Seat No.

: 1574

A
Project Report
On
“STUDY OF E-FILING OF INCOME TAX RETURN, IT’S BENEFIT & LIMITATION”

AT
CA NILESH M PATIL & ASSOCIATES
SUBMITTED TO

SAVITRIBAI PHULE PUNE UNIVERSITY

In Partial Fulfilment of the Requirement for The Award of The Degree Of

Master of Business Administration (M.B.A.)

SUBMITTED BY
GAURAV GAJANAN DOSE
Perm Registration No (PRN) 2052001465
Under The Guidance Of
PROF. VIVEK DIGHE SIR

MARATHWADA MITRA MANDAL

INSTITUTE OF MANAGEMENT EDUCATION
RESEARCH AND TRAINING PUNE- 411052

2021-2022
 DECLARATION

I, the undersigned, hereby declare that the project titled, “STUDY OF E-FILING OF INCOME
TAX RETURN, IT’S BENEFIT & LIMITATION” written and submitted by Mr. Gaurav
Gajanan Dose to University of Pune, in partial fulfilment of the requirement for the award of
degree of Master of Business Administration (MBA) under the guidance of Prof Vivek Dighe is
my original work and the conclusions drawn therein are based on the data collected by myself.

Place: Pune Gaurav Dose

Date: / /
 AKNOWLEDGEMENT

With regard to my Project, I would like to thank each and every one who offered help, Guideline
and support whenever required. The faculty members of IMERT who provided me with valuable
insights into the completion of this project. Especially, DR. SHUBHANGEE RAMASWAMY
director of our respected institute and also, I am thankful to my mentor PROF VIVEK DIGHE,
who extended his guidance and support for bringing out this report in the best possible way. I
would also like to thank CA NILESH M PATIL & ASSOCIATES for his guidance during
summer internship. And also, for providing me with all the information required and co-
operating in every possible way that they could.

Place: Pune Gaurav Dose

Date: / /
 Executive Summary

The aim of my summer internship project was to learn how the individual income
tax is calculated and income tax return is filed in India. Basically, individuals are
subject to income tax. Income tax is a direct tax levied on the income earned by
individuals, corporations or on other forms of business entities. The Indian
constitution has empowered only the Central Government to levy and collect
income tax.

The Income Tax department set up by the Government is governed by the Central
Board for Direct Taxes (CBDT). The CBDT is a part of the Department of
Revenue in the Ministry of Finance. It has been charged with all the matters
relating to various direct taxes in India and is also responsible for administration
of direct tax through the Income Tax Department.

For all the matters relating to Income tax, the Income Tax Act, 1961
is the umbrella Act which empowers the Central Board of Direct Taxes to
formulate rules (The Income Tax Rules 1962) for implementing the provisions
of the Act. The Income Tax Act provides that in respect of the total income of
the previous year of every person, income tax shall be charged for the
corresponding assessment year at the rates laid down by the Finance Act for
that assessment year. In other words, the income earned in a year is taxable in
the next year and the income –tax rates prescribed for an assessment Year are
Applicable in respect of income earned during the previous Year.
The financial year in which the income is earned is known as the previous year.
The financial year following a previous year is known as the assessment year.
The assessment year is the year in which the salary earned in the previous year
is taxable. Any financial year begins from 1st of April of every year and ends
on 31st of March of the subsequent year.

1
 INDEX

CHAPTER PAGE
TITLES
NO. NO.

CHAPTER-1 INTRODUCTION 3-4

CHAPTER-2 COMPANY PROFILE 5-7

CHAPTER-3 REVIEW OF LITERATURE 8-26

CHAPTER 4 RESEARCH METHODOLOGY 27-28

DATA ANALYSIS AND

CHAPTER 5 INTERPRETATION 29-38

CHAPTER 6 FINDINGS, SUGGESTIONS

39-41
AND CONCLUSIONS

KEY LEARNING,
CHAPTER – 7 CONTRIBUTION 42-46

2
CHAPTER -1
Introduction

3
 Introduction to study

The project on “ANALYSIS OF E-FILING OF INCOME TAX RETURN AND ITS

BENEFITS AND LIMITATION” was carried out in the office of CA NILESH M PATIL
AND ASSOCIATES, K.K. MARKET, DHANKAWADI PUNE. The intention behind
taking over this project with CA NILESH M PATIL AND ASSOCIATES was to primarily
understand the concept of income tax in India along with its forms and filing income tax
returns.
The ideal subject related to my project was to understand and to learn the provision of taxes
and filing of return in a well-known manner. To learn how tax is levied, calculated and filed
with income tax authorities with the help of our nation builders which includes Chartered
Accountants, Cost Accountants, Tax Consultants and many more.
The Income Tax Department set up by the Government is governed by the Central Board for
Direct Taxes (CBDT). The CBDT is a part of the Department of Revenue in the Ministry of
Finance. It has been charged with all the matters relating to various direct taxes in India. It
provides essential inputs for policy and planning of direct taxes in India and is also responsible
for administration of direct tax laws through the Income Tax Department.

