Step-by-Step Guide: How to File Your Income Tax Return with Ease

Filing an income tax return (ITR) is an essential task for every taxpayer. It is a legal obligation that requires taxpayers to declare their income, deductions, and taxes paid to the government. Filing your ITR on time ensures that you comply with tax laws and avoid penalties. This step-by-step guide will answer all your piling questions on “how to file Income Tax  Returns”.

Brief Overview of Income Tax Returns and their Importance

What are Income Tax Returns?

Income Tax Returns refer to the form that taxpayers file with the government that declares their income, expenses, and other tax-related details. The government uses this information to assess and collect taxes from individuals, businesses, and other entities. Income tax returns are an important aspect of the direct tax system as they serve as a tool to ensure that taxpayers are paying the correct amount of income tax and it is necessary to be filed to prevent tax evasion and tax avoidance.

Importance of filing tax returns

Filing income tax returns is not just a legal obligation but also a civic duty. Your income tax is a fiscal revenue for the government and government spending is dependent on it. Income tax returns also serve as proof of income, which can be required when applying for loans, visas, and other official purposes. Additionally, filing tax returns on time helps avoid penalties and legal consequences. 

Gather Required Information and Documents

Before filing your income tax return, it’s important to gather all the required information and documents to ensure a smooth and hassle-free process to file ITR


  • Personal Information (PAN, Aadhaar Card, and Bank Account Details)


  • Form 16 (A salaried employee receives Form 16 which includes details of your salary, tax deducted, and other allowances)


  • Investment Details (such as the amount invested, date of investment, and investment instrument)


  • Bank Statements


  • Rental Income (gather all rental receipts and lease agreements)


  • Long term or Short term Capital Gains (any long term or short term capital gains from selling assets, details of the sale price, purchase price and date of purchase)


  • Deductions (such as insurance premium, home loan interest, and donations)


By gathering all the necessary information and documents before filing your income tax return, you can avoid errors and reduce your concerns regarding “how to file income tax returns”.

Choose an Income Tax Filing Method

Choosing the right income tax filing method can make the tax filing process smooth and hassle-free and save you from the constant fear of “how to file IT returns”. Let’s take a closer look at both the online and offline filing methods:

  • Online Filing

Online filing is the most popular and convenient method to file your income tax return. It is also known as e-filing. To file Income Tax Return online, you can visit the Income Tax Department’s e-filing portal, which is a government website. 

One of the biggest advantages of online filing is that it is a paperless process. You don’t have to fill out any physical forms, and you can file your ITR from anywhere, at any time. The online filing process is also relatively faster and provides instant acknowledgement of your ITR submission.

  • Offline Filing

Offline filing involves filling out a physical copy of the ITR form and submitting it to the Income Tax Department’s office. You can download the ITR form from the Income Tax Department’s website or collect it from the Income Tax Department’s office. 

One of the main disadvantages of offline filing is that it is a time-consuming process, and you need to fill out the form manually. This can be challenging, especially if you are not familiar with tax laws and regulations. Additionally, the offline filing process does not provide instant acknowledgement of your ITR submission.

Understand the Tax Forms and Schedules

Filing taxes in India can be overwhelming due to the complex tax system and the numerous tax forms and schedules that need to be filled out accurately and timely. Therefore, it’s crucial to have a comprehensive understanding of the different tax forms and schedules to ensure compliance with tax regulations and avoid any future penalties. 

To make it easier for you to understand, we have put up a list that will provide you with a clear understanding of their purpose and their effective usage. 

Income Tax Returns Forms:

The Income Tax Department of India has designed various tax forms to cater to the needs of different taxpayers based on their income sources and business structures. Understanding the various tax forms and selecting the appropriate one is crucial for accurate filing and compliance with tax laws. By selecting the right tax form and providing accurate information, taxpayers can file their ITR smoothly and avoid any penalties or discrepancies in the future. Here are a few Tax Forms: 

  • ITR-1 (Sahaj)

This is a simplified tax return form designed for individuals who have income from salaries, one house property, and other sources such as interest income, pension income, etc., with a total income not exceeding Rs. 50 lakh in a financial year. However, individuals who are either directors in a company or have invested in unlisted equity shares cannot use this form.

Moreover, it is essential to provide accurate information in the form to avoid any discrepancies or penalties later on. You will need to provide details of your salary income, income from other sources, deductions claimed under various sections of the Income Tax Act, and tax paid or payable.

  • ITR-2

ITR-2 is a more comprehensive tax form than ITR-1 and is suitable for individuals and Hindu Undivided Families (HUFs) who have income from various sources such as salary, house property, capital gains, and interest, but not from the profits and gains of business or profession. 

The form requires the individual to provide detailed information about each source of income, such as the name of the employer, the amount of salary received, the name of the bank from which interest was earned, and the amount of capital gains.

  • ITR-3

ITR-3 is an income tax return form meant for individuals and Hindu Undivided Families (HUFs) who earn income from profits and gains of business or profession. It is a more complex form than ITR-2. The business or profession from which they earn income includes freelancers, self-employed individuals, and people running their own businesses.

