A Guide to Income Tax Filing For The First Time

If you're a first-time filer for your income tax return (ITR), it's important to note that electronic filing (e-filing) through the income tax website is the only option available. However, there is an exception for individuals aged 80 years or above, known as very senior citizens, who can choose to file their income tax return in paper mode if they meet specific criteria.

For most individuals, regardless of whether they file independently, seek help from a chartered accountant or tax expert, or utilize private tax filing portals and intermediaries, filing ITR online is mandatory.

To start the online filing process, you must first have an account on the official income tax portal which can be accessed from this link. Before proceeding with the ITR filing process it is crucial to acquaint yourself with several important aspects of your Income Tax e-Filing account. One of them is “Who is required to file an income tax return? 
 

Who is required to file an income tax return? 

Under the provisions of the Income Tax Act 1961, it is mandatory to file your income tax return (ITR) if your income exceeds the basic exemption limit. 

For the financial year 2022-23 (assessment year 2023-24), the deadline to file your income tax return is July 31, 2023. The basic exemption limit varies based on age categories. 

For individuals below the age of 60 years, the limit is up to Rs 2.5 lakh. For individuals between the age of 61 to 80 years, the limit is up to Rs 3 lakh. For individuals above the age of 80 years, the limit is up to Rs 5 lakh.

In addition to the basic exemption limit, there are several other circumstances that require filing an income tax return. For example, if you incurred capital losses in the financial year and wish to carry them forward to offset against future positive income, you must claim the loss by filing your return before the due date.

Other criteria that make it necessary to file income tax returns include exceeding a certain threshold for credit card bills or foreign tours, having ownership or earning income from a foreign country, and other similar situations. In such cases, it is mandatory to file your income tax return (ITR).

How to create an e-filing account on the portal?

To access income tax-related services for taxpayers, you can visit the official portal of the Income Tax Department, Ministry of Finance, Government of India at https://www.incometax.gov.in/iec/foportal/. This portal offers single-window access to various income tax services.

As of June 26, 2023, there are 11,14,48,568 registered individual users on this portal. If you are a new user and wish to register, you can find the 'Register' tab at the top right-hand side of the portal.

Upon clicking the registration tab, you will be required to provide your 10-digit alphanumeric Permanent Account Number (PAN). This step is to verify the authenticity of your PAN number and whether it is already registered with the Income Tax Department.

After successful PAN validation, the second step involves confirming your registration as an 'Individual taxpayer'. It is crucial to ensure that your status is correctly selected, as subsequent screens will rely on this information.

You will also need to provide your last name, middle name, and first name, ensuring accuracy and consistency with the information on your PAN. Gender and residential status selection are also required.

For verification purposes, you must provide a primary mobile number and email address. It is important to provide your personal contact details that belong to you.

In the 3rd step, you will need to provide your postal address. It is essential to accurately provide this information as it is mandatory for filing.

Finally, you will be asked to set a password. Upon clicking 'Continue', a six-digit OTP1 and OTP2 will be sent to your specified mobile number and email address. 

Lastly, enter the correct OTPs to complete the registration process successfully.

Common Mistakes to Avoid While Filing Tax Returns

When filing income tax returns for the first time, it's crucial to be aware of common mistakes that many first-time filers tend to make. A common mistake is not identifying and understanding the errors that can occur during the filing process. 

It's important to familiarize yourself with the common pitfalls, such as incorrect data entry, missing out on eligible deductions, or selecting the wrong ITR form. By being aware of these mistakes, you can take proactive measures to avoid them.

To avoid these mistakes, here are some tips and guidance for first-time filers. Firstly, ensure that you gather all the necessary documents and information before starting the filing process. This includes your PAN card, Aadhaar card, bank statements, and relevant financial documents. 

Secondly, take the time to understand the different ITR forms available and choose the correct one based on your income sources and the nature of your income. This will help you provide accurate information and prevent any discrepancies.

Another important tip is to double-check all the entered information before submission. Carefully review your personal details, income sources, and deductions to ensure accuracy. 

Verify the calculations and cross-reference the figures with your supporting documents. By thoroughly reviewing the information, you can identify and rectify any errors or omissions, ensuring that your return is filed correctly.

The importance of double-checking cannot be stressed enough. Small errors or oversights can have significant consequences, including delayed refunds or even penalties. Taking the time to review your filing can save you from unnecessary hassles in the future. 

Note: It is advisable to consult a tax professional or use online tools provided by the income tax department to validate your return.

Summing it up, by being aware of common mistakes, following the provided tips and guidance, and double-checking the entered information, you can avoid potential errors when filing your income tax return for the first time. Being diligent and meticulous throughout the process will help ensure that your return is accurate, compliant, and submitted on time.

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