Filing the ITR on or before the due date is crucial to avoid penalties and to carry forward any eligible financial losses.
What is Income Tax Return e-Filing?
E-filing, or electronic filing, refers to the process of submitting your ITR online. This method allows taxpayers to conveniently file their returns from anywhere and at any time. E-filing also speeds up the refund process, as it eliminates manual paperwork and sends the information directly to the Income Tax Department’s system.
Methods of e-Filing Income Tax Returns
There are three primary ways to file an ITR electronically:
- Filing with a Digital Signature Certificate (DSC):
This is the fastest and easiest method. No additional steps are required after filing the return with a DSC. - Filing without DSC:
If you file without a DSC, an ITR-V form will be generated after submission. This form must be printed, signed, and sent to the Centralized Processing Center (CPC) in Bangalore within 120 days via Speed Post or Standard Post. - Using an e-Return Intermediary (ERI):
ERIs assist taxpayers in filing their returns, either with or without a DSC.
Who Needs to File ITR and Why It’s Important
Filing an ITR is mandatory if any of the following criteria are met:
- Annual income exceeds the exemption limit:
- For individuals under 60, the limit is ₹2.5 lakh or more.
- For individuals between 60 and 80, the limit is ₹3 lakh or more.
- For individuals over 80, the limit is ₹5 lakh or more.
- Claiming an income tax refund:
Filing an ITR is necessary if you are eligible for a refund from the Income Tax Department. - Foreign investments or income:
If you have made investments in foreign assets or earned income from foreign sources, you are required to file an ITR. - Loan or visa applications:
An ITR is often required when applying for loans or visas, as it serves as proof of income. - For businesses or organizations:
Registered businesses and organizations must file an ITR, regardless of whether they have made a profit or incurred losses.
Special Conditions for Filing an ITR
Even if you do not meet the general income thresholds, you may still be required to file an ITR under certain special conditions:
- Significant bank deposits:
If you have deposited ₹1 crore or more in a current account during the financial year. - High foreign travel expenses:
If you have spent ₹2 lakh or more on foreign travel, whether for yourself or someone else. - Large electricity bills:
If your annual electricity expenses exceed ₹1 lakh.