An Overview of What is Income Tax E-Filing

The Indian Government charges income tax from individuals earning above a specified amount. Each taxpayer must file an ITR (Income Tax Return) every year if their total income exceeds a set threshold or if they fall into a category where ITR filing is mandatory under the Income Tax Act, 1961. Thanks to the easy online filing procedure, taxpayers can now submit their ITR online in a few minutes. The process of submitting an ITR over the Internet is called income tax e-filing. It allows them to submit ITR from the comfort of their home by simply registering on the e-filing website. 

Here is an overview of what income tax e-filing is and how it is advantageous. 

Table of Contents

What is Income Tax E-Filing?

Income tax e-filing is the process of submitting the Income Tax Returns electronically. It stands for electronic filing, and one may complete the process from their comfort zone through the income tax website. All taxpayers can use the method to declare their income and expenses during a financial year. The electronic return filing process offers taxpayers security, convenience, and speed while reducing the income tax department’s burden. All in all, it is an advanced and sophisticated alternative to conventional ITR filing.

Benefits of Income Tax E-Filing

Income Tax e-filing offers multi-faceted benefits, including the following:

  • Quick Processing: Submitting an online ITR is fast, leading to faster acceptance and quicker refund processing.
  • Enhanced Accuracy: The e-filing portal with electronic connectivity and built-in validations has minimal chances of errors. Conversely, paper-based ITR filing based on self-calculations is more prone to mistakes. Moreover, handling the electronic system has less likelihood of human error during data entry.
  • No Time and Place Constraints: Since the e-filing portal is accessible 24/7, users can file their returns at any time from any place according to their convenience.
  • Better Security: The electronic filing process is safer than traditional filing. With paper-based filing, the taxpayer’s identity information lies in files, which is easier to pass from one individual to another, making them susceptible to theft and fraud. The online filing process keeps the data protected through advanced security systems, minimising the risk of fraud or theft.
  • Easy Access to Data: The e-filing portal securely stores the taxpayer’s data, allowing them to access it whenever necessary for subsequent return filing. 
  • Good for the Environment: The income tax electronic filing process is environmentally friendly. While the paper-based filing process involves multiple copies of forms and documents, the digital filing process requires no or minimal paperwork.

Modes of ITR Filing

Taxpayers can use any of these four modes to file Income Tax Returns:

  1. Electronic Filing with Digital Signature: In this method, taxpayers can use their digital signatures to sign the electronic file. It saves time by eliminating the need to visit the department office for ITR filing. 
  2. Electronic Filing without Digital Signature: Taxpayers without a digital signature must print out a single-page receipt and verification form, called ITR-V, after filing their return. Then, they must send it to the CPC Centre through post within 120 days.
  3. Manual Filing: Those not comfortable with the digital system of advance tax payment online may use the traditional method of paper-based return filing.
  4. E-Return Intermediary: A taxpayer may file the ITR through an agent, firm, or chartered accountant who completes the e-filing process and submits the receipt at the income tax counter.

Steps to File ITR Online

Follow these steps for income tax e-filing:

  • Visit the e-filing website.
  • Register or Log in using the PAN or user ID, password, and captcha code.
  • Click ‘Income Tax Return’ in the ‘e-File’ menu to file the return.
  • Enter the necessary details, including the assessment year, ITR Form Number, Filing Type, and Submission Mode.
  • Select ‘Online’ under the mode of filing and click ‘Proceed’.
  • Select the status, such as Individual, HUF, or Firm/ LPP.
  • Select the appropriate ITR form and fill in the required details.
  • Get a summary of tax computation, preview and submit the ITR.
  • Click ‘Proceed to Validation’ and e-verify within 120 days.

Taxpayers can now file their income tax returns electronically with the income tax department portal. The process is much simpler and faster than the traditional paper-based method. After understanding the online ITR filing process, you can file your ITR online at your convenience while minimising errors.

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