Income Tax E-filing in India

Income tax e-filing is a seamless way to file your tax returns online without the hassle of paperwork or long queues. The process involves registering on the Income Tax Department’s e-filing portal, selecting the applicable ITR form, entering income details, claiming deductions, verifying tax liability, and submitting the return electronically.

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Filing income tax returns is not just a legal obligation but also a crucial financial practice. It ensures accurate income reporting, helps claim deductions, and contributes to economic growth. With digital advancements, income tax e-filing has become quick, secure, and convenient. This blog provides a step-by-step guide on how to file ITR, highlights its benefits, and outlines common mistakes to avoid.

What is e-Filing?

Electronic filing, also known as e-filing, refers to completing the online tax filing procedure for a particular assessment year. E-filing income tax returns eliminates the need to visit any office to file the returns physically. You simply log in to the e-filing website and complete the entire procedure within a few minutes.

How do you complete the e-filing of Income Tax?

The process for income tax e-filing in India is very simple and quick. Here are the steps to follow:

Completing Registration

To register on the e-filing portal, you will require your Permanent Account Number (PAN), date of birth, and name. The PAN is your user ID, and you need to provide a password.

Choosing the Relevant Form

There are several forms on the e-filing website, and you need to choose the one relevant to your requirements. Here are the available forms:

ITR 1 is for individuals with an annual income of up to ₹50 lakhs from salaries and house property
ITR 2 is for individuals and Hindu Undivided Families (HUF) not having any proprietary business income
ITR 3 is for individuals and HUFs earning proprietary business income
ITR 4, also known as Sugam, is used for presumptive earnings from business and profession

Filling the Form

The relevant ITR form may be completed either online or offline. You may download the form and save it to your computer. Once you complete filling out the form, you may upload it on the e-filing website.

Acknowledging and Verifying

Once you upload the ITR e-filing form, you will receive Form ITR-V. If your Aadhaar details are not linked, a physical copy of this form must be sent to the CPC in Bengaluru within 120 days from the date of filing.

Refund

When your TDS exceeds the total tax liability, you are eligible for a refund. You need to provide accurate bank details to ensure that the refund is received without any delays. You may also check the refund status online.

Types of E-Filing of Income Tax Returns

Having understood the benefits of IT return e-filing, let’s take a look at the different ways to complete this procedure:

Use a Digital Signature Certificate (DSC), which is a convenient way to sign your documents electronically.
Generate the Income Tax Return-Verification (ITR-V), which must be signed and sent to the Central Processing Center (CPC) in Bangalore within 120 days from the filing date.
Verify the ITR return online using your Aadhaar number. In this case, you do not require the ITR-V.

Eligibility Criteria for e-Filing

As a responsible citizen, it is the duty of every citizen to file ITR online. Still, the government has set some guidelines for those who are eligible for e-filing of income tax returns. For instance, the ITR-1 form is applicable to resident individuals who meet the following criteria.

Total income for the financial year must not exceed ₹50 lakhs.
Income should be derived from specific sources. This can include salary, a single house property, agricultural income (up to ₹5000/-), family pension income, and other sources such as interest earned from savings accounts, deposits (post office/bank/cooperative society), income tax refunds, any other interest income, and family pension.
Additionally, suppose the spouse’s income (excluding those covered by the Portuguese Civil Code) or the income of a minor is within the specified limits mentioned above. In that case, it can be clubbed with the individual’s income.

Documents Required for e-Filing

Just like traditional paper-based filing, e-filling ITR also requires certain documents to be submitted to complete the process successfully. These documents serve as evidence, support the information provided, and ensure compliance with legal and regulatory requirements. Understanding the documents required for e-filing is essential to ensure a smooth and hassle-free experience.

General documents such as bank account details, PAN card, and ADHAR card.
Salary-related documents such as salary slips, rent receipts if you claim a house rent allowance, Form 16, Form-16A, Form-16B, Form-16C, and Form 26AS
Documents of any deductions and exemptions, which can include home loan details, insurance premium payment receipts, income from capital gains, and proof of dividend, rental, and foreign income.

Why Should You File an Income Tax Return?

Filing an ITR (Income Tax Return) is an important financial obligation that individuals have to fulfill for several reasons. For instance, it can be beneficial for claiming refunds and can improve your creditworthiness. Let us take a look at other reasons that make ITR filing beneficial for individuals:

Legal Requirement

It is a legal requirement in many countries, including India, for individuals with taxable income to file an income tax return. Failure to fulfill this requirement can result in penalties, fines, and legal consequences.

Determining Tax Liability

Filing an income tax return allows you to calculate your tax liability accurately. By reporting your income and claiming eligible deductions and exemptions, you can determine the amount of tax you owe or the refund you are entitled to receive.

Claiming Refunds

If you have paid more taxes than necessary through tax withholding or estimated tax payments, filing a tax return is necessary to claim a refund. This is particularly relevant if you have eligible deductions, credits, or exemptions that can lower your taxable income.

Documentation of Financial Activities

Filing an income tax return serves as an important record-keeping practice. It provides a documented record of your financial activities, including income sources, deductions, and exemptions. This can be useful for future reference, financial planning, loan applications, and other financial transactions.