4
 CHAPTER - 2
Company Profile

5
 Company Profile

Name of Company C.A. NILESH M PATIL & ASSOCIATES

Owner C.A. NILESH M PATIL

Membership No. 165129

Company Category Chartered Accountant Office

Address Office No. 1,4th floor, D&G Wing, K.K.Market, Pune-Satara

Road, Dhankwadi, Pune 411043

020-41278899
Contact info 8605011014
canileshpatil@gmail.com

Number of employees 3

6
 Composition of Board

NILESH M PATIL

 Vision & Mission

o Vision Statement:
We will become the Tax advisor of choice through the creation of an environment where
we want to give our best.
o Mission Statement:
Prime objective,the provision of an integrated range of client focused services that will
exceed our client's expectations and assist them to improve and reduce and maintain
Tax Liability.
We are committed to creating a client focused culture and supporting our staff to achieve
the prime objective. Our professional and local communities are an integral part of our
ability to deliver on this mission.

 Value
o We actively listen to our clients and each other to identify needs, opportunities
and concerns. We follow up to help meet those needs, realize such opportunities
and resolve any concerns.

 Excellence
o We demonstrate our Shared Beliefs of integrity, diversity, accomplishment,
mutual respect and support through our words and actions.

7
 CHAPTER - 3
Review of Literature

8
IMPORTANCE OF INCOME TAX ACT 1961

IMPORTANCE
The Taxation structure of the company of the country can play a very important
role in the working of our economy. Some time back the emphasis was on higher
rates of tax and more incentive. But recently, the emphasis has shifted to decrease
in rates of taxes and withdrawal of incentives. While designing the taxation
structure it has to be seen that it is in conformity with our economic and social
objectives. It should not impair the incentives to personal Savings and investment
flow and on the other hand it should not result in a decrease in revenue for the
state.

HISTORY
The income tax was introduced in India for the first time in 1860 by British rulers
following the mutiny of 1857. The period between 1860 and 1886 was a period of
experiments in the context of Income tax. This year India 1886 when the first
Income Tax Act came into existence. The pattern laid down in it for levying of tax
continues to operate even to-day though in some change form. In 1918, another
Act- Income Tax Act, 1918 was passed but it was short lived and was replaced by
Income Tax Act ,1922 and it remained in existence and operation till 31st March,
1961.

PRESENT ACT
On the recommendations of the Law commission and Direct Taxes Enquiry
Committee and in consultation with the Law Ministry a Bill was framed. This
Bill was referred to a select committee and family passed in September 1961.
This Act came into force from 1st April 1962 in the whole of the country.
Income Tax Act 1961 is a comprehensive Act and consists of 298
sections. Subsections running into thousand Schedules, Rules, Sub-rules,
etc. and are supported by other acts and rules. This act has been amended
by several amending Act 1961. The annual finance bills presented to
Parliament along with the Budget make far-reaching amendments of this
Act every year.
The Central Government has been empowered by entry 82 of the Union List
of Schedule VII of the Constitution of India to levy tax on all income other
than agricultural income (subject to Section 10 (1)). The Income Tax law
comprises the

9
Income Tax Act 1961, Income Tax rules 1962, Notifications and Circulars
issued by Central Board of Direct Taxes (CBDT), Annual Finance Acts and
Judicial pronouncements by Supreme Court and High Courts.
The government of India Imposes an income tax on taxable income of all persons
including individuals, Hindu undivided families, companies, firms, association of
persons and body of individuals, local authority and any other artificial judicial
person. Levy of tax is separate on each of the persons. The levy is governed by the
Indian Income Tax Act, 1961. The Indian Income Tax Department is governed by
CBDT and is part of the Department of Revenue under the Ministry of Finance,
Government of India Income tax is a key source of funds that the government
uses to fund its activities and serve the public.

BASIC INFORMATION ABOUT TAX:

Taxes in India are two types: direct tax and indirect tax.
Direct tax, like Income Tax, wealth tax etc. are those whose burden falls
directly on the taxpayer.

The burden of indirect taxes, like service tax VAT, etc. can be passed on to a third party.
Income tax is all income other than agricultural income divided and collected by
the central government and shared with States.
According to Income Tax Act 1961, every person, who is assessed and whose
total income exceeds the maximum exemption limit, shall be chargeable to
Income Tax at the rate or Rates prescribed in finance act. Such income tax shall
be paid on the total income of the previous year in the relevant assessment year.

