Summer Training Report

On
E-Filing of Returns
An Overview of the Process
Of e-Filing of Returns
Submitted To

PUNJAB TECHNICAL UNIVERSITY JALANDHAR

In the partial fulfillment of Requirements for the award of Degree of
Masters in Business Administration
Submitted By
MOHIT (1522518)
Under the Guidance Of
Prof. Pavneet Arora
Department of Management

INNOCENT HEARTS GROUP OF INSTITUTIONS, JALANDHAR

2016-17

INDEX
Sr.
No.

Particulars

Pg.
No.

1.

INTRODUCTION
OBJECTIVE,IMPORTANCE

2.

BASIC INFORMATION ABOUT TAX

10

3.

TAXABLE HEAD OF INCOME TAX

16

4.

TAX BENIFITES - DEDUCTIONS, REBATES

& DONATIONS

23

5.

INCOME TAX E-FILING

33

6.

TYPES OF E-FILING

35

7.

PROCESS OF E-FILING

38

8.

FREQUENTLY ASKED QUESTION

47

9.

SUMMARY & CONCLUSION

59

10.

BIBLOGRPHY

60

INTRODUCTION
E-FILING
The department desired a system that would make the process
of filing of income tax returns (ITRs) easier for taxpayers as well as reduce
the time required for data entry at their end on (1 January 2012) receipt of
the ITRs. Enabling the filing of ITRs over the Internet was the most viable
answer to the departments needs. While the facility would be beneficial to
the taxpayers, the department had to create an environment wherein the user
would feel secure about filing his ITRs online. e - Filing helped furnishing
ITRs through authorized intermediaries who were called e-Return
Intermediaries. Response time for processing the ITRs as well as claiming
refund dropped significantly.
Duplication of efforts was eliminated since data entered by intermediaries
was already available in the system for any time use and reference. The
online process did not require the taxpayers to be physically present for
filing their ITRs.Data transfer is based on transmitting entire files to the Tax
Administration. Taxpayer companies typically have accounting software
programs that are able to computer-generate such files.

Definition of e-filing
e - Filing is a system for submitting tax documents to the
Income tax department through the internet or direct connection, usually
without the need to submit any paper documents. Various tax return
preparation softwares with e-filing capabilities are available as standalone
programs or through websites or tax professionals or from major software
vendors for commercial use. e - File is the term for electronic filing, or
sending your ITR from tax software via the Internet to the tax authority. Efiling of Income Tax Return Online refers to the process of filing Income
Tax Return electronically. You no longer have to stand in long queues to file
income tax returns. Customized return forms have been devised by the
Income Tax Authority which are available on the site of the Department.
These forms have been devised with such details that tax payers need not
file any supporting document along with. Return is submitted electronically
at the site.

OBJECTIVE
To find the market potential and market penetration of financial product
offerings in Mumbai and local area nearby them.
To collect the real time information about preference level of customers and
give the best solution.
To expand the market penetration on financial service .
To provide pricing strategy of competitors to fight cut throat competition.
To increase the product awareness of Value Plus Consultancy as single
window shop for investment solutions.

IMPORTANCE
Filing of return provides legality to what we are earning whether we are
paying tax on it or not. Prompt payment of taxes and filing of returns is less
likely to attract attention of the IT Department. Accordingly, filing of returns
is significant in many ways as follows:a. A mandatory concept has been introduced for every person to file his
return even if it is below the exemption limit, no matter what.
b. Any transaction can be legally entered into because the government is
having records of the income and it is collecting tax on it.

c. Payment of taxes helps every citizen to participate in the contribution

towards national income and consequently in the appraisal of the national
economy.
d. Willful evasion of tax or intentional avoidance would lead to prosecution
by IT Department.
e. If a person accrues losses in his business, he cannot carry it forward to set
off against his income in the next year if he does not file his return for the
relevant previous year.

MORE ABOUT THE E-FILING PROCESS WORK

The e-filing process is really easy and takes a very little time and all you
have to do is fill up your tax return form online provided and the other
required information about income, expenditure and savings. Filing tax
returns online is the easiest and the simplest method and all one needs is to
log on and follow the simple instructions.
For e- filing process one needs to have a software application that generates
the income tax form, which is available at the Income Tax Department
website.
Benefits of e-Filing:
One of the foremost benefits of electronic filing is the facility of anywhere /
anytime filing, and one can just file returns anytime of the day or night.
Other than this, online tax returns are processed much faster than paper
returns and the tax is worked out automatically as the payee completes the
form. With this the payee also gets the acknowledgement slip immediately.
Also online filing is a safe and secure m

