Income tax return filing in India is an important compliance requirement for every taxpayer. In the current digital world, you can submit your ITR through the Government’s official Income Tax (IT) portal or via third-party ITR software.
Both options can support you in fulfilling your tax liabilities; however, they vary in terms of features, user experience, and purpose. Comprehending such differences can support you in choosing the effective option for your tax filing requirements.
Income Tax Portal
The IT portal is the official e-filing platform, which is being handled under the IT dept. of India at https://www.incometax.gov.in/iec/foportal/. The same portal acts as the authorised, government-run system for tax compliance and is a legal channel under law to submit your Income Tax Return to the tax authorities.
The portal is productive for taxpayers to-
- E-Verify filed tax returns
- View pending actions, information, and replies
- Trace income tax refund status
- Prepare and submit the online ITR electronically
- Download past ITR and additional tax records
It proposes free ITR preparation utilities and tools that are updated every assessment year (for example, ITR-1, ITR-4 online/offline, and ITR-2 offline), allowing users to prepare their returns and upload them.
Income Tax Return Filing Software
ITR Software refers to commercial or private digital tools formed by companies to help taxpayers in preparing and filing their ITRs. It comprises online platforms such as Gen Income Tax Software, ClearTax, TaxBuddy, MyITReturn, and desktop/cloud-based solutions made for individual users, tax professionals, or CA firms.
Such software programs provide distinct features like-
- Choosing the accurate ITR form based on your revenue profile
- Rendering JSON files that can be uploaded to the IT Portal
- Furnishing step-by-step guidance, guarantees, and instant mistake checks
- Automatically importing payment details from Form 16, AIS, and TDS records
- Computing income tax liabilities and deductions automatically
Major Difference Between IT Portal and ITR Software
Below we have listed the major differences between the income tax portal and online ITR software:-
Ownership and Tax Compliance
IT Portal- It is owned by the government and functions under income tax department. Return filing is directed to submit the same before the tax authorities without intermediaries.
ITR Software- These are private solutions developed by software companies. They assist in preparing your tax return, but the final submission should go via the IT Portal (either directly or by generating JSON files).
IT Web Portal and Software Price
IT Portal: It is free for all taxpayers. You do not need to pay to prepare or submit your ITR on the official portal, even for intricate returns.
ITR Software: Some provide free versions with fewer features, but a paid subscription is needed to get advanced features or an expert.
Ease of Use and Guidance
IT Portal: The portal is operational and proves to be effective for the users who understand tax terminology and ITR forms. The beginners may find it hard as it provides fewer guided steps.
ITR Software: A more intuitive interface, guided workflows, automated calculations, error checks, and sometimes expert assistance or AI suggestions are delivered under such tools. First-time filers or individuals with difficult tax situations can find it simpler under this tool.
Automation & Features
IT Portal: The portal provides basic pre-filled information for specific entries, with the majority of information required to be entered manually. It acts as a submission and tracking tool.
ITR Software: It provides automation like importing data from distinct sources such as Form 26AS, AIS, and investment accounts, automatic tax calculation, and recommendations of deductions. Some advanced platforms can guide you in choosing the beneficial tax regime.
Help and Service
IT Portal: Official FAQs, tutorials, and help desks are available, but personalised support is limited. If you’re unsure of complex situations, you may still require external assistance.
ITR software: Many furnish customer assistance, live chat, or expert consultations, and support for after-filing problems like notices in paid plans.
Safety and Lawful Validity
IT Portal: Provides the highest compliance and legal assurance as it is the official channel of the government. You can trust that your data is controlled under robust security and data protection standards.
ITR Software: Although trustworthy software employs encryption and secure protocols, it is still an intermediary. Data protection is as per the vendor’s practices; it is important to opt for the recognised platforms.
Which One to Choose Between Them?
Easy Tax Scenarios: If your income source is clear (for example, salaried income and interest), the IT Portal may be adequate, particularly if you are confident with the tax forms and entries. It is free and provides direct compliance.
Complicated Tax Situations: If you possess various sources of income, like business earnings, capital gains, or foreign earnings, and would like a more intuitive experience with checks and suggestions for tax savings, then ITR software may be more effective, even if it is costlier.
Closure: Both the IT portal and the Income Tax Return Filing software serve the same objective and assist in filing your ITR effectively. Evaluate your situation and preferences to opt for the option that fulfils your requirements.
