Step-by-Step Guide To File Income Tax Return FY 2023-24

Income tax return filing is a scheduled process for every taxpayer and has to be filed every year. The ITR filing is also a mandatory process to be followed for multiple reasons including financial and record maintenance while beneficial for the future loan perspective.

For FY 2023-24, It is to be noted that the due date for filing the Income Tax Return by assessee was 31st October 2024 for all the Audit cases and for the Non-Audit cases the due date was 31st July 2024. The due date for filing the Income Tax Return by the assessee who is required to furnish a Report under section 92E was 30th November 2024.

Note: The government has extended the due date for filing the income tax return under section 92E to December 15, 2024, from 30th November 2024. Read Circular

Note: The deadline for filing the income tax audit report has been extended to November 15, 2024. Read Circular

Note down it is very important for all the assessees to file income tax returns online having an income of 2.5 lacks per annum (excluding senior citizens) and to claim a refund. While it is a significant process, it is also easy to track refunds and ITR returns online.

Definition of E-filing

E-filing is the process of electronically furnishing the returns of the taxes paid by you. The government allows both Online and Offline Income Tax Return (ITR) filing, whichever is convenient for the taxpayer. However, E-filing or electronic ITR Filing has overtaken the traditional offline method as many taxpayers find it convenient to file the returns from their offices without much paperwork. Above all, e-filing is a free-of-cost procedure.

Why You Must File ITR Before 31st December 2024?

It will be more correct, to make sure that all the details of the accounts are true, the ITR returns on filing need much more attention. To avoid errors one needs to check documents, tax statements, interest income certificates, etc. If one returns ITR then the chances of errors become lesser.

Payment Interest- the assessee who has to pay a tax of more than 1 lakh has to file earlier so as to increase interest payment on a monthly basis. Failure to file returns will levy a 1% interest for every month.

The loss will be moved forward: the Income-tax plan is to take ahead the losses from one fiscal year to another. although, taxpayers can avail of this if they file ITR before the expected last date.

Quick Refund: if the taxpayers file their return before November 30 then refunds can be processed who are waiting for the same. Earlier ITR filing may be confirmed before it gives quick tax rebates.

Let’s Come to the Step by Step Process of ITR Filing FY 2023-24

As mandated by the constitution of India, Income tax return filing is a foremost requirement for all registered taxpayers in India. Thanks to the outbreak of technology in India, the ITR filing can now be done via both Online and Offline modes.

E-filing or electronic filing is the newly inaugurated process for filing online Income tax returns and the write-up is aimed at giving you the complete information of the e-filing ITR process, its significance, eligibility, deadline and so on.

Income Tax Calculations

Firstly the taxpayer needs to make the exact calculation of his taxable income in line with the current tax norms applicable to him. Here Calculate your free Income Tax

Document Organization

• The taxpayers will have to obtain all the documents of monetary value i.e. income, investments, assets, and bank accounts apart from government documents like Permanent Account Number (PAN) and Aadhaar number or Aadhaar enrolment ID. It is not necessary to attach these documents while filing ITR online but still one needs them to fill out the form due to the details engraved on them.
• Also, the documents related to income other than salary, like capital gains, rental income and dividend income will also be needed while filing the IT online and it is also suggested that the taxpayers should maintain a separate file of documents for every previous ITR filed.

Document Checklist For Filing ITR Online

The most important thing that the assessee would require to start with the filing of ITR is the required documents. Documents the assessee would need to vary depending on the type of income he has:-

Personal Documents

• PAN Card
• Aadhaar card or Aadhaar enrollment number
• Details of domestic assets and liabilities
• Details of foreign assets

Income-related Documents

• Details of exempt income earned during the year
• Form 16/16A/16B to fill in the details of income
• Balance sheet, P&L account statement and other audit reports, wherever applicable
• Details of Sales/Turnover/Gross Receipts during the year

Bank-related Documents

• Bank statement
• Interest statement of the year
• Details of all bank accounts held during the year( IFSC code, account number, name and nature of account)

Tax-related Documents

• Copy of last year’s tax return
• TDS certificate
• Saving certificate or deduction
• Form 26AS to cross-check TDS details

Real Estate-Related Documents

• Buyer agreement, sale deed and investment documents to show capital gains on sale and details of exemption if availed or not
• Lease deed to show rental income

Investment and Expense Related Documents

• Home loan statement to claim a deduction on Principal amount and interest on home loan
• Proof of investment such as mutual funds account statement
• Premium receipt for life insurance plans
• Medical insurance premiums and preventive checkup receipts, etc.

