Skip to content


Income Tax E-filing and its benefits

Posted in Finance, Income Tax, India.

What is E-Preparation of Income Tax Return?

E-Preparation of IT Return is the process of preparing your Income Tax Return using a software.

The E-Preparation  software can be of 2 types: Form-16

A. Manual Calculation:

Those that allow you to enter your Income Tax data but do not calculate the Income Tax & Refund etc. The individual user needs to calculate the above himself/herself

B. Auto Calculation:

Those that take the Income Tax related data that you have entered  to automatically calculate the Income Tax and Refund  using their  inbuilt  tax calculation engine that is updated for current rules

Auto Calculation Software  is more efficient and less prone to calculation errors.

What is E-Filing of Income Tax Return?

E-Filing of IT Returns is the process of electronically submitting your Income Tax Return to the Income Tax Department.

This electronic submission can be done in one of the following ways:E-Filing

A. Manually :

Where you  take the output of the software in XML or non-XML format , convert to XML in case of the latter and upload it  to the Income Tax Website.

B. Automatically:

Providers that are  Authorized E-Return Intermediaries of ITD,  are integrated with the Income Tax Department and authorized to E-File  your Income Tax Return. Such providers allow you to E-File your return with a click of a button.

XML upload  is tedious and  user may run into issues  for incorrect format or validation  error.

How do I sign my Income Tax Return when I E-File?

An ITR is an important document and the individual to whom it belongs needs to sign it – Manually or Digitally to affirm that (s)he has reviewed it and is the one who is officially submitting the ITR.

An IT Return can be signed in the following ways when it is being E-filed:Digital Signature

A. Digitally :

Use digital signature, in which case no further action is required. An acknowledgment of filing is provided instantly after submission.

B. Without  Digital Signature (paper signature):

You can  E-File without digital signature, in which case ITR-V form is to be physically signed &  filed with the department’s Bengaluru office  .ITR-V is a single page receipt cum verification form that is sent to the assessee via an e-mail from ITD.

Benefits of E-filing ITR

E-filing is easy, fast, and the most reliable and secure method

  • Fast Processing:  The acknowledgment of ITR submission is fast and the refunds are processed faster by the ITD for E-Filed ITRs.
  • More Accurate:  E-Filing software with built-in validations and electronic connectivity to ITD are seamless and help minimize errors.  Paper based filing with self calculations can be prone to error. Also, when any paper based form is transferred to electronic system , there is always a possibility of human error in data entry.
  • No Time place  constraint: You can file anytime, anywhere. E-Filing is available 24 hours a day, seven days a week , so taxpayers may always file at their own convenience.
  • More Secure than Paper based filing: E-filing is safer than paper based filing. With paper based filing your confidential identity information is lying in files and can be passed from person to person in the CA’s office or in ITD’s office.
  • You can easily access and use your data for future returns: Most of the paid E-filing software applications store your data in a secure manner and allow you to access it whenever you are ready to file subsequent returns.
  • It is good for the environment:  E-Filing is environment friendly. You just need to print  no or at most one page instead of multiple copies of multiple pages  that is required in case of paper based filing.

How to select an E-filing Software

AttributeLow EndHigh End
Tax CalculationYou calculate yourself Automatically Calculated
ITR generationPDF file for manual submission in local ITD Office Only or XML Direct transmission* to ITD
Data  Transmission to ITDYou upload XML Automatically transmitted*
Support to end usersNo Support provided or minimal support provided Support Staff can be accessed via email, chat or phone 24*7
SecurityLimited Over 128 Bit SSL to protect your confidential Information
Storage of past ITRNot Provided Provided so that you may import your previous ITRs data

* Provided by ITD Authorized E-Return Intermediary Only


150 Responses

Stay in touch with the conversation, subscribe to the RSS feed for comments on this post.

  1. Manoj Sinha says

    Hello Pankaj,
    I am a software freelancer. I receive my payment via Paypal in USD,however, which are transferred to my Indian bank account in Rupees. Please can you guide me what are the tax formalities I should go through,my earning would be about 8 lakhs/annum in INR?
    Should I considering something more in addition to filling income tax?

