Online filing of tax returns has been around for a while and is a step toward greater transaction efficiency.
E-filing can be done in three ways depending on your understanding of the tax code. One, you can file directly with the tax department by creating a personal login account at www.incometaxindia.gov.in. There is little online help or customer service available and the software is not really friendly. Two, you can use the private online e-filing intermediaries who help you with the filing process with real-time help desk. This usually costs Rs200-800 for filing one person’s returns. Three, e-file through your chartered accountants, some of who are the e-filing gateway.
The process is usually very secure, but please use the same standards of safety when conducting other e-commerce transactions such as online banking or ticketing. Independent of whichever method you use, if after inputting your data the software calculates that you owe taxes, you will have to pay this tax before you can proceed with the filing. This payment can be made only at an authorized bank. For refunds, it’s still like the earlier process.
E-filing isn’t as seamless as the moniker suggests. There are a few caveats. One, you need to buy a digital signature that costs Rs400-1,500 and has a life of just two years. It takes a minimum of five working days to get one shipped to you. Two, it works smoothly only if you have all your data handy and complete. Else, you will not be able to finish the process in one sitting and will have to save your session and re-log into whichever system you choose. Three, don’t wait until the last week of the deadline. The department’s servers can get overloaded closer to the deadline, and this can cause additional frustration. Four, if you don’t have a digital signature and have to mail a hard copy of your ITR-V form to Bengaluru, you can only use normal postal services, not even speed post or registered post. Don’t expect an acknowledgement. About 10 days later you can check the department’s online system to see if it has been received. Finally, follow all the instructions in detail. Our experience has shown that when the data is incomplete, or instructions aren’t followed completely, it leads to delays and complications. Keep a copy of your completed ITR in digital or physical format.
Dhruv Agarwala and Kartik Varma are co-founders of New Delhi-based iTrust Financial Advisors.