Hardly a week is left to file your income tax returns. By this time you should be ready with your tax calculations and about to file your income tax return.

However, gone are the days when you or your tax consultant had to stand in a long queue at the Income Tax Department to file income tax return. Various avenues have been opened by the Income Tax Department for filing income tax returns and this will reduce your hardships to a great extent.

Types of filing

Broadly, there are two ways in which you can file your income tax return for this year:

• Traditional paper method
• Electronic filing

Under the traditional paper method, you have to fill up the return form (on computer or by hand) and physically deliver it to the Income Tax Department, whereas under electronic filing you have to convert the income tax return into an e-file format (or the XML format) and submit the same to the Income Tax Department through Internet.

Traditional paper method:

Since ages we have been following this method of income tax return filing. First fill the lengthy return form, then go to the Income Tax Department and stand in a long queue, and then get it filed. However, you have some relief on this count. Instead of standing in long queue, a taxpayer can also file the income tax return at the nearest post office.

• DON'T MISS: Guidelines to filing your income tax return

For filing the income tax return at any post office, the taxpayer has to enclose the return in a sealed cover, mention the name of taxpayer, address, Permanent Account Number (PAN), assessment year and jurisdiction of the assessing officer and submit to the post office. The officials of the postal department will issue a receipt for the cover received which serves as your acknowledgement.

Useful links for you:

• To find out which is the nearest Income Tax Office in your city, click here.
• To find out which post offices accept income tax returns, click here.

Electronic filing:

The process of electronically filing your income tax returns through the Internet is known as e-filing of returns. This is widely used all over the world. It saves taxpayers from many hassles and makes filing of tax returns very convenient and easy.

For electronic filing, you must have a software application available to generate the income tax form. This software application must also be able to convert the details of the form into an acceptable format (called the XML format), which has to then be uploaded to the e-filing server of the Income Tax Department.

Benefits:

The benefits of electronic filing, as stated by Income Tax Department are:

• Anywhere / Anytime filing
• No personal interface
• Quick processing of return
• Direct credit of refunds in bank account
• Return tracking
• Permanent record

Types of e-filing

Electronic filing can be divided into two types:

Paper e-filing: Under this, after uploading the file to the server of the Income Tax Department you will have to print two copies of acknowledgement and file one copy physically at the Income Tax Department.

Paperless e-filing: Under this, you will require a digital signature to sign the XML file while uploading it to the Income Tax Department server.

How to e-file

The process of electronically filing your income tax return is as under:

• Create and save your Electronic file.
• Visit www.incometaxindiaefiling.gov.in.
• Create your user-id, password and login.
• Click 'Submit Return' button available on left panel of the screen.
• Browse and select your XML file.
• If you have a digital signature, use the same.
• Click on 'Upload' button.
• On successful uploading of return, form ITR-V will be shown on the screen.
• If you have used a digital signature, this will be your proof of filing.
• If you have not used digital signature, take two print-outs of ITR-V and physically submit one copy to the Income Tax Office within 15 days of e-filing.

Having known about various types of filing, you should now be induced to file your returns early. And you better be, because if you miss your due date, there are consequences. Do know them.

What if you do not file tax returns by July 31. . .

• In case of loss on account of interest on housing loan or loss in share market transaction, you will not be allowed to transfer such loss to next year.
• If while filing, there is any unpaid amount of tax, you will have to pay a penal interest @1% per month.
• In case of refund, interest on refund will be granted only from the period the return is filed till issue of refund. However, if you file your return in time, interest will be granted from the beginning of the assessment year.
• In case of any mistake while filing return of income, you will not be allowed to revise your income tax return.
• Further, if you file your income tax return after March 31, 2008, you will be liable for a penalty of Rs 5,000, in addition to the above consequences.
• If you don't file your return at all, it will be presumed that you have concealed your income and this would make you liable for a penalty. In certain cases, you may even be liable for prosecution for not having filed returns with the intention of willfully avoiding tax payments.

Hence better file your returns, in time and relax.

• All you want to know about PAN

The author is Group Head-Direct Taxes and founder member of Taxsmile.com India Pvt. Ltd. He is a practicing chartered accountant with over 10 years of experience.

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