Income Tax Returns Filing for FY 2022-23 (AY 2023-24) is crucial for individuals and businesses to fulfil their tax obligations. This process involves reporting income, claiming deductions, and calculating tax liabilities per the latest tax laws and regulations. By filing returns accurately and on time, taxpayers can avoid penalties, maintain compliance, and ensure a smooth financial journey for the upcoming assessment year.
Introduction
Tax returns enable taxpayers to declare their income, expenses, investments, taxes, tax deductions, etc. The Income Tax Act of 1961 requires taxpayers to file income tax returns under various scenarios.
Tax returns are forms filed by taxpayers to report their income. There may be other reasons to file an income tax return even without payment, such as carrying forward losses, claiming a tax refund, or deducting taxes.
Income tax returns can be electronically filed (e-filed) with the Income Tax Department. Keeping the documents for calculation and reporting data in ITR is necessary before discussing the steps involved in e-filing income tax returns. Discover how to file ITR for AY 2023 in this article.
Did You Know? British Indian government's first finance minister, James Wilson, introduced a tax system in India. James Wilson introduced income tax in India in 1860.
What Is Income Tax?
The income tax is a fixed amount of the total income you pay to the government. According to their total income, the taxpayer pays this tax. Individuals, partnerships, HUFs, corporations, etc., are all subject to income tax. The government announces tax slabs annually as part of its annual budget.
A person whose income exceeds the exemption limit, ₹2 lakhs for the old tax regime or ₹3 lakhs for the new tax regime, must file an income tax return.
It is mandatory to file an ITR if you meet the following criteria:
- A person under 59 years with an annual income of over ₹2.5 lakhs.
- You shall request a refund if you believe too much tax has been deducted or is incorrectly paid.
- Having foreign assets or being a signatory to foreign accounts.
- Expenditures for foreign travel exceeding ₹2 lakhs per year.
Filing an ITR - Online and Offline
In India, income tax return filing is mandatory if an individual's income is above the exemption limit of ₹2 lakhs under the old tax regime and ₹3 lakhs under the new tax regime. As well as applying for loans, applying for VISA, and applying for credit cards, an ITR is required.
How to File ITR?
Online or offline ITR filing is available. Follow the below-mentioned steps to complete your income tax return offline.
Offline Mode
Step 1: Log in to the income tax portal at https://www.incometax.gov.in/iec/foportal/. Visit the Downloads section to download the Java utility file for the ITR form.
Step 2: Extract and save the files offline using the zipped file so you can complete the form correctly.
Step 3: Get the utility running by installing the .exe file.
Step 4: After clicking continue, you will be directed to a page with three options for income tax returns.
Step 5: In most cases, you can file your ITR, edit a previously completed draft, import prefilled information, such as PANs, names, etc., and then start filling it out.
Step 6: From one form to another, save and validate.
Step 7: There are three options available when you click on file returns:
- Using the e-filling website, you can download any prefilled data,
- Alternatively, you can import it from the local system and proceed from there. Or,
- If you have already filled out an ITR draft, you can edit it.
Step 8: Next, enter your PAN and assessment year. Your login page will appear once you have filled in the form. Prefilled data is available after logging in. Click on the file return button now.
Step 9: Select your status and the appropriate ITR form. When ready, click "Let's get started" and confirm your return. Then click "Proceed."
How to File ITR Online?
Step 1: You can access the IT e-Filing portal by using your PAN as your User ID and entering the password and captcha. You must register if you are visiting the site for the first time.
Step 2: Select the "e-file" tab and click on the Income tax return.
Step 3: After completing the assessment year and ITR form, click the "prepare and submit online" button.
Step 4: During the next step, you can choose whether to file your returns online or offline. Using the former method, in this case, is recommended.
Step 5: You can file your ITR as an individual, any other entity or Hindu Undivided Family (HUF).
Step 6: Please select the ITR you wish to file. A person or HUF without a business or professional income can file an ITR 2. It is also possible for individuals to file ITR1 or ITR4, depending on their circumstances. Here, click 'Proceed with ITR1'.
Step 7: Next, you'll have to give a reason for filing an ITR, so make sure you pick suitable options.
Step 8: If you've filed an ITR previously, you can import the prefilled data by selecting the details you want to auto-fill.
Step 9: You must match your applicable income with forms such as AIS, 26AS, and Form 16, including your salary, capital gains, etc.
