Tax filing: Five easy steps to file income- tax returns for the first time

It is possible for individuals and HUFs to file ITR-3 if they have income from other sources, such as salary, pension, or capital gains.

If you are planning to file your income tax return (ITR) for the first time, it is crucial to understand that you can only file your return in electronic mode (e-filing) through the income tax website. However, there is an exception for very senior citizens aged 80 years or above, who can file their return of income in paper mode if they meet specific criteria.

But, for the majority of individuals, regardless of whether they file their return independently, seek assistance from a chartered accountant or tax expert, or utilise the services of private tax filing portals and intermediaries, filing ITR online is mandatory.

To proceed with online filing, you must have an account on the Income Tax e-Filing portal, which can be accessed at https://www.incometax.gov.in/iec/foportal/. Before you begin the process of filing your return, it is essential to familiarise yourself with a few key aspects of your Income Tax e-Filing account. Let’s have a look at these aspects.

Who needs to file an income tax return?

As per Income Tax Act 1961, it is compulsory to file your income ITR if your income is more than the basic exemption limit. For financial year 2022-23 (assessment year 2023-24) for which the due date to file a return of income is up to July 31, 2023, the basic exemption limit is up to Rs 2.5 lakh for those below the age of 60 years, up to Rs 3 lakh for those between the age of 61 to 80 years, and up to Rs 5 lakh for those above the age of 80 years.

Besides that, there are a few other circumstances where filing of return becomes necessary. For instance, if you had capital losses in the financial year that you wish to carry forward to the subsequent year for adjustment against subsequent year(s) positive income, you must make a claim of loss by filing your return before the due date. Other criteria that make it mandatory to file returns include if your credit card bill or foreign tour exceeds a certain amount, if you own or earn any income from a foreign country, and so on, you need to file ITR.

Also read | ITR filing: Annual Information Statement gets bigger, but crucial omissions give taxpayers a headache

How to register and create an e-filing account?

Go to https://www.incometax.gov.in/iec/foportal/, the official portal of the Income Tax Department, Ministry of Finance, Government of India. This portal provides single-window access to income tax-related services for taxpayers. As on June 26, 2023, there are 11,14,48,568 individual registered users on this portal. To register yourself, click on the ‘Register’ tab for new users on the top right-hand side of the portal.

Once you click on the registration tab, it will ask you to provide the 10-digit alphanumeric permanent account number (PAN). This is to verify whether you have an authentic PAN number or not and whether it is already registered or not with the department.

After your PAN is validated, the second step involves confirming your registration as an ‘Individual taxpayer’. It is crucial to ensure that your status is correct, as subsequent screens will rely on this information.

Additionally, you will need to provide your last name, middle name, and first name. It is essential to enter accurate details that match the information on your PAN, as these will be validated upon clicking the ‘Continue’ tab. You will also be required to select your gender and residential status.

For verification purposes, you must provide a primary mobile number and email Id. It is important to confirm whether these contact details belong to you or someone else.

In the third step, you will be prompted to provide your postal address. Remember that all the aforementioned information is mandatory for filing. Ensure that you carefully provide accurate information at each step of the registration process to avoid any discrepancies and facilitate a smooth and successful registration.

At last, you will be asked to set a password. Once you click ‘Continue’, a six-digit OTP1 and OTP2 will be shared on your mobile number and email ID, specified at the time of registration. Enter the correct OTPs to complete the registration process.

Also read | ITR filing: Claiming tax deductions without proofs can backfire, warn CAs

E-filing vault for higher security

Upon creating your account, it is highly recommended to prioritise setting up the e-filing vault. This additional security feature adds an extra layer of authentication when logging into your e-filing account, safeguarding your financial information from unauthorised access. By opting for the e-filing vault, a one-time password (OTP) will be required each time you or anyone else attempts to access your e-filing account.

Given that e-filing accounts store vital financial details such as your PAN, address, bank account information, tax deductions, and past income tax return history, it is crucial to ensure the utmost security for your account. The e-filing vault feature effectively fulfils this purpose.

To utilise the e-vault facility, go to the 'Profile settings' tab and locate the 'E-filing Vault - higher security' option. Click on it to select one or more higher security methods: Aadhaar linkage for OTP generation, net banking, or a Digital Signature Certificate (DSC). Once you make your selection, the next time you log in, an additional authentication step using Aadhaar, net banking, or DSC will be enforced. For instance, if you choose net banking, you will need to log in to your net banking account to access the e-filing portal. To use Aadhaar or DSC, you must first register these details with your e-filing account.

By taking advantage of the e-filing vault, you can enhance the security of your e-filing account and ensure the privacy and integrity of your financial data.

Also read | Income-tax shocker: Data on advance tax payments missing in prefilled return forms

Update other information

After enhancing the security of your account, navigate to the ‘Your Profile’ section and review the accuracy of your personal information, including your name, date of birth (DOB), and address. It is important to ensure that all details are correct. If need be, you can edit and update the information. Additionally, you have the option to add your bank account details and nominate a specific account to receive any potential refunds.

Furthermore, you have the choice to provide details of your demat account and register a DSC, although these steps are not mandatory.

In addition, if you seek assistance or guidance from an e-return intermediary or a chartered accountant for tax filing and related services, you can add their information to your profile.

Under certain circumstances, you may register to act as a representative assessee for another individual, enabling you to carry out activities on their behalf within the e-filing platform. Alternatively, you can register another person to act as your representative in specific situations.

Also read | Income tax returns: Types of TDS certificates and why they are needed

The other uses

While the primary purpose of registering and creating an account with the income tax department is for e-filing tax returns, it's important to note that the account can be utilised for various other purposes as well. Apart from filing returns, the account provides access to a range of information and documents.

For instance, within your account, you can view and download previous tax returns, Form 26AS, Annual Information Statement (AIS), and more. Additionally, the account can be used to address grievances related to the e-filing portal registration, profile or password issues, verification of ITR/Forms, e-proceedings, Instant PAN (e-PAN) through Aadhaar, or income tax-related cybercrime concerns.

Similarly, if you have any grievances pertaining to refund processing, the rectification of errors, correction of demand, appeal orders, PAN-related applications, or any other miscellaneous applications pending with the Assessing Officer (AO), you can raise these issues through your account.