    Looking forward to your answers.
    Thanks.

    • Pankaj Batra says

      @Manoj
      You would need to declare this income as income from business/profession in income tax return and pay taxes on that.

  2. shankar says

    Sir,

    I have calculated that i have to pay 6000 Rs. as self assessment tax,if i pay the same through epayment on 3rd april ,later if i come to know that i have to pay 1000 Rs more before 31 st july can i make another epayment,are we allowed to make tax epayment more than once. thanks

    • Pankaj Batra says

      @Shankar
      You can make payments any number of times. There is no issue with that.

      • shankar says

        Thank you Sir.

  3. Thresiamma Kumar says

    Iam a pensioner retired from central gov. Trying to e-file my return.What shall I choose in the column employer-gov,psu,other,na. What shall I fill in the address of the employer-the office I retired from or the bank I received my pension from.

    • Pankaj Batra says

      @Thresiamma
      You should fill Gov in employer and address of last office from where you retired.

  4. Ashish says

    Hi Pankaj.

    I have one query. When I tried to e-file my income tax return, it computed tax 1 rupee more than that in form 16. How to handle this? Because of this 1 rupee, I am not able to file return with ‘Tax Status: Nil’. Is there any legal way to ignore this one rupee? I think, this problem should have been already faced by lot many people, because employer generally rounds of taxable income to nearest multiple of 10 and then calculate tax, but, in e-filing, it is not rounding off.

    Please provide your view on this.

    Regards,

    Ashish

    • Pankaj Batra says

      @Ashish
      There is no issue for amount less than Rs 10.
      The total tax payable field in income tax return forms are editable and you can put 0 in it and file return.

      • Jagu says

        Once I generate the XML the excel tool is not allowing me to modify.

        Can I modify the xml itself ?

        thanks,
        Jagu

        • Pankaj Batra says

          @Jagu
          ITR excel utility file allows editing even after generation of XML.
          You can edit excel file and generate XML again in case you require any change.

          Its not advisable for public to modify XML as may loose its formatting/tags. IT professional like you can edit if you are comfortable with it.

          • Jagu says

            Thanks for the quick reply
            To continuation to above question , I ‘m also facing same issue of 1 Re more with excel utility and its less in Form-16.
            So “Tax Payable (15-17) (if 15 is greater than 17)” having value 1 but for the
            Tax Status it is showing value as “Nil Tax Balance” ,

            Do I need to change the value to “Tax Payable” ?
            Also Do I need to pay this 1 Re ?

            • Pankaj Batra says

              @Jagu
              Rs 1 won’t be an issue. Its due to round off to nearest 10 rs.
              Tax payable on total income field in ITR excel is editable, just reduce it by Rs 1 and issue would be solved.

  5. Ashish says

    Pankaj… can u pls review below and advise if it is correct?

    Income from Salary is 789,892. Thus, total income was coming as Total Income (4 – 6) = 669,892. I wanted to round off Total income to nearest multiple of 10, but, since the cell is protected, I rounded off first row i.e. Income from Salary to 789,890. Is this correct? I already submitted the return electronically. Only thing pending is to send ITR V to CPC. Waiting for your valuable assistance..

    1 Income from Salary / Pension (Ensure to fill Sch TDS1) 789,890
    2 Income from one House Property 0
    3 Income from Other Sources (Ensure to fill Sch TDS2) 0
    4 Gross Total Income (1+2+3) 789,890
    5 Deductions under Chapter VI A (Section) System Calculated
    6 Deductions (Total of 5a to 5m) 120,000
    7 Total Income (4 – 6) 669,890

    • Pankaj Batra says

      @Ashish
      In-spite of editing income, you could have edited tax computed by income tax return sheet.

      • Rajeev says

        Hi Pankaj,
        I am also facing a similar issue. The tax paid in the F16 is 1 Re greater than the tax calculated by the utility. As you have suggested, I have tried to edit the tax calculated. At first it allows me but when I generate XML, it reverts the tax amount to the calculated figure.

        So can I reduce 1 re in the tax paid sheet and make Nil Tax Balance and submit the returns?

        I appreciate an early response from you in this regard.

