American author Herman Wouk once said, “Income tax returns are the most imaginative fiction being written today.” Whether that’s your case or not—and we hope not—it’s a task and with the deadline of 31 July round the corner, you better do it now to avoid the last-minute rush.
While most delegate the task to consultants and agents, increasingly people are doing it themselves, thanks to e-filing websites. The total number of e-filing in assessment year (AY) 2010-2011 was 9.15 million. This is about 25% of the total taxpayers’ base, which is estimated to be about 36 million. In the retail category, about three million e-filed last AY. A large chunk of this was done through the income-tax (I-T) department site and many were done by chartered accountants on behalf of their clients.
E-filing not only offers you the convenience of filing taxes anytime and anywhere, it also speeds up the process. Anil Rego, CEO and founder, Right Horizons, an investment advisory and wealth management firm says, “Since e-filing is fast and saves time, if you are expecting a refund, you get it sooner if you e-file your returns.”
Also see | E-filing Destinations (PDF)
You may be already e-filing your returns—the agent you hired may be doing so on your behalf. Says Rego, “Online filing of returns is definitely an option today and pretty safe. Many portals are user-friendly. Tax auditors have to file company ITR online compulsorily. Many tax consultants are also choosing the online route for e-filing of returns for their clients.”
It is likely that it becomes mandatory even for individuals to e-file their returns.
Where you can e-file
The I-T department itself offers the e-filing facility. Other sites offering e-filing include Taxspanner.com, Taxyogi.com, Taxsmile.com and taxshax.com.
Independent mutual fund portal, Fundsindia.com, has also tied up with Taxyogi.com to facilitate free e-filing. A few banks also let their file your returns online. For instance, Canara Bank Ltd, Punjab National Bank, Syndicate Bank and Dhanlaxmi Bank Ltd have a tie-up with Taxspanner.com.
How to e-file
Step 1: Gather all relevant documents—Form 16, permanent account number (PAN), statements of income from other sources, including savings bank account statements, investment proof, Public Provident Fund passbook and insurance policy details.
Step 2: Register with the site you choose and fill in your details in the applicable ITR form online. You could choose among the various packages available as per your requirements. A basic package is for salaried individuals and pensioners having an interest income and income from house property and income from other sources. Apart from providing basic facilities, the advanced package comes with value-added services such as review by tax experts.
You may also get year-round help for tax planning. The professional package is meant for those having their own consulting firms or for professionals.
Different sites, however, offer different features (see graph). For instance, Taxspanner.com lets you email your Form 16 and other details and files returns for you on its own. It also lets you file your ITR via Facebook at no extra cost.
The portals help you preview the form you fill and make changes if need be, for example, Taxyogi.com has an online chat service in case you get stuck midway.
While the I-T department lets you file your returns online for free, most other portals charge you a fee. Some portals offer free as well as paid service based on the package you choose (see graph).
Step 3: Make the payment after you have reviewed your form. In case you need to pay some tax, visit www.tin-nsdl.com , select the required challan and make a payment through Internet banking. Once you receive the challan identification number, acknowledging your payment, your taxes are paid. Ensure that you save a copy of the challans. Keep a hard copy, too.
Step 4: The portal will email your ITR form in a digital format (XML file). Upload this form at the I-T department’s website (www.incometaxindia.gov.in) after registering with it. Download the acknowledgement receipt (ITR V) and take a printout.
Sign the printout and send it to the I-T department, Bangalore, within 30 days of e-filing (see graph). Once you receive a confirmation from the department, your e-filing is complete. You can even sign ITR V digitally.
Some websites offer a digital signature, an electronic signature that authenticates your identity and your documents to the income-tax department. It comes for an extra fee. Suryadeep Agrawal, head marketing, Taxyogi.com, says, “Digital signatures are a bit expensive and have to be renewed every year. So in case you are opting for a digital signature just for filing returns, it’s better to just post the documents to reduce the cost.”
Filing reaches cellphones
Says Balwant Jain, chief financial officer, Apnapaisa.com, “Online tax portals are secured sites. But take appropriate guidance.” Doing it yourself could be as easy an online shopping. More importantly, the exercise will just increase your knowledge about your own finances.
While e-filing has picked up over the years with as many as around three million individual taxpayers opting for the facility last year, a new medium has entered the arena and promises to make the process easier. On 5 July, Taxspanner.com launched a new initiative, which enables you to file your returns via your cellphone. The facility, however, still needs a web interface but through your cellphone.
How it works
Visit Taxspanner.com website through your mobile. Says Ankur Sharma, co-founder, Taxspanner.com, “Once you visit the website over the mobile, our system with automatically take you to a customized and optimized single page format. Here, you need to provide four pieces of information—date of birth, father’s name, gender and address.”
The next step is to attach a copy of your Form 16 and press the submit button.
The portal will then prepare your tax file and file your returns. It will send you ITR V over your email. Sharma says, “It is a file first and pay later service.” The acknowledgement email will come with a link, wherein you can make payment via Internet banking.
The website also answers various tax-related queries. Just send your query at 9060000009. You don’t need to pay extra for this service, just the regular SMS charge. You also get to know the status of your refund through SMS.
Graphic by Yogesh Kumar/Mint