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Thursday, 05 July 2012 22:59

How to eFile Income Tax Return Online in India

Time is running out for paper returns. From AY2012-13 or from 1st April onwards online filing of Income Tax returns of those having income more than 10 lacs/year, has been made mandatory by Finance Ministry.

This is very good and is a win-win situation for all of us( especially those are educated).

Advantages of Filing Online

  1. Saved Forever: Your ITR is retained forever and you're saved from it getting destroyed, engulfed in fire, or due to earthquakes etc
  2. Accuracy: Electronic returns are accurate compared to paper returns since if you use any standard excel utility (or any private sites offering E-filing) from IT department, it does not allow you to input invalid values and does hundred's of checks and calculations automatically.
  3. Auto Calculation : Just key-in your income details in this excel utility it then automatically calculates the taxes saving your headache to know the calculation game every year.
  4. Easy & intuitive(file it from your PC): Yes, filling it easy and sometimes it can be completely guided - for example once I filled online through investmentyogi.com and it was very step by step guided form submission. In short it was easy.
  5. Reduce Errors by CA/Lawyers: If you depend on lawyers or CA's, remember they get huge number of IT forms in the last month of submission and they don't have time to look into detail in every application and there is good chance of making mistake in your form submission. The mistake could be very costly.
    • If it is some mistake, most likely you'll not come to know about it. Paper returns usually take 1 year for processing and by the time you get it, there is hardly any scope of correcting it. Moreover ultimately you only are responsible for all of their mistake.
    • If your return was forgotten to be filed in time then for example, in case of carry over of losses you can't file late returns. That means if yours is a business and you suffered a loss of Rs. 50 lacs and filed on 1st Aug. then you'll not be able to carry forward your loss of 50 lacs to be adjusted as short term/long term.
  6. Save on refunds : Usually lawyers/CA's charge 10% or so of refund amount but if you file electronically yourself, you save all that amount.

Ways to File Income Tax Online

There are two primary places using which you can file income tax online:

  1. You can file yourself at incometaxindiaefiling.gov.in which is the official income tax site for filing all tax returns. Remember during rush hour it is going to be down most of times and direct usage of it is not recommended( like booking Tatkal tickets using IRCTC).
  2. Secondly there are plenty of sites who charge you for filing income tax online. You simply key-in your information in guided tour which ultimately results in an electronic(XML) document which is filed at the official income tax site on your behalf. Some of popular ones are: Tax Spanner, Investment Yogi, Tax Smile etc.

Filing Income Tax Online using Private Online Sites

For filing at incometaxindiaefiling.gov.in government official site - skip here.

India came of age when e-filing was allowed by government 4-5 years ago. Many sites were launched to provide online filing of tax returns which include but not limited to : Tax Spanner, Investment Yogi, Tax Smile.

Advantages of Filing with them

  • Ready Help Available: Compare a person charging you a fee for guiding at Railway station than asking for a Rail employee at enquiry counter. So in case of issues, you'll have good amount of help available at those sites. Moreover chat/phone support will also be available to you. You can also pay for expert tax advice in their sites.
  • Step by Step Guided Tour: You need not walk in darkness, you're led to step by step input of your information in easy & understandable way
  • Autofiling: Yes they can file( your signed ITR-V) online at govt. income tax site for you, instead of you running helter skelter during peak times which government sites simply don't work.
  • Your information is saved for the next year: Yes when you visit the same site the next year whose services you'd used, your all personal information will already be available - which you need not fill. Also your last history will also be available.
  • Facility to track ITR-V status.
  • Reminder notifications: You get reminder notifications about your tax filing, due dates and other relevant updates applicable to you.
  • Support from tax experts: You can get your filing reviewed by IT Experts in their panel for a fees. Just by sitting in your home!

Filing with TaxSpanner.com

Let us consider how to file tax using TaxSpanner.com for example. If you visit this site you'll find the following menu:

Taxspanner menu

So it is offering plans of Rs. 249, Rs. 449, Rs.749 for individuals with different levels of services. Salary eFile plus gets you support from an income tax expert.

Let us say you opt for Rs. 249 plan then when you login and you select the product then the first page you'll need to fill will be this:

taxspanner---fill-details-page

Click the "+" symbols to expand and fill the information. Then you proceed to next step. There will be many such step-by-step pages you wade through and ultimately leading you to file your income tax return online.

Once InvestmentYogi offered me in 2009 free income tax filing online!

Filling & Filing Return Yourself at incometaxindiaefiling.gov.in

This is the official place to file income tax online and unless you have some knowledge of income tax, it is better to avoid filing yourself at here. Another reason is that there is hardly any help or support available, many times government sites don't work.

Since I'm net savvy and have good enough of income tax knowledge with me it was really easy to file my income tax last year. Frankly at Investmentyogi.com I found filling and reviewing dozens of pages a long drawn and boring affair. In fact these income tax utilities helped reduce my impatience. Till last year IT dept. was releasing tax calculator tools both in Excel as well as PDF forms. If you did not have Excel then you could use PDF tool to prepare your returns online. As of now I see IT dept has released only Excel Utility.