The total income of an individual is determined on the basis of his residential

status in India.

10
INCOME TAX RETURN
“Income Tax Return” is a term which is often used when we talk about
Income Tax. It is a way by which we pay this tax. When the total annual
income of the person, including all sources is more than maximum
unchangeable limitation.

Residences Rules
An individual is treated as resident in Year present in India.

I. For 182 days during the year or

II. For 60 days during the year and 365 days during the preceding year.
Individuals who fulfill neither of these conditions are non-residents.
A resident who was not present in India for 730 preceding 7 years or who was
non-resident in nine preceding years is treated as not ordinarily resident. In
effect, newcomers to India remain not ordinarily resident.
For tax purposes individuals may be resident nonresident are not ordinarily
resident.

Non-Resident and Nonresidents Indians:

Residents are on a worldwide income; non-residents are accepted only on
income that is received in India or arises or is Deemed to arise in India. A
person not ordinarily resident is taxed like non-resident but it is also liable to
tax on income accruing abroad if it is from business controlled or in a
profession setup in India.
Capital gains on the transfer of assets acquired in foreign exchange are not
taxable in certain cases.
Non-resident Indians can file a tax return if their income consists of only interest
and dividends, provided taxes due on such income are deducted at source.
It is possible for non residents Indians to avail of this special provisions even
after becoming residents by following certain procedures let down by the
Income Tax Act

11
 Taxability of individuals is summarized below:

Status Indian Income Foreign Income

Resident and ordinarily Taxable Taxable
resident

Resident but not ordinary Taxable Non-Taxable

Resident
Non-Resident Taxable Non-Taxable

Know-how of income tax

Income Tax levied on ‘total income’ of the assesses. 5
Income of the ‘previous year’ is taxed in the ‘assessment year’.

Income is classified into and computed under five categories called ‘heads of income’.
The basic scheme of income tax is Principal ‘pay-as-you-go earn’.
One must pay his taxes in advance and by the due dates in the prescribed
percentage.
Deferment in the payment of advance tax would result in the payment of interest
The income tax basis came is explained in brief as:

Income tax is levied on the ‘total income’ of the assessable entity which is
computed under the provisions of the act.
The income which is threatening pertaining to the ‘previous year’ is taxed but in
the ‘assessment year’. Income tax is charged

PAY AS YOU EARN

A person is not allowed to wait until 31st March to pay his or her
taxes. The Income Tax Act has the provision of ‘pay as you earn’. This
does not pinch a taxpayer at the end of year making a lump sum
payment.

12
 INCOME TAX SLABS AND RATED FOR ASSESSMENT YEAR 2021-2022;

Income Tax Slab (in Rupees) Tax Rate for Individual Below the Age Of 60
Years
0 to 2,50,000* Nil
2,50,001 to 5,00,000 5% of total income exceeding 2,50,000
5,00,001 to 10,00,000 Tax Amount of 12,500 for the income up to
5,00,000 + 20% of total income exceeding
5,00,000
Above 10,00,000 Tax Amount of 1,12,500 for the income up to
10,00,000 + 30% of total income exceeding
10,00,000

Resident senior citizen, i.e., every individual, being a resident in India, who
is of the age of 60 years or more but less than 80 years at any time during the
previous year:
Tax Rates for Senior Tax Payers between the ages of 60 years to 80 years old

Income Tax Slab Senior Citizens (between 60 years – 80 years)

Up to 3,00,000 Nil
3,00,001 to 5,00,000 5% of income exceeding 3,00,000
5,00,001 to 10,00,000 Tax Amount of 10,000 for the income up to
5,00,000 + 20% of total income exceeding
5,00,000
Above 10,00,000 Tax Amount of 1,10,000for the income up to
10,00,000 + 30% of total income exceeding
10,00,000

13
 Resident super senior citizen, i.e., every individual, being a resident in India, who is of the age
of 80 years or more at any time during the previous year:

Taxable Income Tax Rate

Rs.5,00,000 - Rs.10,00,000 Nil
up to Rs500000 20%
Above Rs.10,00,000 30%

Plus: Surcharge: 10% of tax where total income exceeds Rs.50 lakh 15%
of tax where total income exceeds Rs.1crore Education and health
cess:4%

Note:
A resident individual is entitled for rebate u/s 87A if his total income does not
exceed Rs. 500,000.
The amount of rebate shall be 100% of income-tax or Rs. 12,500, whichever is
less.

