Under the Income Tax Act 1961, filing an income tax return is legally required if you earn any income. As a responsible taxpayer, you use an ITR form to declare your income, expenses, tax deductions, investments, taxes, and other financial details.
Therefore, with the FY 2024-25 deadline approaching, and if you are wondering how to file ITR returns. This comprehensive guide will walk you through the step-by-step process of e-filing your ITR for the Financial Year (FY) 2024-25 (Assessment Year 2025-26).
What Is E-Filing?
E-filing electronically submits an Income Tax Return (ITR) over the Internet. You can conveniently file your taxes online by accessing the new income tax portal with your Permanent Account Number (PAN)–based login credentials, which allows you to access various features that streamline the tax filing procedure.
What Documents Do You Need To E-File Your Income Tax Return?
To effectively e-file your ITR, it’s crucial to have the following information/documents readily available:
- Bank Statements
- Permanent Account Number (PAN)
- Aadhaar
- Donation receipts if you have made any donations
- Stock trading statements from the broker platform
- Form 16 to claim your TDS from selling crypto
- Aadhaar registered mobile number for e-verifying the return
- Insurance policy paid receipts related to life and health
- Bank account information linked to PAN
- Interest certificates from banks
Once you have all the above information handy, let’s get into the details of e-filing an ITR on the income tax portal.
Here’s how you can e-file your IT return on the income tax website:
Step 1: Login To Your Account
- To initiate the process, head to the official Income Tax e-filing website and select the ‘Login’ option.
- Enter your PAN in the User ID section, then proceed by clicking on ‘Continue.’
- Ensure to check the security message in the tickbox.
- Following this, enter your password and click ‘Continue’ to proceed.
Step 2: Select “File Income Tax Return” Option
After logging in, navigate to the ‘e-File’ tab on the website and select ‘Income Tax Returns.’ From there, choose the option ‘File Income Tax Return’. This will direct you to the section where you can file your income tax return electronically.
Step 3: Choose The Correct “Assessment Year”
If you’re filing for the financial year 2024-25, choose ‘AY 2025-26’. Similarly, if you’re filing for FY 2023-24, select ‘AY 2024-25’. Opt for the ‘Online’ mode of filing and accurately designate whether it’s an original or a revised return. This step is crucial for the accurate submission of your income tax return. Once done, hit “Continue.”
Step 4: Choose Your Status
Choose your relevant filing status: Individual, Hindu Undivided Family (HUF), or Others. If you are an individual, select “Individual” and click “Continue.”
Step 5: Select The Type Of ITR You Want To File
Next, choose the appropriate ITR type. Taxpayers must determine the correct ITR form before proceeding with their returns. Seven ITR forms are available, among which ITR 1 to 4 are applicable for Individuals and HUFs. ITR 2 and ITR 3 are two forms that should be filled by individuals investing in cryptocurrency based on their income type.
For instance, individuals and HUFs who don’t have income from business or profession but have capital gains must file ITR 2. For detailed information on which ITR should you file, read our guide.
Step 6: Select The Reason For ITR Filing
In the next step, you must specify the reason for filing your returns. Choose the relevant option based on your situation:
- Taxable income exceeds the basic exemption limit.
- Mandatory filing is demanded as specific criteria are met.
- Other reasons
Step 7: Verify The Pre-Filled Information
Most of your details will be automatically filled in, including your Name, Date of Birth, Aadhaar, PAN, contact number, and bank details.
However, it is crucial to carefully validate these details before proceeding further. Additionally, please provide your bank account information if it still needs to be provided, ensuring it is pre-validated.
As you progress through each step, you must comprehensively disclose all your relevant income, exemptions, and deduction details. Remember, most of your information will be pre-filled based on data from your employer, bank, etc.
Review this information meticulously to ensure its accuracy.
Finally, confirm the summary of your returns, validate the details, and make payment of any outstanding taxes, if applicable.
Step 8: Electronically Verify Your Income Tax Return
The final step is to verify the return within the specified time frame of 30 days. This verification needs to be revised to ensure your filing is completed. You can electronically verify your return through various methods, including Aadhaar OTP, electronic verification code (EVC), Net Banking, or by dispatching a physical copy of ITR-V to the Central Processing Center (CPC) in Bengaluru.
Conclusion
If you are a crypto investor, then filing your ITR online doesn’t have to be an ordeal. With the knowledge gleaned from this blog, you can now easily e-file the ITR process.
Filing your ITR accurately and on time is crucial to avoid penalties. However, what remains complex is the manual calculation of crypto taxes, which is why you can use KoinX. It auto-classifies every crypto transaction based on its nature to accurately determine your crypto taxes. So, to ease up your burden of calculating crypto taxes, join KoinX today!
Frequently Asked Questions
What Is Income Tax?
Income tax is a type of direct tax imposed on income. A certain percentage of income is paid to the government, which is then used for various expenditures such as healthcare, education, infrastructure development, and providing subsidies to agriculture. The payment of income tax is mandatory for individuals, Hindu Undivided Families (HUFs), and other taxpayers, depending on their income levels or gains in a financial year.
How To Save Income Tax?
To minimise income tax legally, you can employ different strategies through proper tax planning. The Income Tax Act offers specific deductions and exemptions you can claim. These measures will lower your overall taxable income and decrease the tax you need to pay. For more details, you can read our guide here.
Is There Any Tax On Cryptocurrency in India?
According to Section 115BBH, gains derived from trading cryptocurrencies are subject to a tax rate of 30% plus an additional 4% cess. Additionally, as per Section 194S, a 1% Tax Deducted at Source (TDS) is applicable on transferring crypto assets starting from July 01, 2022.
This TDS is imposed if the transactions surpass INR 50,000 within the same financial year, with some cases even applying for transactions exceeding INR 10,000. For more details, read our guide on crypto tax in India.
Who Should File Income Tax Return?
Individuals following the below-given criteria are liable to file income tax returns in India:
- If your income exceeds the exemption limit
- If the total deposit in the “Current” account is more than INR 1 Crore
- If the total deposit in the “Savings” account is more than INR 50 Lakhs
- If you have spent more than INR 2 Lakhs on foreign travel
- If your TCS or TDS exceeded INR 25,000
- If your electricity bills exceed INR 1 Lakh
- If your professional income is more than INR 10 Lakh
- If your business turnover is more than INR 60 Lakh.
- If you have minted, staked or farmed cryptocurrency.
- If you have enjoyed gain from disposing of cryptocurrency.
How Much Income Tax Is Free?
According to both tax regimes (Old and New), the current income limit in India that does not attract taxes is INR 2.5 Lakhs.
What Will Happen If I Don’t File ITR?
A significant consequence of filing your Income Tax Return (ITR) late is that you will have to pay a penalty.
According to Section 234F, if you fail to file your ITR on or before the due date, a late fee of Rs. 5,000 will be applicable. However, if your annual income is less than Rs. 5 lakh, the late fees would be limited to Rs. 1,000. For more details on tax evasion penalties in India, read our guide here.
When Is The Last Date For Filing ITR in India?
In India, the financial year runs from April 1 to March 31 of the subsequent year. You must report all income earned during this period, including income from cryptocurrency, by July 31.
However, the deadline is extended to October 31 if your accounts are under audit. For the latest financial year, FY 2024-25, taxes must be paid by July 31, 2025, or October 31 for those undergoing an audit. Additionally, there’s an option for filing a late return, which extends the deadline to December 31, 2025.