Compliance and Avoidance of Penalties

Filing your tax return demonstrates compliance with tax laws and helps you avoid penalties and legal consequences. Even if you do not owe any taxes, filing a tax return within the prescribed deadline is essential to stay in good standing with the tax authorities.

Financial History and Creditworthiness

Your tax return and financial history are often used by financial institutions, lenders, and creditors to evaluate your creditworthiness. Consistently filing your tax returns and maintaining a clean tax record can positively impact your ability to secure loans, mortgages, and other financial opportunities.

Government Benefits and Programs

Many government benefits, grants, and social security programs require individuals to submit their tax returns to determine eligibility. Filing your tax return can ensure that you have access to these benefits and avoid potential delays or complications.

Benefits of E-Filing Income Tax Returns

Filing your income tax returns on time has several benefits. It ensures that you do not pay huge penalties. Here are some benefits of online income tax e-filing:

Refund Requests

Some part of your income, whether as a salary or business earnings, is deducted at source. Section 80C and other sections of the Income Tax (IT) Act provide tax benefits when you invest in certain types of financial products. When you invest in these instruments, the actual tax liability may be lower than what is deducted. Therefore, you need to avail yourself of a refund, which is possible only when you file your ITR in a timely manner.

Visa

When you travel abroad, in most cases, you require a visa. Foreign countries often require you to provide your income tax returns for the last few years at the time of visa application. Therefore, when you file your ITR in time, the process of procuring a visa becomes easier.

Credit Card

When you apply for a credit card, the issuer checks if you are able to pay the bills without any delays. The ITR is proof that shows your annual income. When you file your income tax returns regularly, you may be able to enjoy a higher limit on your credit card.

Loans

Every lender requires proof of filed ITR when you apply for any type of loan. These returns are necessary to enable the lenders to know your earnings, thereby determining your repayment capabilities. Lenders may reject your application if you do not file your ITR on time.

Loss Adjustment

Income tax laws allow individuals to carry forward losses that may be set off against future taxable earnings for up to eight consecutive years. To take advantage of this provision, you need to file your ITR for every assessment year.

How to Check Income Tax e-Filing Status

Tracking the status of your income tax e-filing is a simple process that can be done through the Income Tax Department’s official portal. There are two primary methods to check your status through which you can keep track of your income tax e-filing status and ensure that your returns are processed smoothly:

1. Using the Acknowledgment Number

Visit the Income Tax e-filing portal: https://www.incometax.gov.in/iec/foportal.
Click on ‘Income Tax Return (ITR) Status’.
Enter your PAN, acknowledgment number, and captcha code, then hit ‘Submit’.
Your ITR status will be displayed instantly.

2. Using Login Credentials

Log in to your e-filing account on the official portal.
On your dashboard, select ‘View Returns/Forms’.
Choose ‘Income Tax Returns’ and the relevant Assessment Year from the dropdown menu.
Click ‘Submit,’ and your filing status will be shown.

New Rules for Income Tax e-filing

With the introduction of the Union Budget 2025-26, several key changes have been made to the income tax structure, making tax filing more streamlined and taxpayer-friendly. The latest updates aim to simplify compliance, provide greater flexibility, and enhance the ease of filing returns.

One of the most significant updates is the revised tax exemption limit. Under the new tax regime, individuals earning up to ₹12 lakh annually are now exempt from income tax. Additionally, the time limit for filing updated income tax returns has been extended from two to four years, giving taxpayers more flexibility in correcting past filings.

Filing ITR Using Aadhaar Instead of PAN

Taxpayers can continue to file their income tax returns using Aadhaar if they do not have a Permanent Account Number (PAN). The process has been further simplified, with Aadhaar-linked taxpayers automatically assigned a PAN for tax-related transactions. This integration enhances verification and reduces redundancy in documentation.

Mandatory PAN-Aadhaar Linking

PAN-Aadhaar linking remains compulsory for all taxpayers. Failure to link the two within the stipulated deadline will result in restrictions on filing income tax returns. Additionally, with new updates in tax administration, the linking process is now more seamless, ensuring compliance with minimal hassles.

Common Mistakes Made While E-Filing Income Tax

While e-filing income tax can be convenient and efficient, people can still make mistakes while doing so. Let us have a glance at common mistakes made while income tax filing:

Incorrect Personal Information

It is crucial to provide accurate personal information, such as name, AADHAR number, and address. Even a small error in this information can lead to issues with the processing of your return.

Filing Under the Wrong Status

Choosing the wrong filing status, such as single instead of married filing jointly, can result in incorrect tax calculations and potentially lead to underpayment or overpayment of taxes.

Errors in Income Reporting

Ensure that you report all sources of income correctly, including wages, self-employment income, investment income, and other taxable earnings. Failing to include income or reporting incorrect amounts can trigger an audit or result in penalties.

Inaccurate Deductions and Credits

Taxpayers often make mistakes when claiming deductions and credits. It Is essential to understand the eligibility requirements for each deduction and credit and to report the expenses or circumstances that qualify accurately.

