Income Tax Return (ITR) - How to File ITR for FY 2022-23

An income Tax Return, commonly known as ITR, is a form through which a taxpayer can declare details of his income earned from different sources on which he is liable to pay taxes. The taxpayer can declare his earnings, expenses, investment, deductions, etc., through this form. The Income Tax Department makes it mandatory for every individual with an annual income of more than ₹2.5 lakhs to pay taxes.

The income tax return filing is done to report the income during a fiscal year. However, there may be other reasons for ITR filing. These may include claiming an income tax refund, tax deductions, carrying forward losses, etc.

For many individuals, income tax filing can be tedious; however, as a responsible citizen, you must mandatorily file for it. Here are some of the benefits of ITR filing.

• As a responsible citizen, you contribute to the nation's growth, as the tax you pay is used to build infrastructure, construct roads, avail medical and education facilities etc.

• It acts as proof of income when you apply for a loan or during VISA processing for going abroad.

• It acts as authenticated evidence of your earnings.

• When starting a new business or raising funds, an ITR helps determine the business's financial stability and profitability.

Every Indian resident and non-resident (NRI) has to mandatorily do ITR filing if his total income exceeds the basic exemption limit. The exemption limit under the old regime is ₹2.5 lakhs for individuals below 60 years, ₹3 lakhs for individuals between 60 and 80 years and ₹5 lakhs for individuals above 80 years. The total income should be earnings from all sources like salary, house property, business income, capital gains, or any other taxable income. From this, total income deductions and exemptions must be reduced.

Apart from the above criteria, in the below situations, resident individuals must compulsorily file for a return irrespective of their income threshold.

• Individuals who are beneficial owners of any asset located outside the country.

• Individuals having financial interests in entities located outside the country.

• Individuals who are beneficiaries of assets located outside the country.

Additionally, as per the new rule 12AB, filing of returns is compulsory under the circumstances where the limitations in the previous year exceed the following:

• Business Turnover of ₹60 lakhs,

• Professional Receipts of ₹10 lakhs,

• TDS & TCS of ₹25,000, or

• Saving Bank Accounts deposits is equal to or more than ₹50 lakhs.

E-filing of income tax returns means filing for your IRT online. E-filing is convenient and quick and can be done in the comfort of your home or office. However, it is always advised to keep the required documents handy before starting the e-filing process.

For the E-filing of returns, the below documents are needed:

• Pan card

• Form 26AS

• Form 16A, 16B, 16C

• Salary Pay slips

• Bank account statements

• Interest certificates

• TDS certificate

• Proof of tax-saving investments

You can complete your ITR filing by visiting the Income Tax Department's official website. To file ITR online, you must first complete the registration process. The filing portal has been recently updated, making the e-filing process quicker and easier.

Below is the process to file ITR for FY 2022-23.

Getting Ready for E-filing

Step 1: Calculate income tax liability

Calculate your total income for all the sources per the prescribed Income Tax rules. Then, claim deductions if applicable. Also, consider taking into account TDS, TCS and advance tax paid. This will give you your tax liability.

Step 2: Get TDS certificates and Form 26AS

Form 26AS provides a summary of the TDS and tax paid during the financial year. In addition, the TDS amount can be summarized from the TDS certificates of all four quarters.

Step 3: Choose the correct IT form

It would be best to determine which ITR form applies to you. Only two forms, ITR 1 and ITR 4, are available for online filing. The rest of the forms must be uploaded offline.

ITR E-Filing Process

Step 1: Visit the official e-filing portal of the Income Tax Department.

Step 2: If you are a new user, you must register yourself by clicking the 'Register' button. If you are an existing user, click on 'Login'.

Step 3: Once you log in to your account, go to the e-filing tab and select 'File Income Tax Return'.

Step 4: From the list, select your applicable category as a taxpayer, like individual, HUF etc.

Step 5: Select the applicable ITR form.

Step 6: Provide details of your bank account. If you have already provided the details, you must validate the same.

Step 7: You will now be redirected to a new page containing pre-filled details of the ITR. Check the mentioned details carefully and make changes if needed. Once you are satisfied with the information mentioned, confirm the same.

Step 8: After confirmation, convert the file to XML format and upload the same on the e-filing portal. Alternatively, you can send a physical copy to the Income Tax Department.

Step 9: For uploading the file, provide necessary details such as PAN, assessment year, ITR form number and submission mode. The submission mode must be selected as 'Upload XML'. Then select 'Submit'.

Step 10: Select one of the available verification modes to complete the process.

You may face huge penalties and severe consequences if you have taxable income and do not file for a return by the due date.

Late Fee

Below are the penalties under Section 234F that will be levied if you delay filing the ITR for FY 22-23.

Interest

If the ITR is filed after the due date, an interest of 1% per month or part month on the unpaid tax month under Section 234A will be levied.

Loss Adjustment

If you have incurred a loss from shares, mutual funds, properties, or businesses, you can carry forward them for adjustment to the following year. This can help in reducing tax liability. However, it must be noted that loss adjustment is allowed if you declare these losses in your ITR and file it with the Income Tax Department before the due date.

Belated Return

If you still need to file the ITR by the due date, you can still file for a belated return. The due date for filing the belated return is typically 31st December of the assessment year until extended by the government. You, however, will have to pay the late fee and interest rate and are not allowed to carry forward the losses for adjustment.

For any individual taxpayer, tax savings is one of the crucial aspects of tax planning. Thus, the government has made provisions for deductions and exemptions under the old tax regime.

Health insurance is one of the common avenues wherein taxpayers can achieve dual advantage – financial security and tax saving. Due to the numerous benefits of health insurance plans, this tool has garnered immense popularity recently.

Buying a need-based medical insurance plan is no longer a cumbersome task. With Tata AIG, you can buy health insurance online in just a few simple steps. Not just that, you can compare the plans, calculate premiums online and also initiate claims online in simple and hassle-free processes.