e-Filing Indian Income Tax Return through ITR-1/ITR-2/ITR-2A

This post is for salaried professionals who just have income through salary and bank/FD interest. Also, if you are a DIY person like me :)

Tax season is finally here! People are busy scrambling for their Form 16s and figuring out if they have everything they'd need to file their ITRs. Well, I just filed mine so thought I'd share my experience and some knowledge, that I gathered in the process, here.

First, some common questions everyone has:

Difference between Financial Year and Assessment Year: Just remember - you are assessing your financials that took place in the last year! So if today is July 25, 2015, the Financial year was 2014-15 while the Assessment year is 2015-16.

Difference between ITR-1 (Sahaj) and ITR-2/2A: For our purpose, we could use either of these forms but the overall differences are listed out here.

Difference between ITR-2 and ITR-2A: They are almost the same, just that ITR-2A is a simpler version of ITR-2. Also, ITR-2A cannot be filed if the assessee has income from capital gains. So in our case, we'll go with ITR-2A between the two.

Do I need to file the return online?: If your income is above Rs 5 lakhs, you have to. By filing online, it does not necessarily mean everything has to be done online. You can generate the return offline but then come back to upload it (as shown below with the case of ITR-2A). Currently, only ITR-1 and ITR-4S can be filled completely online.

I do not have a digital signature. Can I file online?: Yes! You could either post the ITR-V acknowledgement (obtained after you are done e-filing your return) to CPC Bengaluru (for details on how to post it, click here) OR if you have your Aadhaar and its linked mobile number, you could just verify through an OTP sent to your mobile! It is extremely simple now.. all they want is a verification that it is indeed you who is authorizing/verifying the return.

What else do I need, besides Form 16, to start the e-filing process?: Your savings/current bank account(s) interest certificate(s) and your fixed deposit TDS info. Basically:

1. How much interest did you receive in the past financial year in total across all your bank accounts?

2. How much interest did you receive through all of your fixed deposits and how much tax was deducted at source (TDS) by your bank when that FD interest was given to you?

Do I need to download ITR excels or can I fill the info completely online?: As of now, you can only fill ITR-1 and ITR-4S completely online. For ITR-2/2A, you need to download the excel, fill it, generate an xml which you'll upload again on the income tax website.

Some good links that helped me:

http://www.bemoneyaware.com/blog/how-to-fill-salary-in-itr2-itr1/

http://www.bemoneyaware.com/blog/income-from-other-sources-itr/

Steps to fill ITR-1 online:

1.    Login to the income tax india e-filing website.

2.    Click the 'Quick e-File ITR link on the left.

3.    Fill in your PAN number, choose ITR-1 as the form name and the appropriate year as Assessment Year. If you want to prefill your address, select the appropriate option. If you have your digital signature, select Yes, otherwise select No. Hit Submit.

4.    It is a good idea to read the instructions and then navigate to the next tab 'Personal Information':

·        Fill in the information as asked.

·        You may leave 'Income Tax Ward/Circle' as blank if you do not know it.

·        Make sure you fill in your personal email address and mobile number since if you choose your official email/cell, chances are you will switch offices and lose history.

·        Employer Category: If you are working in a private firm, select Others.

·        Tax Status: You can select anything here. This will update automatically based on the balance tax (payable or refundable) information it calculates in the later pages.

·        Return filed under section: I chose 'Before Due Date' since I was filing before the due date (Sep 07 this year).

·        Whether original or revised return?: If you file it for the first time, pick Original. If you are coming here to modify any information after you have submitted the return already, pick Revised.

·        Portuguese Civil Code: I chose No but this may vary for different people.

·        Whether you have Aadhaar number?: I had it so chose Yes and entered the number in the next box.

5.    Once you are done, navigate to the next tab 'Income Details':

·        Income from salary/pension: Pick the income from 'Income chargeable under the head Salaries' which is point 6 in Form 16.

·        Income from other sources: This is where you need to add all of your interests (across all your bank accounts + across all your FDs) and fill the total here.

·        Deductions: Fill as relevant to your case. Remember to put your bank account interest total under 80TTA. 80TTA is just for savings/current bank account interest and does not include fixed deposit interest. The maximum available deduction is Rs 10,000 (don't worry, the system will automatically calculate this for you once you put the actual figure under 80TTA.

·        Rest all fields will be calculated automatically.

6.    Navigate to the next tab 'Tax Details':

·        This should already be pre-filled from the data the income tax department has already.

·        TDS1 section will contain the TDS deducted by your employer.

·        TDS2 section will contain the fixed deposit TDS deducted by your bank(s).

·        IT (Self assessment) section: You may leave this blank for now. This will be used if at the end it turns out you have some balance tax payable. You will then have to pay the balance tax online through netbanking and then fill the challan details (obtained once the payment is done) here. Please note that it is important to pay the balance tax before submitting the return. In case you forget to do so, you will have to amend this return and then fill the Self Assessment section.

7.    Navigate to the next tab 'Taxes Paid And Verification':

·        If this section says there is some tax payable, please save the information you have till now and go to 'E-Pay Tax' link on the left and follow the instructions I have below on how to pay the balance tax online.

·        Fill the total number of savings & current bank accounts you have across all banks.

·        Enter the details of these accounts in the next section(s) with the first one being where you'd like your refund (if any) to be deposited.

·        You can get the IFSC code for any bank in India here.

