipped files to your system and extract the Utility file.  You can also use the ‘Read me” file extracted for more information like system requirements etc.

  • Next, open and fill in the mandatory fields of the ITR. The prefilled XML file populates the required information.

  • Verify and validate the information under all sections of the ITR form and click on calculate tax.
  • Generate the XML file and save it.
  • Login again using PAN and password, verify captcha and click on log in. Use 'e-File' and the 'Income Tax Return' links. The system uses the PAN to populate, and you need to select AY, ITR form Number, Filing Type Original/Revised, submission mode “Upload XML”. 
  • Click on the 'Continue' tab and attach the XML file.

  • Submit the ITR.
  • After submission, verify your ITR by choosing the Differential Scanning Calorimetry (DSC) method, Aadhar OTP, or the EVC methods from a pre-validated bank account or send a physical copy to the CPC. You can also view the uploaded and submitted ITR form on the portal.

Also Read: How to Claim Relief Under Section 89(1) On Salary Arrears

Online method

This method is simple, and data can be directly filled on the e-filing portal and submitted. ITR 1, 4 can be submitted both offline and online. 

The process steps are:

  • Go to www.incometaxindiaefiling.gov.in, the IT portal.
  • Log in using your PAN, Password, Captcha verification and then the 'Login' tabs.
  • Choose the 'e-File' menu and 'ITR or Income Tax Return' links.
  • Click 'Continue', read the instructions, fill in the forms and save your work regularly using the save tab.
  • Click submit, and you are done.
  • Choose a verification option and verify the returns.

Conclusion

The above article explains the importance of filing your ITR within the specified date. The two methods, namely the offline and online methods, can be used to file ITR. In the offline method, you will need to generate the XML file and use it to file your ITR. We hope we have conveyed this overall process of filing ITR XML in a simple method. 

Having trouble with filing ITR or Income Tax Returns? Download the Khatabook app for more information related to ITR filing, business and accounting tips and more.

FAQs

Q: What do I need to file my ITR?

Ans:

Before generating the XML file for filing ITR, you should keep handy all necessary documents like Form 16 or 26AS, salary slips, updated bank passbook, investments proof, loans papers, insurance documents, rent receipts, and any other document required to file your ITR.

Q: What are the present penalties levied for failure to file ITR?

Ans:

You can be penalised if you don’t file your income tax XML file or ITRs as required under the law. The under-reported income and tax are now assessed with a penalty of 50% of the income. Serious discrepancies and misreporting of income incur 200% of the under-reported income penalty. Further, if the tax due is Rs 1 lakh or more and self-assessment tax is unpaid by 31st of July, interest is levied on the tax dues.

Q: Who should use ITR-7?

Ans:

ITR-7 is to be used by those who must furnish returns U/S 139(4B), 139(4A), 139 (4D), 139(4C).

Q: Who should use ITR-6?

Ans:

ITR-6 is used for all companies under the Companies Act 2013 and 1956, excluding companies with income from charitable or religious properties.

Q: Who should use ITR-5?

Ans:

ITR-5 is to be used for LLPs, Firms, BOIs and AOPs.

Q: Who should use ITR-4?

Ans:

ITR-4 is used for HUFs and individuals with income from gains and profits from a profession or business.

Q: Who should use ITR-3?

Ans:

ITR-3 is used for HUFs and individuals with income from gains and profits from a profession or business.

Q: Who should use ITR-2?

Ans:

ITR-2 is for Hindu undivided families (HUF) and individuals who have no gains and profits from their profession or business, and those ineligible to file ITR-1.

Q: Who should use ITR-1?

Ans:

ITR-1 is used by a resident Indian individual with a Rs 50 lakh total annual income from all sources and one house property, including an agricultural income of Rs.5,000.

Q: Explain the online method of filing IT returns.

Ans:

This method is simple, and data can be directly filed on the e-filing portal and submitted. ITR 1, 4 can be submitted both offline and online. 

The process steps are:

  • Go to www.incometaxindiaefiling.gov.in, the IT portal.
  • Log in using your PAN, Password, Captcha verification and then the 'Login' tabs.
  • Choose the 'e-File' menu and 'ITR or Income Tax Return' links.
  • Click 'Continue', read the instructions, fill in the forms and save your work regularly using the save tab.
  • Click submit, and you are done.
  • Choose a verification option and verify the returns.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.