How to File an Income Tax Return — Step-by-Step ITR Filing Guide

Anurag, who is a 28-year-old software engineer earning ₹8,00,000 a year, was submitting his first Income Tax Return (ITR). He carefully collected all the necessary documentation before starting. According to his Form 16, his employer had already deducted ₹60,000 as TDS. In addition, he found out that he had earned ₹5,000 in interest from his savings. 

The good news is that Anurag made some smart financial decisions over the year, allocating ₹150,000 to a PPF, ₹25,000 to health insurance, and ₹50,000 to interest on an education loan. Because of them, he was able to deduct ₹2,25,000 in total under Sections 80C, 80D, and 80E.

Anurag logged into the Income Tax e-filing portal and selected ITR-1 (Salaried Individuals). He entered the following details:
 

• Gross Salary: ₹8,00,000
   
• TDS: ₹60,000
   
• Interest Income: ₹5,000
   
• Deductions: ₹2,25,000
   

His total income subject to taxes was ₹5,75,000.00. According to the current tax slabs, ₹5,75,000 is subject to ₹19,500 in taxes. As ₹60,000 had already been deducted for TDS, Anurag was entitled to a ₹40,500 refund.

Who Needs to File Income Tax Returns?

The Income Tax Act of 1961 states that everyone whose total income is over the basic exemption limit must file an Income Tax Return (ITR). The exemption limits for the Fiscal Year 2023–2024 (Assessment Year 2024–2025) are:

• ₹2,50,000 for individuals below 60 years of age
   
• ₹3,00,000 for senior citizens aged between 60 and 80 years
   
• ₹5,00,000 for super senior citizens aged above 80 years

These limits apply under the old tax regime. Under the new tax regime, the basic exemption limit is ₹3,00,000 for all taxpayers, regardless of age.

Even if your income is below these thresholds, you may still be required to file an ITR if you meet certain criteria, such as:
 

• Foreign Assets or Income: Being a resident with assets or financial interests outside India, or having signing authority in foreign accounts.
   
• High-Value Transactions: Depositing over ₹1 crore in one or more current accounts, incurring expenses exceeding ₹2 lakh on foreign travel, or paying electricity bills over ₹1 lakh.
   
• Tax Deducted at Source (TDS): Having TDS or Tax Collected at Source (TCS) aggregating to ₹25,000 or more (₹50,000 for senior citizens).
   
• Business or Profession: Having a business or profession with a turnover exceeding ₹60 lakh (business) or ₹10 lakh (profession).
   
• Claiming Refund or Carrying Forward Losses: If you wish to claim a tax refund or carry forward losses.
   
• Applying for Loans or Visas: Financial institutions and embassies often require ITRs as part of their due diligence process.

Filing an ITR is not only a legal obligation but also beneficial for maintaining financial transparency and availing various financial services.

Documents Required for Filing ITR
 

• Start early: Avoid last-minute rush and portal glitches.
   
• Use Form 26AS + AIS (Annual Information Statement) to cross-check all reported incomes.
   
• Report all income, even if below the taxable limit (e.g., FD interest).
   
• E-Verify within 30 days of filing to complete the process.
   
• Use online calculators to estimate tax liability before filing.
   
• Keep copies of all supporting documents for at least 6 years.

Step-by-Step Guide to File ITR Online

Log in to the e-filing Portal
 

• Visit https://www.incometax.gov.in/iec/foportal/.
   
• Enter your PAN as the User ID.
   
• Input your password and the captcha code
  .
• Click "Login".
   

Go to 'File Income Tax Return'
 

• From the dashboard, click on e-File.
   
• Select "Income Tax Returns".
   
• Click on "File Income Tax Return".
   

Select the Assessment Year and ITR Form
 

• Choose the Assessment Year (e.g., 2024–25 for FY 2023–24).
   
• Select the appropriate ITR form (e.g., ITR-1 for salaried individuals).
   
• Choose the Filing Type:
   
  • Original Return
     
  • Revised Return
     
• Select "Online" as the Mode of Filing.
   
• Click "Continue".
   

Fill in the ITR Form
 

• The form will be pre-filled with details like your name, PAN, and contact information.
   
• Manually enter income details, deductions, and other required information.
   
• Click "Save Draft" periodically to avoid losing data.
   

Validate and Calculate Tax
 

• After entering all the details, click on "Calculate Tax".
   
• Review the tax computation.
   
• If there's any tax payable, proceed to make the payment.
   

Preview and Submit
 

• Click on "Preview Return" to review all entered details.
   
• Ensure all information is accurate.
   
• Click "Proceed to Preview".
   
• After reviewing, click "Submit".
   

Verify Your Return
 

• You must verify your return within 30 days of filing.
   
• Choose one of the following verification methods:
   
  • Aadhaar OTP: Receive OTP on your Aadhaar-linked mobile number.
     
  • Net Banking: Verify through your bank's net banking portal.
     
  • EVC: Generate an Electronic Verification Code.
     
  • ITR-V: Download, sign, and send the ITR-V form to the Centralised Processing Center (CPC) in Bengaluru within 120 days.

Common Deductions to Save Tax (Sections 80C, 80D, 80E, etc.)
 

Note: Under the previous tax system, these deductions were applicable. The majority of deductions are prohibited if you choose the new tax regime (Section 115BAC), except employer NPS contributions, 80CCD(2), and a few others.

How to Claim Tax Refunds (if applicable)?
 

Helplines:
 

Tips for First-Time Tax Filers
 

Conclusion

If you adhere to the official instructions as presented by the Income Tax Department, it is quite an easy procedure to file your Income Tax Return (ITR) online in India. You adhere to tax regulations and help in the growth of the country by registering on the e-filing portal, opting for the suitable ITR form, filling in your income and deduction information properly, and validating your return through any of the means available. Don't forget to submit your return timely to prevent interest and penalties.

Faqs
 

Q. Who is required to file an Income Tax Return (ITR)?

Anyone whose total income exceeds the basic exemption limit (₹2.5 lakh for individuals below 60) must file an ITR.

Q. Can I file ITR without Form 16?

Yes, you can file your ITR using salary slips, Form 26AS, and bank statements in place of Form 16.

Q. What happens if I miss the ITR filing deadline?

You may incur a late filing fee of up to ₹5,000 and lose eligibility to carry forward certain losses.

Q. Is it mandatory to link PAN with Aadhaar for ITR filing?

Yes, linking PAN with Aadhaar is mandatory for successful ITR filing and processing.
 

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