Step 10: Click "Preview and submit" after calculating the tax to be paid.
Step 11: To verify the return, click "submit" to upload your ITR and use an OTP on an Aadhar-linked mobile or EVC through your bank account details.
Step 12: Send a physical copy to the CPC (Central Processing Centre) if verification fails.
How to Download ITR?
The below steps will allow you to view your ITR filed online as well as its acknowledgement in pdf format:
Step 1: Using your login ID and password, Please log in to the IT portal https://www.incometax.gov.in/iec/foportal/.
Step 2: Click the Forms/Returns view tab.
Step 3: To view the file of filed ITRs, select the correct assessment year and the income tax returns.
Step 4: Select ITR-V for the required ITRs by clicking the acknowledgement number tab.
Step 5: You can open and download the ITR-V file as a PDF file.
Step 6: Dropdown boxes allow you to select the right return and fiscal year to file your income tax. Ex: ITR1, ITR2 etc.
Overview of IT Saving Types – Under Old or New Tax Regimes
You can save income tax by using tax planning and online apps. There are certain exemptions and deductions under the Income Tax Act of 1962. You will save taxes by lowering your total taxable income.
The following are tax-saving heads.
1. Public Provident Fund (PPF)
PPF is a 15-year tax-saving instrument the government offers that pay tax-free interest of 8% every quarter. The service is available at all post offices and banks.
2. ELSS Mutual Funds
These funds allow you to invest up to 80% equity with a three-year lock-in. When long-term capital gains exceed the exemption of ₹1 lakh, the returns are subject to LTCG tax of 10%.
3. 5-Year Tax-Saver FDs
This allows a maximum deduction of ₹1.5 lakhs from your taxes because they bear 7 to 8% taxable interest.
4. EPF Payments
As per Section 80C, they are subject to a total exemption limit of ₹1.5 lakhs, 12% of basic pay.
5. Tuition Fee Payments
Children's tuition is tax-free, up to a limit of ₹1.55 lakhs per year for dependent children.
6. Life Insurance Premiums
In the case of term and endowment insurance policies, ULIPs, etc., the amount covered exceeds ten times the premiums paid.
7. National Saving Certificate (NSC)
The five-year maturity period and the fixed interest rate are 8%. Under S80C, it is part of the total exemption.
8. NPS-National Pension System
It is calculated under Section 80CCD added to the exemption limit of ₹1.55 lakh. These deductions are more than the ₹50,000 exemption allowed by U/S 80CCD(1B).
9. SCSS - Savings in the Senior Citizens Scheme
It is available after the age of 60 and has a five-year term. Rates are higher than usual and taxable by 0.5 to 0.75%.
10. SSY-Sukanya Samriddhi Yojana
SSY is a benefit for parents of girls under ten who invest. If the girl marries or reaches 18, she is eligible for tax-free interest on her loan for 21 years.
11. Health Insurance Premiums
Health insurance premiums that exceed the insurance premium limits can be deducted by ₹25,000 under section 80D. For senior citizens, the limit is ₹50,000. By paying premiums for yourself and dependent senior citizens, you can avail yourself of up to ₹75,000 in discounts.
12. NPS
Equity and debt pension funds are tax-exempt up to ₹50,000 under Section 80CCD(1B). Under section 80CCD (2), employees can deduct up to 10% of their salary and 14% if they work for the government.
13. Rent Deductions
Rental payments are eligible for deductions and can be deducted up to ₹60,000 per year. Renters who get HRA can deduct the whole amount.
14. Home Loan Repayments
There is an exemption of up to ₹1.5 lakhs for repayment of the home loan principal.
An interest certificate from the bank u/s 24 of the IT Act is required for annual deductions of up to two lakhs.
15. Charitable Donations
There is no upper limit to this. NGOs with an 80G certificate are exempt from paying taxes on 50% or 10% of the adjusted total income donated to them.
16. Savings Account Interest
The amount is tax-deductible up to ₹10,000 per year under section 80TTA. Senior citizens may earn interest on FDs and SM accounts up to a limit of ₹50,000.
Conclusion
Whether you're filing an IT return online or offline, it can be stressful if you're not a commerce expert. Following the above steps makes filing your ITR for the AY 2023-24 easy without external assistance.
Furthermore, it is a simple job if one understands and completes the filing process on time. The Income Tax Department of India uses Income Tax (IT) returns for reporting and paying taxes on your income.
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