Income Tax Rates for HUF/AOP/BOI/Any other Artificial Juridical Person:

Taxable income Tax Rate

Up to Rs.2,50,000 Nil
Rs.2,50,000 to Rs.5,00,000 5%
Rs.5,00,000 to Rs.10,00,000 20%
Above Rs.10,00,000 30%

14
Plus: Surcharge: 10% of tax where total income exceeds Rs.50 lakh
15% of tax where total income exceeds Rs.1crore
Education and health cess:4%

Tax Rate for Partnership Firm:

A partnership firm (including LLP) is taxable at 30%.
Plus: Surcharge: 12% of tax where total income exceeds Rs.1crore
Education and health cess:4%

Income Tax Slab Rate for Local Authority:

A local authority is taxable at 30%
Plus: Surcharge: 12% of tax where total income exceeds Rs. 1 crore
Education and health cess: 4%

Tax Slab Rate for Domestic Company:

A domestic company is taxable at 30%.
However, tax rate is 25% if turnover or gross receipt of the company does not
exceed Rs. 400 crores in FY 2018-19.
Plus: Surcharge: 7% of tax where total income exceeds Rs. 1 crore
12% of tax where total income exceeds Rs. 10 crore
Education and health cess: 4%

15
 Tax Rates for Foreign
Company: A foreign
company is taxable at
40%

Plus: Surcharge: 2% of tax where total income exceeds Rs. 1 crore

5% of tax where total income exceeds Rs. 10 crores
Education and health cess: 4%

Income Tax Slab for Co-operative Society:

Taxable income Tax Rate

Up to Rs. 10,000 10%
Rs. 10,000 to 20,000 Rs. 20%
Above Rs. 20,000 30%
Plus: Surcharge: 12% of tax where total income exceeds Rs. 1 crore Education and health
cess: 4%
NOTE: Agricultural income is exempt from income tax.

16
INDIVIDUAL HEADS OF INCOME

1) Income from salary

2) Income from house property

3) Income from business profession

4) Income from capital gain

5)income from other source

17
Income from Salary
All income received as salary under Employer-Employee relationship is
taxed under this head. Employers must withhold tax compulsorily, if
income exceeds minimum exemption limit, as Tax deducted at source
(TDS) and provide their employees with a form 16 showing the tax
deduction and net paid income. In addition, the Form 16 contains one or
more of the following deductions from salary such as:
Conveyance allowance is tax exempt.
Medical reimbursement

Professional tax: Most States tax employment on a per-professional basis

usually a slapped amount based on a gross income. Such taxes paid are
deductible from income tax.

House rent allowance: The least of the following is available as exemption. Actual HRA
received

50% 40% (metro or non-Metro) of basic salary

Rent paid minus 10% ‘salary’. Basic Salary for this purpose is basic + DA
forming part + Commission on sale on fixed rate
The exemption of HRA a under section 10 (13A) is the least of all the above three
factors.
Perquisites and exemptions under section 10
The term ‘Perquisite’ includes the value of any benefit or amenity value of any
concession provided by the employer to the employees. Perquisite valuation
does not include certain medical benefits. Section 10 exemptions are available
for the following Perquisites:
Leave Travel Concession under section 10 5
Perquisites paid to Indian citizen employed abroad 10(7)
No tax paid on behalf of any employee by the employer 10 (10CC)
any sum received under Life Insurance Company.

18
Income from House property
Income from House property is computed by taking into account what is called
gross annual value of the property. The annual value in case of a self-occupied
house is to be taken as Nil. (However, if there is more than one self-occupied
house then the annual value of the other house is taxable.) From this, deduct
municipal tax paid and you get the net annual value. From this Net annual value
deduct:

30% of net value as per repair cost. (This is mandatory deduction)

No other deduction available
Interest paid or payable on housing loan against the house
In the case of self-occupied house interest paid or payable is subject to a
maximum limit of rupees 200000 if loan is taken on or after 1 April 1999 and
construction is completed within 5 years and maximum rupees 30000 (if the
loan is taken before 1 April 1999). For I know one non-Self occupied all
interest is deductible with no upper limits. The balance is added to taxable
income.

Income from business or profession

Income arising from profits and gains of any business or profession income
derived by trade or professional similar association by performing specific
services for its members any benefit from business whether convertible into
money or not incentives for exporters in any salary, interest, bonus, commission
or remuneration received by partner of a firm; any amount received under key
man insurance policy which also covers bonus; income from managing agency
and speculative transaction is taxable.

Income from capital gains

Under Section 2(14) of the IT Act 1961 Capital Asset is defined as property
of any kind held by and assesses such as real estate, equity shares, bonds,
Jewelry, painting art etc. but does not consist of items like stock in trade for
business or personal effects.

