Filing Income Tax return for the first time? Here's a step-by-step guide

Completing the process even if your income is below taxable limit establishes financial credibility, say experts

Filing your Income Tax Return (ITR) for the first time can seem daunting but it's a simple process. The Income-Tax Department India has made electronic filing user-friendly. Here's a step-by-step guide to help first-time filers.

 

Who needs to file an ITR?

Even if your annual income is below the taxable limit, you need to file ITR in certain situations:

 

• If you have deposited more than Rs 1 crore in a bank account. 
• If you have incurred expenses exceeding Rs 2 lakh on foreign travel. 
• If your electricity consumption is more than Rs 1 lakh in a year.

 

These criteria are outlined by the department to ensure compliance and transparency in financial transactions.

 

 

Should you file an ITR even if you are below tax limit?

 

“Not filing an ITR even if you’re earning below the taxable threshold is a lost advantage,” said Vishwanathan Iyer, senior associate professor of finance and accounting at Great Lakes Institute of Management, Chennai.  Calculate Income Tax: Income Tax Calculator Tool

 

“It’s no longer just a compliance measure, it’s essential to establishing financial credibility and showing foresight,” said Amit Bansal, partner at Singhania & Co.

 

“Filing an ITR helps establish a financial record with the government and builds credibility with financial institutions. In today’s digitised economy, a consistent ITR history may serve as a valuable asset in the long run,” he said.

 

Documents needed to file ITR

   

Before you begin, gather the following documents:

• PAN and Aadhaar cards 
• Form 16 (provided by your employer) 
• Bank account details 
• Investment proof (for deductions under sections like 80C, 80D) 
• Interest certificates from banks or post offices

 

Step-by-step guide of filing ITR

 

1. Register on the e-filing portal

 

• Visit the Income Tax e-Filing portal: https://www.incometax.gov.in/iec/foportal 
• Click on 'Register' and select 'Individual'. 
• Enter your PAN, which will serve as your User ID. 
• Provide the necessary details and complete the registration process.

 

2. Log in to your account

   

• Use your PAN as the user ID and the password you set during registration to log in. 
• Complete the captcha verification.

 

3. Select 'File Income Tax Return'

 

• Go to the 'e-File' menu and click on 'File Income Tax Return'. 
• Choose the appropriate assessment year (e.g., 2025-26 for the financial year 2024-25). 
• Select 'Online' as the mode of filing.

 

4. Choose the correct ITR form

• For most salaried individuals, ITR-1 (Sahaj) is applicable. 
• If you have income from multiple sources, such as capital gains, consider ITR-2 or ITR-3

 

5. Fill in the required details

• Personal information (name, address, contact details). 
• Income details from Form 16 and other sources. 
• Deductions under various sections (e.g., 80C, 80D). 
• Bank account details for refunds.

 

6. Review and submit

 

• Verify all the information entered. 
• Click on 'Preview and Submit' to review the summary. 
• After review, click 'Submit'.

 

How to verify your ITR  After submission, you must verify your return. You can do this:

• Electronically via Aadhaar OTP. 
• Through internet banking. 
• By sending a signed physical copy of ITR-V to the Centralized Processing Centre (CPC) in Bengaluru.

 

Deadline of filing ITR

 

For FY25 (assessment year 2025-26), the last date to file ITR has been extended to September 15. Filing after this date may attract penalties