        Thank you,

        Rajeev Prabhu

        • Pankaj Batra says

          @Rajeev
          There is as such no need to reduce tax paid amount. As per IT rules, amount less than Rs 10, does not matter.
          You can submit returns even with 1 Rs balance.

  6. KM gupta says

    If total income is more than 10.00 Lacs and total taxable income after deduction under chapter VI A is less than 10.00 lacs. then is it compulsary to file return online through e-filing.

    • Pankaj Batra says

      @K M Gupta
      You would need to file online only as total income is more than 10 lacs.

  7. sateesh says

    Hi Pankaj,

    I have filed my IT Returns using ITR1 today. But I missed to fill the BSR codes and its details. in the TDS sheet of the excel file.

    But later I realized that, i missed them and those details are available in my Form16.

    Now, my question is. Can I refile my ITR1 ? If so , what do I need to do before filing again. Do i need to make any changes in the excel sheet?

    Please let me know.

    Thank you.
    Sateesh.

    • Pankaj Batra says

      @Sateesh
      In case of TDS done by employer from salary, entering BSR code and other details is not needed. If tax is paid by yourself as self assessment/advance tax, then its needed.

  8. ravindra says

    Hi Pankaj,
    I am in 30% Tax bracket, and have earned bank interest of 50000. Bank has deducted TDS at 10%. I have to pay remaining tax, but as TDS certificate is issued by back after 31st March, I am paying remaining tax as self assessment tax. But if I use ITR1 xls to file my return it is showing me interest penalty. do I have to pay interest or is there some way to avoid this in xls sheet.
    thanks,

    • Pankaj Batra says

      @Ravindra
      If pending tax is above Rs 10,000 then interest penalty arise for late payment of income tax u/s 234B and 234 C.
      TDS certificate may be issued by bank after 31st March, but interest would have already paid to you. So its your responsibility to pay income tax on interest income within time frame.
      You will have to pay pending income tax interest as computed by ITR excel.

      • ravindra says

        Thanks Pankaj for quick reply.

        • ravindra says

          One more question, can I instruct bank to deduct TDS at 30%.

          • Pankaj Batra says

            @Ravindra
            There is no as such provision to instruct bank for higher TDS.
            However you may declare this extra income to your employer (if you are salaried) and get tax deducted from salaries by them.

  9. Vicky says

    Hi,

    Need help, I have fill correctly form 16 detail in efile excel, in my case its straight forward, all tax already paid by employer. Nothing to paid or refund, now when I am clicking Calculate Tax button its pulling extra amount in row 14.Total Interest u/s 234A 234B 234C, I am little confuse why its pulling intrest as there is no deadline mate yet for filing tax. Any idea about ? Do I need to pay an extra intrest amount ?

    • Pankaj Batra says

      @Vicky
      Looks like something is incorrectly filled in ITR.
      Can you check if total tax computed as per ITR excel calculation has been paid as TDS. Also check if TDS details have been correctly filled in TDS sheet of ITR.

  10. anita vij says

    Sir,

    While uploading itr-2 the following message is coming. How to upload itr-2.

    Error is due to change in Schema.
    Please use the latest version of utility available on the website for filing your return.

    Schema check failed.XML Document has following Error:

    Error 1: Line number: 180 , Column number: 38

    Message: Value ” is not facet-valid with respect to enumeration ‘[YES, NO]’. It must be a value from the enumeration.

    Error 2: Line number: 180 , Column number: 38

    Message: The value ” of element ‘ITRForm:PropCoOwnedFlg’ is not valid.

    Error 3: Line number: 204 , Column number: 3

    Message: Value ” is not facet-valid with respect to enumeration ‘[YES, NO]’. It must be a value from the enumeration.

    Error 4: Line number: 204 , Column number: 38

    Message: The value ” of element ‘ITRForm:PropCoOwnedFlg’ is not valid.

    Please rectify these error and upload again.

    Please guide Sir.
    Regards,
    Anita

  11. Manish says

    Hi Pankaj.
    Nice work bro.

    I have few doubts, can you please help me on this.