REVIEW OF LITERATURE
e - File is a system for submitting tax documents to the Internal Revenue
Service through the internet or direct connection, usually without the need to
submit any paper documents. Various tax preparation softwares with e-filing
capabilities are available as standalone programs or through websites or tax
professionals from major software vendors for commercial use[1].
According to Directorate of Income Tax - The process of electronically
filing Income tax returns through the internet is known as e-Filing [2]. The
embryonic world of electronic filing has certainly evolved during the past
few years. Studies have concluded that electronic filing offers the potential
to greatly enhance tax services. Tax software often provides automatic error
checking, expert tax advice, and other services that can catch errors, cutting
down on the chances of an audit[3]. Taxpayers without computers and/or
Internet access at home may choose to use computers elsewhere in order to e
- file, though the data indicates this is a relatively infrequent occurrence. In
U.S Self - preparers may visit IRS Taxpayer Assistance Centers (TAC) or
VITA locations or may utilize computers that are available to them at work
or a public library. IRS Publication 17, Your Federal Income Tax, states,
Many VITA sites offer free electronic filing[4]. The IRS list of e-file
benefits includes
IRS computers quickly and automatically check for errors or other missing
information[5]. A 2005 survey by Anderson of 277 preparers showed that
respondents with larger practices were more likely to e-file than those with
smaller practices[6]. At present, there is very limited literature that focuses
on the adoption of e-filing systems. Most of the literature related to e-filing
adoption applies and extends the well known technology acceptance model
(TAM) by Davis (1989) (Wang, 2002; Chang et al., 2005; Gallant et al.,
2007), theory of planned behavior (TPB) Fishbein and Ajzen (1975) (Hsu
and Chiu, 2004; Hung et al., 2006) and a unified model of both theories (Fu
et al., 2006) to assess the adoption intention of the e-filing system. Other
literature such as Carter et al. (2008) used the Unified Theory of Acceptance
and Use of Technology (UTAT), while Wang et al. (2007) used the
Innovation Diffusion Theory to observe e-filing adoption among taxpayers.

RESEARCH PROBLEM
E-filing Problems
E-filing issues are of 2 types:
1. Problems while attempting to e-file your return, during the pre-check or
transmission phase;
2. E-filing rejections from the IRS or state tax agency, after they've received
your e-filed return.
Select your type of issue to learn more.
Problems WHILE attempting to e-file
As you work on your return, we alert you to obvious errors, such as missing
Social Security numbers and incompletely filled-out forms.
When you go down the path to e-file your return, TurboTax runs a second,
more rigorous error check. It looks for subtle things that might cause the IRS
or state e-filing systems to reject your return.
Before you can successfully transmit your return, you will need to correct
your return and/or update your program by following the on-screen
instructions.
If your tax return cannot be e-filed for some reason, TurboTax will let you
know. More info
.
Problems AFTER e-filing
Rejections occur after your tax return has been received by the IRS or state
tax agency..

Growth of E-filing:

Figure:1 State-wise report of E-Returns Till July 31st 2013 [2013-14]

The above figure clearly shows that Maharashtra is the leading state
among all in E-filing of returns while some of the states have very less
number of e-returns such as Mizoram, Manipur, Nagaland etc. but this
may be because of literacy level and internet awareness among
citizens of the states. But this growth itself appreciable because before
E-filing comes into existence this figure is very less and without ereturn facility it is not possible to acquire this number of returns in
this short time span.

Figure2: Year-wise summary of E-Filing in India

Growth is continuous but not rapid as expected
The above scenario clearly reflects the steady and continuous growth
of e-filing in India. There is lump sum 9.60% increase in e-filing from
FY 2007-08 to 2013-14 which is appreciable in itself and this growth
possible only because of adoption of information technology by
Income Tax department. This increase may be due to the benefits
enjoyed by the people over manual Filing of ITRs. Filing of return
electronically is easy and user friendly as user has to follow step by
step instructions. Also, with the latest technology for internet security
in use; it is very safe to e - file. There is advantage of
acknowledgement from Centralized Processing Centre (CPC),
Bangalore about the receipt of ITR.
According to CBDT report they get Overwhelming Response for efiling i.e. ; more than 82 Lakh Returns E-Filed till 29th July, 2013
which is More than 40% of the Returns e-filed during the Same Period
Last Year from Every Corner of the Country.
Reasons For limited growth:
Lack of awareness towards use of internet.
Insecurity towards e-payments security among assesses.
Lack of adequate financing to set up the appropriate infrastructure in tax
offices.
Lack of a reliable and accessible internet service.

LEARNING FROM E FILLING

Common mistakes while filing your ITR Choosing the wrong ITR
form :
There are seven forms, out of which only four are applicable to
individual taxpayers. Based on your inputs we identify the right ITR
for you.
Not matching ITR data with income tax department's database :
If you have changed jobs during the year, report the previous
employer's income in your ITR. Otherwise, you are liable to get a
notice.
Not submitting ITR-V :
You have to send the signed copy of ITR-V by post within 120
days of e-filing. Otherwise, the return will deemed to be not filed.
Not reporting bank's interest income :
Banks only deduct 10% TDS on interest income. If you are in
20% or 30% tax slab, you have to report the interest income.
Common mistakes while filing your ITR Providing incorrect email
ID :
Ensure you mention a valid and functional email ID in your ITR.
Not reporting exempt income :
Dividends and long- term capital gains on listed securities are exempt
from tax.

However, report this income as companies/ brokerage firms report this

data to the Tax Department. Incorrect assessment year while paying
self assessment tax online :
Assessment year is always one year ahead of the financial year.
For FY2012-13 tax returns, the assessment year is AY2013-14.