Other documents such as proof of donation

Income Tax Preparation

Go to the official site for income tax filing (link: www.incometaxindiaefiling.gov.in) > Go to Downloads then select AY > Download Common Offline Utility> Install the setup

Create an ITR e-filing Account

After having all the desired documents handy, one must log in to an ITR e-filing account through the income tax department’s website. The details like user ID (your PAN) and password will be needed for logging.

However, if a taxpayer is a first-time ITR filer then he may create an ITR e-filing account on the same website with few other details.

ITR Form Selection

After logging into the ITR e-filing account, one must click “filing of the income tax return” on the dashboard. Then select the assessment year (AY) for which the taxpayer has to file an ITR. After which choose the ITR form. For Individuals and HUFs having income from profits and gains of business and profession ITR 3 is mandatory. 

For Individuals, HUFs and Firms(other than LLP) being resident and having total income up to Rs 50 Lakhs and income from business and profession which is computed under section 44AD or 44ADA or 44AE ITR-4 is to be filed( Not for individuals who are a director in a company or have invested in unlisted equity shares).

According to a tax expert, “ITR-1 does not apply to non-residents and not ordinarily residents, the ITR-2 form is no longer applicable for individuals or HUF (Hindu Undivided Family) who have profits and gains from any business or profession and are required to file form ITR-3.”

Read Also: Important Steps for Beginners to Filing Income Tax Return

In case one selects the wrong ITR form, the particular form is considered to be defective so it is advisable to be cautious. Swapping of ITR forms is also not suggested as for example ITR 1 and ITR 2 are 2 different forms. ITR 2 is for those having an income of more than 50 lakhs and having 1 or more houses while ITR 1 is for those who have less than 50 lakhs of income and a single house.

So in case, a person filed ITR 1 instead of ITR 2 then it would be considered as under-reporting of income and it would draw a certain penalty which ranges from 50 to 200 %.

Various ITR Forms and Their Applicability

• ITR 1 – For Individual residents (Not Ordinarily Resident) having total Income up to Rs.50 lakhs, Salaried income, single House Property, Other Sources Income (Interest, Dividend etc.), and Agricultural Income up to Rs.5 thousand (Not applicable to Individuals being Director in a company or has invested in Unlisted Equity Shares)
• ITR 2 – For Individuals and HUFs not having income from profits and gains of business or profession
• ITR 3 – For Individuals and HUFs having income from profits and gains of business or profession.
• ITR 4 – For Individuals, HUFs and Firms (other than LLP) being a Resident having a total of up to Rs.50 lakhs and having income from business and profession computed under sections 44AD, 44ADA or 44AE (Not applicable to Individuals being Director in a company or has invested in Unlisted Equity Shares)
• ITR 5 – For persons other than:-
  (i) Individual,
  (ii) HUF,
  (iii) Company and
  (iv) Person filing Form ITR-7
• ITR 6 – For companies other than those claiming exemptions under Section 11
• ITR 7 – For persons including companies required to furnish returns under sections 139(4A) or 139(4B) or 139(4C) or 139(4D)

Note: Income earned in the previous year is called a financial year, while an Assessment year is a year succeeding the previous year in which the taxpayer assesses their income and files his return of income.

Convert the File Into JSON Format

Once the details are validated > select the ‘Download JSON’ button

JSON to Income Tax Portal

The last step is to upload the JSON file on the official income tax portal. Log in to the portal > Select ‘e-file’ > Select ‘Income Tax Return’ option from the dropdown

Filling Out Details

The first and foremost details are the Aadhaar number or Aadhaar enrolment ID which is mandatory to file an ITR return online as the system won’t allow the filing of returns online without this information.