·        Enter/verify the last section and hit next to fill in your donations (if you made any during the financial year). Finally, submit the return!

8.    How to pay the balance tax online:

·        Click 'E-Pay Tax' link in the left navigation bar or click here.

·        Select ITNS 280 (payment of Income tax and Corporation tax).

·        Select '0021 - Income tax other than companies'.

·        Fill in the details as required.

·        Select 'Type of Payment' as '300 - Self Assessment Tax'.

·        Select your bank and then proceed to make the payment. Enter the amount you need to pay when it asks (this will be equal to the amount calculated above as your balance tax payable).

·        Once the payment is complete, you will get your BSR code and Challan serial number. Enter these details in the 'Self Assessment' section as described above in point 6.

Steps to fill ITR-2A excel:

1.    If you are logged in to the e-filing website, click on 'Download ITR' link on the left. If you are not logged in, you can find a link to download ITR-2A on the home page as well.

2.    Download the excel, open it for Editing and Enable Macros if they are not already.

3.    The sheets in the excel are laid out in a similar way as ITR-1 so if you need any help filling in any of the sheets below, just refer to the above section where I've described how to fill ITR-1 online.

4.    You need to hit the 'Validate' button in each of the sheets where you are entering data so as to make sure the data is correct and has no validation errros.

5.    The first sheet in the excel - 'Home' - describes what the other sheets are. Just read through the description to understand what info each of those sheets contain. If certain sheets are not applicable for you, you can select 'N' in both the columns to the right and hit Apply. Those sheets will get hidden from the excel. You can also hit 'Help' to see the otherwise hidden help information.

6.    Part A - General sheet:

·        Before starting, you should download some information about the current assessment year that the income tax department already has for you. The most important thing is the TDS information which otherwise you'd have a hard time filling (though it is not impossible to fill this informatin but you'd need your Form26AS).

·        For downloading this information, login to your e-filing account, go to Downloads in the top menu and click 'Download pre-filled xml'. Select the current assessment year and hit Submit. Note the location where your browser is downloading this file for you.

·        In this Part A - General sheet, there is a button to 'Import Personal/Tax Details from XML'. Click the button, navigate to the xml you just downloaded and hit Open. Voila! Your TDS and some other info will fill into the excel automatically (you can go to the TDS sheet in the excel and verify).

·        Fill in the other details in the Part A - General sheet as asked and hit Validate. If it says 'sheet ok', it means there are no validation errors on the sheet.

7.    PARTB - TI - TTI sheet: Don't worry about the top white portion (it will be filled automatically later). Just fill in the green section (bank accounts and verification). Hit Validate.

8.     IT sheet: Please refer to point 6 (self assessment) section I've described above under ITR-1.

9.    TDS sheet: This should already be filled now.

10.    Salary sheet:

·        There seems to be a bug in this sheet which can screw your tax calculations so pay special attention to filling this.

·        If you enter your Gross salary in point 1 in this sheet and the exemptions in point 2, this sheet will not subtract your exemptions as it should. The exemptions you are entering, it seems, are just to let the income tax department know what all and how much exemptions you received. The numbers here are not involved in any way into the tax calculations which is why the amount you should enter in point 1 should be your Gross salary minus the exemptions on your Form 16.

·        The crux is that once you are done filling this sheet, point 7 (Income chargeable under the head salaries) should show the same amount as the corresponding amount in your Form 16.

11.    OS (income from other sources) sheet: Enter your bank account + FD interest in 1b.

12.    VIA sheet: Enter your deductions. You may refer to point 5 in ITR-1 above.

13.    Now you can move back to the PARTB - TI - TTI sheet and hit 'Calculate Tax'. Verify the calculations and if point 12 in the sheet says you have some balance tax payable, follow point 8 above under ITR-1, make the payment and come back to the 'IT' sheet in this excel and fill in the BSR code, date, challan serial number and amount. Go to the PARTB - TI - TTI sheet again and hit 'Calculate Tax'. Now the balance tax should be zero.

14.    You are almost done now. Hit 'Validate' on all the sheets you modified once more to validate the information. You may print the sheets you desire and then finally, hit 'Generate XML'.

15.    You may get an error saying 'Amount of salary disclosed in 'Income details/Part BTI' is less than 90% of salary reported in TDS1'. This is because your employer reported your gross salary in the TDS section which would be higher than what you have filled in the 'Salary' sheet point 1 due to the bug that's there in the sheet. To fix this error, I just modified the TDS sheet column 4 and changed the amount to what is there in the 'Income chargeable under the head salaries' in Form 16.

16.    After fixing the above error, hit 'Generate XML' again and a new sheet will show up displaying some information and a button to 'Save XML'. Verify the information and hit the button. The resultant xml is basically your return and contains the data that you filled in this sheet.

17.    Now all you have to do is upload this xml on the income tax e-filing website and verify it:

·        Login to your e-filing account and click 'Upload Return' on the left.

·        Select ITR-2A as the Form name, current Assessment Year and browse for the xml you saved above.

·        If you have your digital signatures, say Yes, otherwise say No and Submit (which is what I did).

·        The return will be uploaded and I was given an option to either post the acknowledgement to CPC Bengaluru or verify using my Aadhaar linked mobile number. I selected the Aadhaar option and received an OTP which I entered on the screen and that's it! My return was e-filed and no further action was needed (nothing to post). I received my Acknowledgement over email which I saved for my records!