Filing ITR for the First Time? 10 Tips for a Smooth Income Tax Return Process

Filing your Income Tax Return (ITR) for the first time can seem daunting, especially if you’re unfamiliar with the process. It’s essential to select the correct ITR form based on your income profile to ensure an accurate and compliant filing.

For the Assessment Year 2024-25, understanding the filing process, organizing necessary documents, and identifying the applicable ITR form are crucial steps. Each ITR form outlines various income categories, deductions, and exemptions. Based on this information, your total taxable income and tax liability are calculated for the relevant financial year.

Your income reported in the ITR can come from multiple sources—such as salary, business or professional income, rental earnings, or capital gains. Additionally, you are required to disclose income from other sources like interest, dividends, and royalties.

The Income Tax Department has released seven ITR forms (ITR-1 to ITR-7) for filing returns for FY 2023-24. The selection of the appropriate form depends on your source of income, total earnings, and taxpayer category. Since each form serves a different taxpayer profile, selecting the right one is key to filing a precise and legally compliant return.

For those new to income tax filing, understanding the process can make it significantly smoother. Anitta Babu shares key steps to help beginners e-file their Income Tax Returns (ITR) with ease:

1. Learn the Basics:
Income tax is a direct tax levied on earnings. The Financial Year (FY) runs from April 1 to March 31, while the Assessment Year (AY) follows it, during which income is evaluated and taxed.

2. Collect Necessary Documents:
Having your documents in place speeds up the process. These include:

• PAN Card
  
  

• Form 16 from your employer
  
  

• Bank statements
  
  

• Investment proofs (e.g., ELSS, PPF)
  
  

• TDS certificates
  
  

• Form 26AS – a consolidated statement of tax deducted and deposited on your behalf
  
  

3. Register on the E-Filing Portal:
If you’re filing for the first time, register on the Income Tax e-filing website.
Steps include:

• Choose ‘Taxpayer’ and validate your PAN
  
  

• Fill in your personal details and verify via OTP
  
  

• Create a secure password and complete registration
  
  

4. Select the Appropriate ITR Form:
Using the right form ensures accurate filing:

• ITR-1 (Sahaj) is meant for individuals earning up to ₹50 lakh from salary, one house property, and other sources like interest.

• ITR-2: For individuals and HUFs not having income from business or profession.

• ITR-3: For individuals and HUFs having income from a proprietary business or profession.

• ITR-4 (Sugam): For presumptive income from business or profession.

5. Check Form 26AS:
Form 26AS provides a consolidated view of all taxes deducted on your behalf and those you’ve paid. It’s essential to verify that the entries match your TDS certificates and financial records. You can access and download it through the income tax e-filing portal.

6. Make the Most of Deductions:
Use eligible deductions to lower your taxable income. Some key sections include:

• Section 80C: Up to ₹1.5 lakh for investments like PPF, EPF, NSC, and life insurance
  
  

• Section 80D: Premiums paid on health insurance policies
  
  

• Section 80TTA: Up to ₹10,000 on savings account interest
  
  

• Section 24(b): Interest on home loans up to ₹2 lakh
  
  

7. Disclose All Income Sources:
Be sure to declare every source of income, including salary, savings interest, rental earnings, and freelance work. Omitting income can lead to penalties and possible scrutiny by the tax department.

8. File Within the Due Date:
Timely filing of your return—usually by July 31—helps you avoid late fees, which can be as high as ₹10,000. Early filing also gives you more time to rectify mistakes and reduces the pressure of last-minute submissions.

9. Take Expert Advice if Necessary:
If the filing process feels confusing or if you have diverse income streams, it’s wise to consult a tax expert. A professional can help ensure that your return is complete, compliant, and optimized for any available benefits.

10. Maintain Proper Documentation:
Preserve copies of your ITR, acknowledgment, and all relevant documents. These records are useful for future filings, loan applications, or if any clarifications are sought by the tax authorities.

Conclusion:

Filing your Income Tax Return (ITR) for the first time can feel overwhelming, but with the right approach, it can be a smooth and hassle-free experience. By familiarizing yourself with the fundamentals, preparing all necessary documents, selecting the correct ITR form, and following each step diligently, you can file your return accurately. Timely and correct filing not only helps you stay compliant with tax laws but also fosters disciplined financial planning for the future.