Forgetting to Sign the Return

One of the most common mistakes is neglecting to sign the e-filed tax return. A digital signature is required for electronic filing, and failure to provide one will lead to the rejection of the return. Make sure to follow the instructions for signing your e-filed return.

Incorrect Bank Account Information

If you are expecting a tax refund and choose direct deposit, double-check your bank account information to ensure it is entered correctly. Entering the wrong account or routing number can result in delayed refunds or funds deposited into someone else’s account.

Failing to Reconcile Advance Payments

If you received prior payments of the Premium Tax Credit or the Child Tax Credit, it’s crucial to reconcile those amounts when filing your tax return. Neglecting to do so can lead to discrepancies and potential issues with your tax return.

Ignoring Electronic Filing Errors

After submitting your e-filed return, you may receive an error message indicating a problem with the filing. It is important to address these errors promptly and make any necessary corrections before the filing deadline.

To avoid these mistakes, it is recommended to double-check all information entered into the tax software, use reputable tax preparation software or seek professional assistance, and review your return before submitting it electronically.

Next Step After You Have e-Filed Your Income Tax Returns

Most people are unaware of what needs to be done after the ITR is filed. As mentioned in this blog, you will receive an acknowledgment through the ITR-V, which needs to be verified. If your Aadhar is linked, you may self-verify the same using an Electronic Verification Code (EVC) received on the registered mobile number. Alternatively, you need to send the ITR-V to the CPC within 120 days from the date of filing the returns.

Wrapping It Up

E-filing income tax returns have revolutionized the process, making it convenient, efficient, and accessible for individuals. Contrary to the misconception that filing returns requires more time and effort, e-filing allows individuals to complete the procedure electronically with just a few clicks. By embracing this new-age technological development, individuals can easily fulfill their financial obligations, optimize their tax liabilities, and enjoy the benefits that come with timely and accurate tax filing.

FAQs on Income Tax E-Filing

What documents are needed for e-filing income tax?

You need essential documents such as your PAN, Aadhaar, Form 16 (for salaried individuals), and bank statements. Additional documents like TDS certificates, investment proofs, and details of capital gains, rental income, or business income may also be required. Keeping these documents ready ensures accurate filing and helps claim eligible deductions.

How can I register for income tax e-filing?

To register, visit the Income Tax e-filing portal and click on ‘Register’. Enter your PAN, select ‘Taxpayer,’ and provide personal details such as name, DOB, and contact information. After verifying via OTP, set up a password to complete the registration process.

What is the deadline for filing income tax returns online?

The standard deadline for filing income tax returns is July 31st of the assessment year. However, the government may extend the due date in specific situations. It is advisable to file returns before the deadline to avoid penalties and ensure smooth processing.

Can I file my income tax return after the due date?

Yes, you can file a belated return if you miss the original deadline, but it must be done before December 31st of the assessment year. Late filing may attract penalties and interest on any unpaid tax amount. Additionally, certain tax benefits and loss adjustments may not be available for belated returns.

What is the penalty for late income tax filing?

If you file after the due date but before December 31st, a late fee of ₹5,000 is applicable. However, for taxpayers with an income below ₹5 lakh, the penalty is reduced to ₹1,000. Filing after December 31st is not allowed unless an extension is granted.

How do I check the status of my e-filed income tax return?

To check your ITR status, log in to the Income Tax e-filing portal and navigate to the ‘View Returns/Forms’ section. Select the relevant assessment year and submit the request to view your return’s current status. You can also track it using your PAN and acknowledgment number without logging in.

What is the difference between ITR-1, ITR-2, and other ITR forms?

Different ITR forms apply based on income sources and taxpayer categories. ITR-1 is for salaried individuals with income up to ₹50 lakh, while ITR-2 is for those with capital gains or foreign income. Business owners and professionals must file ITR-3, whereas small businesses opting for presumptive taxation use ITR-4. Choosing the correct ITR form ensures proper tax filing and compliance.

How do I select the correct ITR form for e-filing?

The selection depends on your income type, such as salary, business profits, capital gains, or foreign income. Reviewing the Income Tax Department’s guidelines can help determine the appropriate form. If unsure, consulting a tax expert is advisable to avoid errors.

What is the process for filing income tax returns online?

To e-file your income tax return, log in to the Income Tax Department’s portal and choose the correct ITR form. Enter details related to income, deductions, and tax paid, then review your tax liability. After submitting the return, complete the e-verification process using Aadhaar OTP, net banking, or a digital signature. Once verified, your return is successfully filed, and any eligible refunds will be processed accordingly.

Can I revise my e-filed income tax return?

Yes, if you find errors in your submitted return, you can revise it before December 31st of the assessment year. The revised return must include corrected details, and it replaces the previously filed return. It is recommended to rectify mistakes promptly to avoid tax complications.

How long does it take to get an income tax refund after e-filing?

Income tax refund is typically processed within 20 to 45 days after successful verification of the return. The refund amount is credited directly to the taxpayer’s registered bank account. Delays may occur due to discrepancies in return details or pending verifications.