Tuesday, July 26, 2011

Efiling Of income Tax Return

Electronic filing (e-filing) of income-tax returns is optional for individuals, however it has been compulsory for firms, entities or persons who are needed to get their accounts audited under the Income-tax Act.

The I-T department lets you file your returns online for free. The entire process may take about half an hour time. The service is available 24X7. This means you can also file return online in the night. Simple procedure of e-filing through I-T department website is this: (1) Registration on www.incometaxindiaefiling.gov.in which is the e-filing website. (2) Get the return preparation software for the appropriate return form. (3)Fill in your tax returns in the excel spreadsheet format available on the website and then convert it into an xml format file by just clicking on a link available on one of the sheets. (3) You have to upload this xml file on the website affixing your digital signature if you have one and it has been registered by you earlier on this website. Or if you don’t have digital signature available, you need to take a print out of the form ITR-V generated on the uploading of the xml file, sign it and dispatch it to the centralized processing centre (CPC) at Bangalore via post so that it reaches there in couple of months of uploading.

The tax department claims to proceed the returns within four months, however it can be longer than this. If you are deserved to get a tax refund, the refund will come to you within a year. Filing returns, Paying taxes, Viewing tax credit, tracking the processing status and deposit of refunds credited into bank account, everything is automatic in this process.

On 31 July, you can file return through e-filing anytime up to midnight(contrary to physical filing limit of 6 pm on same day). You don’t need to stand up in queues.

The biggest issue encountered by most e-filing taxpayers is that they get intimations after processing of returns showing large demands raised on them. This is because invariably credit for some tax deducted at source (TDS) or taxes paid by the taxpayer is not given.

The total number of Electronic filing(e-filing) in assessment year (AY) 2010-2011 was 9.15 million which is around 25% of the total 36 million taxpayers.