19
Capital gains arise by transfer of such capital assets.

Long term and short-term capital assets are considered for tax purposes. Long-
term assets are those assets held by a person for three years except in case of
shares or Mutual Funds which becomes long term just after 1 year of holding.
Sale of long-term assets give rise to long term capital which are taxable as
below:

As per section 10 38 of Income Tax Act 1961 long term capital gains
on shares or securities, Mutual Funds on which securities transaction tax (STT)
has been deducted and paid, no Tax is payable. Higher capital gains taxes will
apply only on those transactions where STT is not paid.
For other shares and securities, a person has an option to either index cost to
inflation and pay 20% of indexed gains or pay 10% of non-indexed gains.

For all other long term capital gains, indexation benefit is available and tax rate is
20%

Income from other sources

This is the residual head; under this head income which does not meet criteria
to go to other heads is taxed. There are also some specific incomes which are
to be taxed under this head.
Income by way of dividends
Income from horse
races Income from
winning Bull races

any amount received from key man insurance policy as donation

Income from shares (dividend other than Indian company)

20
TAX EXEMPTIONS
According to Income Tax Act 1961 there is a provision of exemptions in income
tax. Tax exemption induces reduction of the tax burden on a specific section of the
society to achieve some level of equilibrium among all. To encourage some
economic activities through the process of reduction of the tax burden on some
organizations or individuals involved in that activity is also another cause for tax
exemptions.

Tax exemptions have the authority to bring out social and economic
changes within the society followed by unprecedented consequences.
However, for such exemptions on tax some conditions are mandatory to
follow. Some of them are like -
*The age of the individual taxpayer
*The public service performed by the individual taxpayers
*The type of property owned by the individual
*The geography location of property
*The net income of the individual paying the tax
*The value of the taxable property

Exemption means, at the time of calculating annual income, this type of income
will not come under the purview of tax.

Some of these exempted incomes are as follows:

Agricultural income

Interest on amounts of nonresident external account in any bank in India

Interest on specified Central Government savings certificates.

Contribution to Sukanya samriddhi Account

21
Come of individuals engaged in research work in India under the under duly
approved research schemes and remuneration received from foreign
government for training in government office or undertaking as employee

Payment on a life insurance policy including bonus there on but excluding there from amount
received under section 80 DDA (3)

Sikkimese Individual income

Special benefits and allowance to employee house rent allowance

Interest payable to any bank incorporated outside India and approved by RBI
Scholarships granted to meet the cost of education

Receipt of any amount in connection with an award instituted by government etc

Income of a university or other educational institution

Pension received by recipient of gallantry awards

Some other categories include combat pay to military officers, inheritance,

payment for personal injuries, employee discount, and incomes from local
bonds. There are a number of protected classes like Windows, people above 65
war retired persons, and disabled persons.

However, one should not get confused with the concept of tax deduction and
tax exemption as when an expense received by a taxpayer is deducted from the
gross income resulting in the lowering of the net taxable income it is tax
deduction and not tax exemption. There are many types of income and benefits
being exempted from income taxes to a limited extent.

22
Forms of income tax

ITR-1 SAHAJ Indian Individuals having income from salaries, one

Individual Income Tax Return House property, and others sources (Interest
etc.)

ITR-2 and 2A For Individuals and HUFs not For individuals and hindu undivided families
having Income from Business or Profession (HUF)
not having income from business and
profession

An individual or a Hindu undivided family

ITR 3 who have income from proprietary business
or are carrying on profession

ITR 4 For presumptive income from business and

profession

ITR 5 For person other than – individual, HUF,

company, person filing form itr7

ITR 6 All businesses, apart from those that can

hold their income form properties for
charitable or religious reasons.

ITR 7 Persons including companies required to

furnish return under section 139(4A) or
section 139(4B) or section 139(4C) or section
139(4D)

23
TAX RETURN
There are five categories of income tax returns
Normal return
Belated return
Revised return
Defective Returns
Returns in response to notices

*Normal return
Returns field within the return filing due date that is 31 July of concerned previous year

*Belated return
In case of failure to file the return on or before the due date, belated return can be filed before
the expiry of one year from the end of the relevant assessment year.

*Revised return
In case of any omission or any wrong statement mentioned in the normal return can be revised
at any time before the expiry of one year from the end of the relevant assessment year.

*Defective return
Assessing officer considered that the return is defective, he intimate the defect. One has to
roughly rectify the defect within a period of 15 days from the date of such intimation. If the
assessed wants more time, he can file an application to the A O and a further 15 days can be
granted at the instance of the A O.

24
* Returns in response to no notices
Assessing officer in the process of making the assessment may serve a notice under various
sections like 142 (1) 148 (1), 153(A), 153C. Returns are required to be furnished within the
date specified on the respective notices.