    I have worked for two companies last year. For the first company i have paid the tax of around 1400 Rs and for my next company i have not submitted the income from my last company so no tax was being deducted as the income from my second company was below the 180000 limit. Now once i started efiling ITR1, excel sheet showed me a balance of 9000Rs which i need to pay to the govt.

    My queries is.
    1. Where to submit this 9000Rs.
    2. Do i need to pay interest also on this 9000Rs. If yes what is the interest rate.
    3. Once i deposit this amount what all information regarding this submission i need to put on ITR1 form.

    • Pankaj Batra says

      @Manish
      1. To pay pending taxes, Check “Pay your tax online” section on this post: http://www.pankajbatra.com/india/file-income-tax-return-online-yourself/
      2. As pending amount is less than 10K, no interest penalty is payable.
      3. Once you pay taxes, you will have to fill section 25 under TDS sheet (Details of Advance Tax and Self Assessment Tax Payments). On payment of taxes, you will get details like BSR Code, Date of credit/payment, Serial Number of Challan and Amount paid.

  12. Narsimha says

    Hi Pankaj,

    I try to register e-filing login but it through so many errors like

    •Your mid name doesnt match with the data you entered..
    •Your surname name doesnt match with the data you entered..

    How can i get exact details of PAN card details. I tried what ever details i have on PAN card.

    • Pankaj Batra says

      @Narsimha
      You may call Efiling call center on 080-26982000, 1800-425-2229, 0124-2438000 or 080-43456700 to get help.

  13. madhura says

    Hi Pankaj,
    I try to convert my ITR-1 to xml format and not able to do it. I,m getting error message check ur income and tax. Please find my Form 16 details and advice.
    Waiting for your valuable assistance.

    1Income from Salary / Pension (Ensure to fill Sch TDS1) 781491.96
    2 Income from one House Property -150000
    3 Income from Other Sources (Ensure to fill Sch TDS2) 0
    4 Gross Total Income (1+2+3) 631491.96
    5 Deductions under Chapter VI A (Section) System Calculated
    6 Deductions (Total of 5a to 5m) 100,000
    7 Total Income (4 – 6) 531491
    8 Tax payable on Total income : 37298
    9 Education cess : 1118.94
    10 Total Tax 38416
    11 Total Tax Deducted 48514
    12 Refund 10097
    regards,
    madhura

    Read more: http://www.pankajbatra.com/india/income-tax-e-filing-benefits/#ixzz22198rj5M

    • Pankaj Batra says

      @Madhura
      Before generation of XML, click on validate button on each sheet.
      You need to also fill TDS details in TDS sheet as per form-16.
      All green fields under ‘Taxes paid and Verification’ sheet are also manadatory to fill.

  14. Dheeraj says

    Hi, Nice article. My father was e-filing his tax return. He had manually calculated the tax and paid all of it. But it seems there are about 7K he must pay as interest u/s 234 B&C. Since last date of filing is tomorrow, even if he e-pays the tax it will not be credited in his account on time. How should he file his return? Should he pay the money today and file the ITR with Status -Tax Payable. The nwhen money is credited into govt. account revise the return to show Tax status – NIL. Should 1% penalty u/s 234 A also be considered before paying the balance of Rs 7K (Since date of credit in govt. acount will certainly be after 1 Aug 2012)

    • Pankaj Batra says

      @Dheeraj
      You can pay remaining taxes online and use BSR code, Challan no immediately. Taxes paid even on 31st July should be considered as deposited with govt on time.

  15. Arun says

    Hi Deepak,

    I have a qurey in paying the tax. I am a software engineer and had worked in 2 companies for tis financial year. I already filed my returns, but forgot to pay the remaining tax(my previous company had not cut tax from my salary). My question is in Challan no. 280 what should i select under “Tax Applicable” – 0020 or 0021 and under “Types of payment” (300) or (400).

    Thanks in advance.

    • Pankaj Batra says

      @Arun
      Select challan type as CHALLAN NO. ITNS 280 and continue. Select (0021) INCOME-TAX (OTHER THAN COMPANIES) in tax applicable field and Select (300) SELF ASSESSMENT TAX in type of payment. Select bank through which you want to pay.