According to the expert, “ITR forms are seeking a lot of new information like the break-up of salary and house property income to be furnished in ITR-1 form instead of a single amount of income/loss, as required to be furnished earlier.”

E-verification of Returns & Uploading

The last step to file the IT return is to verify your details and upload them on the portal. The ITR window will remain open for 30 days to get your return verified from the date of return submission. One can also send a duly signed copy of ITR V to the Central Processing Center tax department by ordinary or speed post.

Eligibility for Income Tax Return Filing

The eligibility for filing the ITR is decided on the basis of the annual income earned by an individual. Below is the threshold limit that decided to file the returns.

• Individuals below 60 years – Yearly Income Rs.2.5 lakhs or more
• Individuals between 60 years to 80 years – Yearly Income Rs.3 lakhs or more
• Individuals above 80 years – Yearly Income Rs.5 lakhs or more

There are other factors under which one needs to file the returns:

• Income Source – Salary, Rent from the property, Income from Business or Profession, etc
• Claiming the refund – It is mandatory by law for an individual to file his ITR if he is claiming a refund from the government.
• Loan or Visa Application – It is easier for an individual to get a loan or visa if he is a constant ITR filer.
• A Business – It is mandatory for every registered company operating in India to file returns.

Assessment Year v/s Financial Year

Assessment Year is the period just after the Financial Year. It is the time when the income earned in the preceding Financial Year is computed to judge the tax liability.

Financial Year is the period in which the income is earned by a business, individual or any financial entity. The period is said to start from 1st April to 31 March.

Calculating the Payable Income Tax

Make use of the tax calculator to find out the exact amount payable under the tax. The utility is available free of cost online. Using the utility one can find the accurate tax liability for the three consecutive financial years at once.

E-Filing Advised to Non-assesses

Filing a return is always beneficial for the taxpayer as well as the government. Individuals can file a zero return if they are not paying taxes. This is helpful in case of availing of a loan from the bank or applying for a visa.

Multiple Tax Returns File at One Time

Taxpayers can easily file multiple returns from a single account. An Effective e-filing Income Tax software helps you file the forms of the current year as well as the previous year under one user account. You can compute the taxable amount and file the returns anywhere and anytime within your comfort zone.

In Case I Lost My Income Tax E-filing Password

There are instances where taxpayers are seen in trouble because they have lost their passwords for Income Tax return filing. One must always store the credential in a safe file the access of which is with the taxpayer himself, the concerned CA or the accountant.

In such a case there is an option for resetting a password. This can be done by sending a request through an email to the Income Tax Department at validate@incometaxindia.gov.in mentioning the basic details like:

• PAN
• PAN Address
• Name of the PAN holder
• Father’s Name and
• Date of Birth

To be noted: It is suggested to mention the PAN with Aadhaar in the IT Returns. If Aadhaar is not yet received then one can mention the enrollment number in the return.

Income Tax Dept Processes 40 Million ITRs in 15 Days

Revenue Secretary Sanjay Malhotra said the income tax department has processed close to 40 million ITRs for AY 2024-25 in 15 days. Over 72.8 million income tax returns for AY 2024-25 were filed till July 31, 2024.

Approximately 49.8 million ITRs (income tax returns) have been processed already by the tax department, and intimations sent to taxpayers. From this, 39.2 million ITRs were processed in less than 15 days.

CBDT Chief: Review of I-T Act Will Get Completed in 6 Months

Reviewing the Income Tax Act of 1961 chores would get completed in the provided time duration of 6 months, as per the CBDT Chairman Ravi Agrawal “We have an important task on hand and that is the comprehensive review of the Income Tax Act, 1961. This exercise is aimed to reduce litigation and provide tax certainty to taxpayers”, Agrawal quoted in an event held here to mark the 165th Year of Income Tax in India.

Frequently Asked Questions About ITR Filing