Ok let me show you how I prepare and file my own income tax return online. Just follow me and you also will be able to.

Download Income Tax Calculator 2012-2013

Click on the link to download it. Open it with WinZip or WinRar. You'll see two files:

income tax return filing & calculation utility contents

First open the HELP.txt file and carefully read it. It is common to find issues with this excel tool. If government has released any PDF tax calculator tool too then try it and it'd work better than this excel one. So take care to enable Macros in Microsoft Excel in your PC.

Now open 2012_ITE1_PR12.xls. When you open it - it'd look like this:

Excel tool after opening it

Look at the buttons at top right( Validate, Print, Next, Generate & Help):

Top right buttons

After you fill each page in the tab you'll need to click "Validate", then correct those errors and move on to next page. Finally click Generate to generate the final file in XML format.

Also see the tabs in the bottom:

 bottom tabs

Now click the "Income Details" tab - fill applicable details/ Now click Validate on the top right. Then move on and fill TDS, Taxes paid and Verification and 80G tab pages. Now click "Calculate Tax" in the top right. Check all the calculations then press "Generate" - you'll get an XML( with your PAN Number in the filename) file which will look like this:

XML format of your sample return

You can open in any text editor and check your PAN number. Beware never change anything in it!

Private service providers like Taxsmile, InvestmentYogi etc also generate your return in this form which will not be exactly same but quite similar. Once you've it, those private service providers will submit it at income tax department on your behalf. But since you're on this government site, now you'll need to do it yourself.

You need to visit this site to file your income tax return : incometaxindiaefiling.gov.in whose home page looks as below:

income tax efiling website home page

If you don't have login - click on "Register" to register first and have your PAN card ready.

Login in the site as in below using your PAN card as login:

login page

After login you'll be presented a screen and select from the left side under "SUBMIT RETURN" => "Select Assessment Year" => AY 12-13 ( or whichever is the assessment year). So if today is 5/July/2012 and I want to file IT return of last year, that is from 2011 April to 2012 March, then I'd select assessment year as 2012-2013 as shown here:

Select the assessment year for filing taxes

Clicking the link takes you to this window in which you select the form name(ITR-1 if you're salaried) and No if you don't have a digital signature. To get digital signature it'd cost you some Rs. 1000 - Rs. 2000 with the advantage that you don't need to take the print of return receipt, sign it and send to income tax department, Bengaluru:

Select your Form

Clicking next takes you to this final form:

Upload your XML file now

Select the file and click upload, then it'll be checked against XML format and if accepted you'll get success message and a paper receipt which you must take print out, sign it and send it Bengaluru address mentioned over it. Here is how ITR-V receipt looks like:

ITR-V Receipt of your IT return

This is also sent to your email(but it could take even 1 month time); check it in your spam folder too now and it should look like:

Confirmation email of your success return filing

Remove income tax sites from your spam list

It is very important for you to verify that cpc.gov.in/incometaxindiaefiling.gov.in/incometaxindia.gov.in are not on your spam list. Locate the email now and move it to inbox if found in spam by clicking "Not Spam". Or you can add a rule in your email account so that any email from gov.in is delivered to your inbox.

Sending your signed receipt to IT office, Bengaluru

Sign in the bottom of the 1 page receipt as in here:

Place you signature

And if you scroll to the last you'll find some instructions similar to:

Please furnish Form ITR-V to "Income Tax Department - CPC, Post Bag No - 1, Electronic City Post Office, Bangalore - 560100, Karnataka", by ORDINARY POST OR SPEED POST ONLY, within 120 days from date of transmitting the data electronically. Form ITR-V shall not be received in any other office of the Income-tax Department or in any other manner. The receipt of this ITR-V at ITD-CPC will be sent to you at this e-mail address.

I suggest you print two copies and send the first by speedpost and send the second after a week later with normal Rs. 5 post.

Confirmation of receipt of your sent ITR-V by IT Dept.

As soon as your receipt is received and signature matched you'll get a confirmation email from cpc.gov.in which can take even 1 month and looks like:

Email receipt of your ITR-V electronic return filing

Once you've got it you can rest in peace and your return will be stored forever. If you don't get the confirmation email even after two months try sending them again and also call their customer care/help line to know the status. Please see that your actual filing date will remain same - what is printed on the right side of your signature only if your receipt is receipt by IT Dept within 4 months from this date. Otherwise it equal to not having filed income tax at all.

eFiling General Knowledge

Different types of (Electronic) eFiling of Income Tax Returns

This diagram best sums up eFiling types for you. You most likely fall into the blue group(without digital signature version):

Types of Electronic Filing of returns

(Source: incometaxindiaefiling.gov.in)

eFiling Workflow/Process diagram

online eFiling step by step procedure

(Source: incometaxindiaefiling.gov.in)

If you like this article or have suggestions to give - leave them below in the comments.

Last Updated on Monday, 16 July 2012 19:01
 

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