This form can also be used by individuals who are partners in a partnership firm. The form requires the taxpayer to provide detailed information about their income, expenses, and deductions related to their business or profession. The purpose of this form is to accurately assess the income generated from business or profession and to ensure that the correct amount of tax is paid on it.

  • ITR-4 (Sugam)

This is a simplified tax form designed for small taxpayers with a simple tax structure. This form is for individuals, HUFs, and partnership firms who have a turnover of up to Rs. 2 crores in a financial year. It is suitable for taxpayers who have income from a small business or profession, and the income is assumed to be 8% or more of the gross receipts.

The advantage of using this form is that it simplifies the tax filing process, as taxpayers are not required to maintain detailed books of accounts. Instead, they only need to provide a summary of their business or professional income. This makes it easier for small taxpayers to comply with tax laws and file their returns accurately and on time.


When filing an ITR in India, taxpayers may need to provide additional information through supplementary forms called Schedules. These schedules provide detailed information about specific types of income, investments, and deductions, and help the income tax department to accurately assess the tax liability of the taxpayer. Here are some of the common schedules that taxpayers need to be aware of:

  • Schedule DI

Schedule DI is a schedule that needs to be filed along with your tax return if you have investments in unlisted equity shares or shares of a startup. This schedule is used to declare the details of investments made during the financial year. 

Taxpayers can claim deductions under various sections of the Income Tax Act by providing details of investments made in specific schemes, such as Public Provident Fund (PPF), National Savings Certificate (NSC), and Equity-Linked Savings Scheme (ELSS). These deductions can help reduce the total taxable income and, therefore, the tax liability.

  • Schedule EI

Schedule EI is used to declare the exempt income received during the financial year. Exempt income refers to income that is not subject to tax, such as dividends from domestic companies, interest on tax-free bonds, and agricultural income. It is important to declare all exempt income in this schedule, as failure to do so could result in a notice from the income tax department.

  • Schedule SI

Schedule SI is used to declare the income from salaries. Taxpayers must provide detailed information about the source of income, such as the name and address of the employer, the amount of salary received, professional tax, perquisites and deductions. This information helps the income tax department to accurately assess the tax liability of the taxpayer.

  • Schedule HP

Schedule HP is used to declare the income received from house property. Taxpayers who own one or more house properties are required to declare the rent received or expected to be received from each property, along with details of any deductions claimed under Section 24 of the Income Tax Act, such as interest paid on a housing loan.

  • Schedule CG

Schedule CG is used to declare the capital gains earned during the financial year. Capital gains refer to the profit earned from the sale of a capital asset, such as a house, shares, or mutual funds. Taxpayers must provide details of the asset sold, the date of sale, the cost of acquisition, and the sale price. They must also calculate the capital gains and claim any deductions available under the Income Tax Act.

  • Schedule OS 

Schedule OS is used to declare the income received from other sources, such as interest on fixed deposits, winnings from lotteries, and gifts. Taxpayers must provide details of each source of income and the amount received. This information helps the income tax department to accurately assess the total taxable income of the taxpayer. 

How to File Your Tax Return

Landing onto your crucial question – “How to file Income Tax Return?” 

The answer is right here!

We’ve put up a step-by-step guide on how to file a tax return:

  • Gather all necessary documents and information, such as your PAN, Form 16, bank statements, and investment details.
  • Choose an income tax filing method, either online or offline.
  • Understand the tax forms and schedules applicable to you based on your income sources and deductions.
  • Calculate your taxable income, tax liability, and deductions using the relevant tax forms and schedules.
  • Verify all the information filled in the tax return form and make necessary corrections if required.
  • Pay the tax liability, if any, through the online portal or by submitting a physical challan.
  • Submit your tax return either online or by physically submitting the signed ITR-V to the relevant income tax office.
  • After filing your tax return, ensure to keep a copy of the filed return and other relevant documents safely for future reference.


Filing your tax return may seem overwhelming, but following these steps can make it a smooth and hassle-free process.

What to Do After Income Tax Filing

Congratulations, you have successfully filed your income tax return! However, your work is not entirely done yet. Here are some essential things to do after filing your tax return:

  • Verify your ITR
  • Check the status of your return
  • Keep the necessary documents ready
  • Respond to any notice received from the Income Tax Department
  • Plan for the next financial year


Filing your income tax return can be a daunting task, but following these step-by-step guidelines on “how to file Income Tax Returns” can make the process a lot easier. It is essential to gather all necessary documents and information, choose the appropriate tax form, and accurately report your income and deductions. Additionally, it is important to file an IT return on time to avoid penalties and interest charges.

However, it’s important to note that tax laws and regulations can change from year to year, and it’s crucial to stay informed of any updates that may affect your tax situation. Remember that filing your tax return is not only a legal requirement, but it also ensures that you are paying your fair share of taxes to support public services, infrastructure development and programs. By following these steps and staying informed, you can file your tax return with ease and confidence.

Amit Arora Finnable


I am a seasoned retail banker with over 21 years of global experience across business, risk and digital. In my last assignment as Global Head Digital Capabilities, I drove the largest change initiative in the bank to deliver the end-to-end digital program with over US$1 billion in planned investment. Prior to that, as COO for Group Retail Products & Digital, I implemented a risk management framework for retail banking across the group.
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