Signing of Return:
The return of income must be signed and verified in case of an individual By the individual
himself
Where he is absent from India, by the individual himself or by some person duly authorized by
him in this behalf
where he is mentally incapacitated from attending to his affairs, by his guardian or any person
competent to act on his behalf
Where for any other reason, it is not possible for the individual to sign the return, by any
person duly authorized by him in his behalf

Penalty
Under the existing law, penalty for delay in filing of return of income is calculated as a
percentage of the short-fall of tax. Where tax has already been deducted at source, or advanced
tax has been duly paid, no penalty is liveable. It is proposed to amend the law to provide for
the penalty of rupees 1000 even in such cases. This provision is targeted towards the salary
earners who always had the impression that their liability was over the moment the tax was
deducted by the employer.

Some terms associated with filing of income tax return

Financial Year (FY) (or fiscal year) is a period used for calculating annual or yearly financial
statements in businesses and other organization’s such as the government. In India, the
financial year runs from 1 April to 31st March, for example 1 April 2020 to 31st March 2021
for the current financial year 2020-2021.
Previous year (PY) means the financial year in which the individual has actually earned the
income (currently 2020-2021)

25
Assessment Year (AY) is the year when that Income is assessed (currently 2021-2022)
Income is assessed in the next financial year.

Due Date:
The last date for filing income tax return for an Assessment Year is called the due date. For
individuals it is usually 31st July of the assessment year.
* Individuals 31st July
* Companies 31 September
For financial year 2020-2021(AY 2021-2022) filing return for individuals is 31st
July2022 you need not wait till end of July once you get form 16 (usually around min may)
you can file the return.

26
 CHAPTER - 4
Research Methodology

27
Primary Data: Data as collected from clients.
Such as Form 16, Property Papers for Capital Gains, Insurance Premium
Statements, House Property Loan Interest Statements. Information about Capital Gains from
sale of shares, Income from Debt Funds, fixed deposit interest statements, rental agreement etc.

Secondary data: Data as shown in the Income Tax E-filing Website

(efilingincometaxindia.gov.in)

TDS/TRACES Form which provides the details of TDS on Interest on FD, Tax deducted by
employer.

Hypothesis of the study -

To assess the taxpayer’s perception, awareness towards e-filing of income tax returns.
To analyses the level of satisfaction among the taxpayers towards e-filing of income tax
returns.
Results and discussion
This study mainly focuses on assessing awareness and satisfaction level of taxpayers about e-
filing of income tax returns.

28
 CHAPTER - 5
Data Analysis and Interpretation

29
DATA ANALYSIS AND INTERPRETATION
A) Flowchart of information collection for tax assessment:
Discussed with the clients about their various sources of income (heads of income),
Example: income from salary for financial year 2020-2021
Income from house property: whether the person is owning any house and has taken any
home loan
If Yes- The amount of EMI paid during 2020-2021 to get the benefits of
A: Interest on home loan under section 24 (1)(6). Max. Exemption rupees 2 lakhs
B: Principal repayment during the year as eligible for deduction under section 80c revenues
out of the property.
Whether the person is owning more than 2 house
If Yes: A: Rental income from third house property during 2020-21
: Municipal/ corporation taxes paid if any.
C: home loan taken on second house property (interest as eligible w/o any limit
# In case of 3rd HP/leased House principal repayment is not eligible for deduction under
section 80c.
Income for capital gains:
To enquire about any short/long term gains from:
A. Sale of properties/fixed assets i.e., Land building etc.
B. Sale of securities such as shares, mutual funds and debt schemes etc.
Income for other sources: to enquire about any of the incomes from other sources such as
interest form
A. Banks Fixed Deposits, recurring deposits, Saving Banks.
B. Postal saving schemes, MIS, NSS, NSC etc.
C. Dividend Income, any other etc.

30
B) Procedures of E-filing of Income Tax Return

ONLINE TAX IN INDIA

In India online tax filing has become an integral part of the process of registering tax returns.
With the increasing penetration of the Internet and rising levels of web awareness and work
pressure among taxpayers, many people now prefer to fill the tax according to their
convenience and avoid the cases.

What is e-filing of income tax return?

The process of electronically filing income tax returns through the internet is known as e-
filing. One can file directly (income tax website-www.incometaxindia efilling.gov.in through
available utility in Excel format) or through an e-Return returned Intermediary such as tax
smile, Tax spanner or with the help of Chartered Accountants/ tax consultants. While the IT
Department lets you file your returns online for free, most other portals/ consultants charge a
fee.

Who is e-Return Intermediary?

An intermediary (or go between) is a third party that offers intermediation services between
two parties which in case of income tax return is the Income Tax Department and the
taxpayer. The Income Tax Department (ITD) allows authorized intermediaries to
electronically file returns on behalf of taxpayers. It is allowed under a scheme titled Electronic
Furnishing of Return of Income Scheme, 2007 to improve interface. TIN NSDL website has
more information about e-Return Intermediary.

What is the physical filing of an income tax return?