  16. vikram17000 says

    Hello – while filing return for ITR1, I’m getting the below error. Any clues? Have taken the latest version of the form…

    Error is due to change in Schema.
    Please use the latest version of utility available on the website for filing your return.

    Schema check failed.XML Document has following Error:
    Error 1: Line number: 129 , Column number: 69
    Message: Value ‘2632’ is not facet-valid with respect to pattern ‘[a-zA-Z0-9][a-zA-Z0-9][a-zA-Z0-9][a-zA-Z0-9][a-zA-Z0-9][a-zA-Z0-9][a-zA-Z0-9][a-zA-Z0-9]’ for type ‘null’.
    Error 2: Line number: 129 , Column number: 69
    Message: The value ‘2632’ of element ‘ITRForm:UniqueTDSCerNo’ is not valid.
    Error 3: Line number: 139 , Column number: 69

    • Pankaj Batra says

      @Vikram
      Can you please make sure that you are using 2012_ITR1_PR21.xls the latest version of file.
      If this is correct, this error should not come.

  17. sushila says

    i am a defence family pensioner. i was sanctioned family pension wef jan 2010 and got the family pension for FY 2011-12 along with arrears of FY 2009-10 & 2010-11. Point on which clarification sought is (i) whether under column A17 of ITR1 i shd mention NA/Gov/or others. (ii) whether amt of family pension shd be mentioned in col. B3 as income from other sources after deducting Rs 15000/- + interests from FDs. (iii) whether i can claim relief u/s 89 in col D4. in r/o arrears of FYs 2009-10 &2010-11. (iv) how to send Form 10E and Annex.1 if i am efiling my tax return and (v) can i rectify the ITR1 already filed by correcting information wherever necessary….i have as yet not sent the ITR-V (Verification Form)

    • Pankaj Batra says

      @Sushila
      1. As you are not employed by government, you can fill ‘Others’ in employer category.
      2. Amount of pension should be entered under Income from Salary/Pension section. Interest from FDs should be mentioned in Income from other sources.
      3. Yes, you can claim relief u/s 89 for arrears received for earlier years.
      4. There is no need to send any supporting documents along with ITR-V in case of online filing. If IT department needs, they can ask for it later.
      5. You need to file a revised return now and have to send both original and revised ITR-V now. Read more here: http://www.socialfinance.in/questions/3419/revised-income-tax-return

      • sushila says

        Thanks for your prompt clarifications on the points raised by me. However, in one of the sites which i have visited , holds a different view. The position stated therein is quoted below:-

        ” Deduction in respect of family pension (chargeable under the head “Other Income)”:
        Section 57(iia) provides that in the case of income in the nature of family pension, a deduction of a sum equal to fifteen thousand rupees or one third of such income, whichever is less, is available. For the purpose of this clause the term “family pension” means a regular monthly amount payable by the employer to a person belonging to the family of an employee in the event of his death. Please note that in such cases the amount received by the spouse/dependents of the employee from the employer would be taxed in the hands of the spouse/dependent under the head “Income from other sources” and not under “Salary”.

        In view of the above, i would request you kindly to let me know the correct position to enable me to revise my online ITR 1 accordingly.

        • Pankaj Batra says

          @Sushila
          Sorry for earlier reply (family pension was totally ignored and reply was based considering as normal pension).
          Deduction of Rs 15000 or one third of income (whichever is less) u/s Section 57(iia) would be available and income should be shown under income from other sources.

          • sushila says

            Sir,
            i view of the above confirmation, and since the amount received as family pension is to be shown as income under “other sources” will I still be entitled to claim relief under Sec 89 . As per Form 10 E, the relief under sec 89 can be claimed by a Govt. servant or an employee in a company, cooperative society etc. My status is neither that of a govt. servant nor an employee of a company etc. If i am not entitled to claim relief under Section 89, then i will have to rework the tax calculations on the total amount received (inclusive of arrears) as Family Pension during FY 2011-12 and deposit tax due with penal interest. Pl advise.

            • Pankaj Batra says

              @Sushila
              I think, relief u/s 89 can also be taken for family pension. This is as per rule 21a(1).

              • sushila says

                Thanks

1 2 3



If you have a Question, Click here to Ask!