E-filing ITR: Govt's income tax website or private websites?
June, 29th 2017
Salaried individuals would have started getting the Form 16 from their employers, the last date for which was June 15, 2017.
The next in line is the filing of income tax return (ITR), which is mandatory if one has annual income exceeding the minimum exempted limit. Also, even if no taxes are due as with salaried individuals where TDS gets deducted each month, the filing of ITR is still compulsory.
Offline and E-filing: Mandatory for whom Filing of ITR can be done either offline or online i.e. through e-filing, a process of electronically filing Income tax returns through the internet. But for some taxpayers choosing between the two is not a choice anymore.
Online filing has been made compulsory for certain section of the taxpayers. It is compulsory in certain cases such as where:
(a) Total income exceeds Rs 5 lakh or any refund is claimed (other than Super Senior Citizen furnishing ITR1 or ITR2),
(b) Where accounts are required to be audited under section 44AB and
(c) The return is furnished in ITR-3 or in ITR-4.
Only these persons can file their ITR offline:
(a) Individual who are of the age 80 years or more at any time during the financial year
(b) Individual whose income is less than Rs 5 lakh per year and who do not have to claim a refund in the return.
In addition to the e-filing option available at the Income Tax department's website, there are certain e-return intermediaries (ERI), which are private entities, registered by the Income Tax department to enable e-filing process through their websites. The complete list of registered ERI's can be seen here .
E-filing on private websites vs Income Tax department's platform On the Income Tax department's platform, https://incometaxindiaefiling.gov.in , no matter which IT Form one uses to upload the return, it's entirely free. The private websites typically offer only the basic e-filing services at no cost but the more complex operations come at a cost.
In the case of the IT department's website, the selection of the IT Form based on the income sources has to be done by the taxpayer. Most private intermediaries, on the other hand, provide e-filing services merely by uploading of Form-16. Archit Gupta, Founder & CEO ClearTax says, "Clear Tax has created a Form 16 parser (a software program) where the user has to just upload Form 16 and all the data from the PDF is auto populated at appropriate places on the software. After this, the user has to just double check the data, enter any other income received, pay taxes and file return." This helps, especially in the case of individuals with only salary income and additionally having a home loan where interest is being serviced.
Most private intermediaries provide assistance and also have enabled technological support to help upload IT returns of those who are unable to upload on their own. "Our portal doesn't ask for ITR form type (ITR-1, ITR-4, etc.), it is decided by the system as per data entered by the user, says Saakar S Yadav, Managing Director, myITreturn.com. Also, on the IT department's website, one needs to be aware of the information related to taxation. "We have an interview based e-filing, you answer simple questions and we file your return. Compared to IT Department and other websites where you need to know what information to fill and in which fields" says Yadav.
On the IT department's platform, the ITR forms are available in two alternative software formats - Excel and Java. Also, some excel functions have to be enabled before filing up the ITR form in excel format because validation and other buttons of the excel file will work only if 'Macros' and 'ActiveX' function of the Excel workbook is enabled. The ERI websites, on the other hand, takes care of these concerns. Their platforms are easier to use and hence comes at a price. "An easy-to-understand cloud-based user interface, which eliminates the need to download any software," says Gupta.
Stepwise process for e-filing ITR (Form 16 Upload)
Step 1: Register on any ERI website Step 2: Enter your personal details Step 3: Upload Form 16 ( PDF format) Step 4: Add details of taxes paid, if any* Step 5: Review Step 6: E-file your return Step 7: Receive ITR-V (acknowledgement) from Income-tax Department on your e-mail. Step 8: E-Verify **
* Tax if due can be paid online through net banking ** On the income tax website or through net banking
Watch outs One has to tread with caution while using the websites of the private intermediaries. Many of them, backed by investor community could be in purely for a profit. They could use the personal information to contact you later for selling financial products such as mutual funds or insurance. Kaushik says, "There are investors with cash in hand and trying to acquire a maximum number of taxpayers and planning to charge them later or by providing different service like a mutual fund, insurance etc as they have the objective of making their investment double or triple in 3-5 years."
What to look for Consider the different income heads under which you had earned income in the previous FY. Get in touch with 2-3 websites either through their chat feature or speaking to them on the phone. Get to know the filing process specific to your case.
WHAT ARE THE OFFERINGS Self-filing is free of cost on all the ERI websites. Some of the other things that one may look forward to in the private websites are:
myITreturn.com In addition to the Form 16 upload feature, they have a questionnaire model to understand the exact scenario of an assessee. On the basis the answers provided in Yes or No they would automatically arrange or show only concerned Forms and Fields that the assessee has to fill.
They provide a link for e-filing, where employees have encrypted e-filing link in their Form-16 or E-mail or sent to their employer's portal.
One may also use the services like any notice assistance if received by the IT department, Form 12BB and rent receipt generation.
The cost of various packages can be seen by clicking here .
On the safety aspect, this is what they say: "We meet global security standards."
ClearTax.com Basic Plan - Ideal for new joinees or freshers, employees with only salaried or interest income, salaried employees with a single property, and salaried employees with a single Form-16 from their company.
Savings Plan - Ideal for salaried employees with multiple Form 16s, salaried employees with ownership of multiple properties
Comprehensive plan - Ideal for salaried employees with ESOP in domestic companies, salaried employees employees with ESOP in domestic companies, salaried employees with capital gains from property or stock, PSU employees with salary arrears under OROP or 6th Pay Commission.
The cost of various packages ranges from Rs 499 to Rs 1,799 for residents and can be seen here .
On the safety aspect, this is what they say: "We have 128-Bit, bank-grade SSL encryption on our software and ISO 27001 certified data centres."
axspanner In the E-file by email provided by them, one has to just email the Form 16 and their system prepares ITR, sends draft return for review and payment of nominal fees.
They too provide a hyperlink in Form 16 wherein one has to just click and the data converts into ITR through secured encryption. So there is no need to download, save or upload Form 16 at ITD or any other website.
On the safety aspect, this is what they say: "Our website is https and the security is like the bank grade security and being controlled as well as trusted by income tax department as one of the first ERI (without any complaint or notice from them. We keep the data on servers managed by a leader like Amazon."
H&R Block H&R Block.com offers three types of tax filing services - 'Self-filing' which is a do-it-yourself process and 'In person' tax e-filing, where clients can walk into their offices and get a tailored personalised tax filing experience and lastly the 'online tax filing' by experts where an expert prepares and e-files the taxes basis information one provides online.
The self-filing services for tax filing are completely free. They have 3 packages -Basic (Rs 499), Medium (Rs 799) and Complex (Rs 1499). The In person tax filing starts at Rs 1,999.
On the safety aspect, this is what they say: "We get security test done through recognised third-party testing companies. We follow global based practices on data security."
Conclusion E-filing of tax return should not be a tough nut to crack on the IT department's website. However, for those who are finding it time-consuming or otherwise, may choose any of the ERI websites to file the ITR well within the due date. While choosing the ERI, do not base your decision solely on pricing, which as it is low. Speak or chat with the help available on these sites citing your specific situation and decide accordingly.