In case of physically filing the return, an individual needs to fill the printed form of the hard
copy and submit it to the nearest Income Tax Office (ITO) and get acknowledgement.
E- Filing return is compulsory for
Individual/HUF who is less than 60 years of age and has an annual income more than Rs 2.5
lakh i.e. above basic exemption limit has to file income tax returns, according to the Income

31
Tax Act. For senior citizens, the basic exemption limit is Rs 3 lakh and for those who are more
than 80 years old, the basic exemption limit is Rs 5 lakh.

HOW TO FILE ONLINE TAX IN INDIA

The basic steps for filing tax returns online in India can be mentioned as below:
Customers need to sign up with the service provider to be able to avail their services
After signing up customers need to enter their financial details.
The returns will be generated on the basis of entries.
Once the data is entered the software reviews it.
After the computation is done the client needs to give the payment on the basis of the filling
plan chosen by them.
Next, the user needs to authorize the service provider to file the tax returns on their behalf.
The acknowledgement will be provided via email once the process is completed and the
document is signed digitally. The customer receives ITR-V if the document is not signed
digitally.

Following are the major benefits for taxpayers who use the tax filing portal:
These companies provide the users in-depth knowledge of tax laws
The technology used by these companies is comparable to the best banks across the world
Tax computation services are provided free of cost. Tax payers only need to pay when they are
filing the tax returns
They do not put the users off with necessary for pop-ups or advertisements.

Majority of the sites are backed by the Income Tax Department. This means that these
companies are authorized to file tax returns with the IT departments on behalf of their
customers
Tax returns can be prepared and filed by customers from any income class.

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E-FILING
Select the appropriate type of Return.
Download return preparation software for selected returns form.
fill your return offline and generate an XML file.
register and create a user id password at incometaxindiaefiling.gov.in
Login and select relevant assessment year on left panel under “Submit Return:
In next screen select the form name (whichever is applicable in your case)
(I) select digital signature NO
(II) In next screen Browse select as XML file prepared by you and click on “Upload
button”
On successful upload acknowledgment details would be displayed. Click on “print” to
generate a printout of acknowledgement/ ITR-V Form.
In case the return is digitally signed, on generation of “acknowledgement” the return filing
process gets completed.
In case the Return is not digitally signed, on successful uploading of e-return, the ITR-V form
would be generated which needs to be printed by the taxpayers. This is an acknowledgement
cum verification form.
A duly signed ITR-V form should be mailed to
“Income Tax Department- CPC, Post Bag Number -1 Electronic City post office, Bangalore-
560100 ,Karnataka” by ordinary post or speed post only within 120 days of transmitting
the data electronically.

ITR-V sent by registered post or courier is not accepted.

No form ITR-V shall be received in any other office of the Income Tax Department or in any
other manner. In case, Form ITR-V is furnished after the above mentioned period, it will be
deemed that the return in respect of which the form ITR-V has been filed was never finished
and it shall incumbent on the assesses to electronically re-transmit the data and follow it up by
submitting the new form ITR-V within 120 days. This completes the Return filing process for
non- digitally signed Returns.

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NEED FOR VERIFICATION OF INCOME TAX RETURN
Legally one should return only that much income which one earns. But there are mal-practices
such as showing his income so as to pay less tax on some people file ITR in the name of their
children or their wife or other relatives. Often, such malpractices of returning less income are
deliberate. But sometimes it can even be due to ignorance of law and miss-application of law.
So there is a need to process and verify those income tax returns.

DIFFERENT METHODS OF FILING INCOME TAX RETURNS

* E-Filing with digital signature- This option requires one to use a digital signature to sign
the e-form. It is the most time saving method as it ensures you don't have to visit any
department office again.
* E-filing without digital signature- If you don't have digital signature, you will need to
print out the single page receipt cum verification form, called ITR-V, after completing
the e-filing process. The Form ITR-V has to be sent to the CPC Centre either through
ordinary or Speed Post, within 120 days of uploading the electronically filed return.
* Manual filling- People who are not comfortable with the online system may choose to use
the traditional paper form option.

WHAT IS A DIGITAL SIGNATURE?

A digital signature authenticates electronic documents in a similar manner a handwritten
signature authenticates printed documents. This signature cannot be forged. India is one of the
select bands of nations that has the Digital Signature Legislation in place. This Act grants
digital signatures that have been issued by a licensed Certifying Authority in India the same
status as a physical signature. The digital signature certificate is typically issued with one year
validity and two year validity.
You can get a digital signature from Certification Agencies. Certification Agencies are
appointed by the office of the Controller of Certification Agencies (CCA) under the
provisions of IT Act 2000 there are a total of 7 certification Agencies authorized by the CCA
to issue the Digital Signature Certificates.

