Filing your ITR on time is important. Delays can result in penalties, and you may lose the benefit of carrying forward certain losses.
What is Income Tax Return e-Filing?
E-filing, or electronic filing, is the process of submitting your Income Tax Return online. This method allows you to file your returns from the comfort of your home or office. It also speeds up the processing of refunds because the data is directly transmitted to the Income Tax Department's systems, reducing paperwork.
Types of Income Tax Return e-Filing
There are three main ways to file your ITR electronically:
- Filing with a Digital Signature Certificate (DSC):
This is the fastest and simplest method. Once the return is filed with a DSC, no further action is needed. - Filing without DSC:
If you choose to file without a DSC, an ITR-V form is generated after submission. This form must be printed, signed, and sent to the Centralized Processing Center (CPC) in Bangalore within 120 days by Speed Post or Standard Post. - Using an e-Return Intermediary (ERI):
Taxpayers can also use an ERI to file their returns, with or without a DSC.
Why You Should File ITR and Who Must File
Filing an ITR is mandatory if you meet any of the following conditions:
- Income exceeds the exemption threshold:
- Individuals under 60 with an annual income of ₹2.5 lakh or more.
- Individuals between 60 and 80 with an annual income of ₹3 lakh or more.
- Individuals over 80 with an annual income of ₹5 lakh or more.
- Claiming an income tax refund:
To claim a tax refund, you must file an ITR. - Holding foreign assets or earning foreign income:
If you have foreign investments or earnings, it is mandatory to file an ITR. - Applying for a loan or visa:
Many banks and consulates require an ITR when processing loan or visa applications. - For businesses and organizations:
All registered businesses and organizations are required to file an ITR, regardless of whether they make a profit or incur losses.
Special Cases Where Filing ITR is Required
Even if your income is below the taxable limit, you may still need to file an ITR under specific conditions:
- Large bank deposits:
If you have deposited ₹1 crore or more in a current account during the year. - High foreign travel expenses:
If you have spent over ₹2 lakh on foreign travel for yourself or someone else. - Significant electricity consumption:
If your electricity bill for the year exceeds ₹1 lakh.