ITR Guide For Beginners: How To File Income Tax Return In India — All Steps Explained
Filing Income Tax Returns on time ensures compliance with tax laws and helps you claim deductions. Understanding the process can make tax filing hassle-free.
Filing an Income Tax Return (ITR) is a crucial financial responsibility for every taxpayer. The tax collected serves as a key source of funding for the country’s development.
Whether you are a salaried employee, self-employed or a business owner, understanding the process of filing an ITR can help you avoid errors and penalties.
Here’s a guide to help beginners file their ITR with ease.
Determine Eligibility
The first step is to check whether you are required to file an ITR. If your annual income exceeds the basic exemption limit, you must file a tax return.
Register On The Official e-Filing Portal
After determining your eligibility, the next step is to register on the official e-filing portal. You need to complete this process before the deadline, which is usually July 31 each year.
Here’s how to register yourself:
Visit the official e-filing portal: https://www.incometax.gov.in/iec/foportal/
Click on ‘Register’ and select ‘Taxpayer’
Enter your PAN details, click ‘Validate’, and then ‘Continue’
Fill in your personal details, such as name, address and gender
Provide your email ID and mobile number for verification
Click ‘Continue’ and verify the details you have entered
An OTP (One-Time Password) will be sent to your registered email and mobile number, which you need to enter to proceed.
If any corrections are needed, edit the details and verify them again with a new OTP
Set up a password and a secure login message for future access
Click ‘Register’ to complete the process
A confirmation message will be displayed upon successful registration
Collect Essential Documents
Before filing your ITR, gather all necessary documents, including:
PAN card and Aadhaar card
Form 16 (issued by your employer, summarising salary details and TDS deductions)
Form 26AS (tax credit statement available on the income tax portal)
Bank account details and statements (to verify income and deductions)
Investment proof (PPF, LIC, ELSS, NSC, etc.) for tax deductions under Section 80C
Capital gains statements (for those who have invested in stocks, mutual funds or real estate)
Business income records (for self-employed people and freelancers)
Select The Correct ITR Form
Indian taxpayers must file their Income Tax Return (ITR) using the appropriate form based on their income source and taxpayer category. There are seven types of ITR forms, each designed to cater to different individuals and organisations. Choosing the correct form is important for accurate tax filing.
ITR-1 (Sahaj): For those with income up to Rs 50 lakh from salary, one house property and other sources (excluding lottery/horse racing).
ITR-2: For people/HUFs with income above Rs 50 lakh, capital gains, foreign assets or agricultural income over Rs 5,000.
ITR-3: For individuals/HUFs earning from business, profession, firm partnership or holding unlisted equity shares.
ITR-4 (Sugam): For individuals/HUFs/firms (excluding LLPs) with business/professional income up to Rs 50 lakh under presumptive taxation.
ITR-5: For partnership firms, LLPs, AOPs, BOIs, co-operative societies and business trusts.
ITR-6: For companies (except those claiming exemption under Section 11).
ITR-7: For entities filing under Sections 139(4A) to 139(4D), including trusts, political parties and educational institutions.
Fill In Your ITR Details In The Income Tax e-Filing Portal
Select the relevant assessment year.
Choose the appropriate ITR form.
Enter all the details that are necessary, including your income details, deductions and tax payments.
Cross-check the details with Form 16 and Form 26AS to ensure accuracy.
Verify Tax Liability And Claim Deductions
Calculate your total taxable income after applying deductions under Sections 80C, 80D and other applicable provisions.
If excess tax has been deducted, you can claim a refund.
Preview And Submit The ITR
Once you have filled in all details, review the form carefully for any errors.
Submit the return electronically and save the acknowledgement receipt.
Verify Your ITR
The e-Verify service on the portal allows both registered and unregistered users to verify their ITR and other tax-related submissions. You can complete the verification process using any of the following methods:
Digital Signature Certificate (DSC)
Aadhaar OTP
Electronic Verification Code (EVC) via bank or demat account
EVC via Bank ATM (offline method)
Net Banking