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1. Tata Consultancy Services CA
2. National Information Centre
3. Institute for Development and research in banking Technology
4. MTNL
5. Node solutions Limited
6. Safe’s crypt
7. E-Madras

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The important declarations that are to be made while undertaking the process of e-filing tax
are as follows-
36
E-FILING PROCESS
Information required for individual taxpayer-
A copy of last year's tax return
Bank statement
TDS Certificate
Savings certificates /deductions
Interest statement showing interest paid to the individual throughout the year

Information required for corporate tax payer:

* A copy of last year's tax return
* Bank statement
* TDS Certificate
* Saving certificate/ deductions
* Interest statement showing interest paid to the corporate throughout the year
* Profit and loss account
* Balance sheet

Taxpayer privacy and security assured

Improve data quality, thus reducing the risk of audits and penalties as returns filed
Electronically have a much lower error rate than paper return.
Value added services like viewing Form 26AS, tracking of refunds, email, SMS alerts
regarding status of processing and refunds.

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After Filing Income Tax Return
Every system, right from the school, requires assessment and verification. So does the Income
tax. Every person/firm/HUF is required to file Return of Income if his total Gross income
(without deductions) exceeds the exemption limits. The tax is determined as per taxation laws
existing in the particular assessment year. As we know, after the end of the financial year
every person who is required to file an income tax return, should file his return of income or
ITR. ITR under normal course should be filed under section 139(1). The normal time limit of
filing the ITR -which for non-audit cases is July 31 of the Assessment year and for audit cases
September 30 of the assessment year. Thus, an assessor calculates the tax and Income, pays
tax if due, files his return of income. This process of self- calculation of Income and Tax is
therefore called self-assessment.

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 CHAPTER – 6
Findings, Suggestions, and Conclusion

39
6.1 FINDINGS

of the individual tax payers are private employees.

of the individual tax payers are living in the city area.

e---.

6.2 SUGGESTIONS

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CONCLUTION

In the present world day by day new technologies are introduced and improved very fast in all
fields. Now new technology gifted to tax payers for filing their income tax returns through
online is e-filing. The e-filing is the new effective method of filing income tax return through
online and make e-payment tax. It saves our golden time, energy and cost and also reduces our
tension. So the tax – payers are requested to use e-filing and e-payment facilities. This study
reveals that the existing users are satisfied with the e-filing facilities but most of the individual
tax payers are not aware of the e-filing and e-payment procedures so sufficient steps are
required to create more awareness in the minds of tax payers regarding e-filing of Income tax.
E- Filing has made filing the return so simple and easy that any individual can file his return
any time anywhere by just few clicks.
On the basis of above study, it can be concluded that, there has been a tremendous growth &
development in the e- filing process in our country. With more awareness in the taxpayers
ABOUT THE PROCESS, E- FILING COULD BE MADE COMPULSORY IN OUR
COUNTRY.

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 CHAPTER – 7
Key Learning, Bibliography

42
KEY LEARNING
Company Registration on Income Tax Portal
How to file GST returns
Data entry of Accounts

BIBLIOGRAPHY

Bibliography
Websites referred www.rbi.gov.in
www.incometaxindia.com www.incometaxe-filing.gov.in
Books referred
Direct Tax, Published by ICAI

ABBREVIATION

CBDT - Central Board for Direct Tax

CIB -Commissioner of Income
TDS- Tax Deducted at Source
ROC- Registrar of company
FMP - Fixed maturity plans
HUF’s - Hindu Undivided Families
NSC -National Saving schemes
STT- Securities Transaction Tax
ITD- Income Tax Department

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Questionnaire
Name Of the Assesses: _____________________________________
Occupation: ________________________________________________
Gender: ____________________________________________________
Qualification: ________________________________________________
Address: ____________________________________________________

Are You Regular Taxpayer?

Yes No

Under Which Heads Of Income, Your Income Become Taxable?

Income From Salary

Income From House property

Income From Business / Profession

Income From Other Sources

Capital Gain

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What Is Your Income Range?

Less Than Rs 3 Lakhs

Rs 3 lakhs To Rs 5 Lakhs

More Than Rs 5 lakhs

4. What Is Your Impression About The Fees Charged By Your Tax?

Higher

Lower

Reasonable

Any Other

5. Generally When You Do Prepare for Filling the Return?

1 Month Before Due Date

1 Week Before Due Date
2-3 Days Before Due Date
After Due Date

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6. Has Any Penalty Being Levied By Income Tax Authority For Filling Up Tax Return
Late?

Yes
No

7. Since How Many Years You Are Filling Return?

0-5 Years

5-10 Years

10-15 Years

More Than 15 Years

8. What Is Your Preferred Investment to Reduce Tax Liability?

LIC Mutual
Fund Fixed
Deposit
PPF Other

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