Understanding income tax in India is an important aspect of civil responsibility and personal financial management. The submission of Income Tax Return (ITR) not only ensures compliance with the law, but also helps individuals to demand reimbursement, establish financial credibility and avoid punishment.
For the first time, for taxpayers, however, the process can often look complicated and heavy. From decoding the tax jargon to choosing the right ITR form, the first experience can raise many questions. This blog breaks down things that are important to help new taxpayers submit returns with clarity and confidence.
What is Income Tax, and Why Do I Need to File an ITR
Income tax is a direct tax imposed by India’s government on the income of a person or institution during a financial year. It is an important source of income that supports the country’s infrastructure, development plans and public services.
The submission of income is the process that individuals declare their annual income, deductions and tax obligations to the income tax department. This is legally compulsory for those whose income is higher than the basic exemption limit or who meet other specified criteria in accordance with the Income Tax Act.
Filing an ITR serves as a legal mandate, ensuring that taxpayers meet their compliance obligations. In addition, it also acts as proof of income – an important document that is often necessary for visa applications, bank loans or large investments. In addition, if further tax is cut on the source (TDS), only appropriate tax returns allow individuals to claim reimbursement from the department.
First-time taxpayers may not realise that ITR filing also helps in carrying forward losses such as capital or business losses, which can be set off against future gains. Moreover, regularly filing returns encourages financial discipline, helping individuals track earnings, manage tax-saving investments, and plan finances more effectively year-on-year.
Determining Your Taxable Income and Status
Before starting the submission process for tax returns, it is necessary to understand how your taxable income is calculated. The Income Tax Act classifies income under five income bills: salaries, homework, business or occupation, capital gains and other sources (e.g. interest income). These create your gross total income (GTI).
When the GTI is calculated, the chapter helps reduce the qualified taxable part during VI-A. General cuts include:
Section 80C: Investments in LIC, PPF, ELSS, EPF, and tuition fees (up to ₹1.5 lakh annually).
Section 80D: Premiums paid for health insurance for self and family.
Section 80E: Interest on education loans for higher studies.
Section 80G: Donations to specified charitable institutions.
Section 80TTA/80TTB: Interest income from savings accounts (for individuals and senior citizens, respectively).
After claiming the deduction, the remaining amount is your total taxable income (TTI). If the TTI stems from the original discount area (currently less than 60 people), you may not need to pay taxes, although the submission of a tax return can still be favourable.
Finally, while calculating your tax liability, you can choose between the old tax regime (with deductions and exemptions) or the new tax regime (lower tax rates but no deductions). The choice of regime can impact how much tax you owe and should be made carefully based on your income composition and savings.
Essential Documents for Filing ITR
In order to ensure accurate and trouble-free submission of tax returns, it is important to collect and verify the main documents in advance. These record income reporting requires deductions and values financial transactions as a base.
Start with your PAN card (permanent account number), which is mandatory for ITR submission and links all your financial and tax posts with the income tax department. Your Aadhaar card should also be delivered, as it is necessary for e-Satyapan and is now compulsory under section 139aa of the Income Tax Act.
For officials, Form 16 is an important document. It is issued by the employer and has a detailed summary of the salary, the tax deduction and TD (tax deduction at source) made during the financial year. If you have earned interest income or rent, documents such as Form 16A, Form 16 B and Form 16C will help report TDS on non-SALT payments.
The Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) provide a consolidated view of your financial activity—such as interest earned, securities traded, and TDS entries. These reports are available on the income tax portal and help ensure accuracy in filing.
In addition, you can maintain bank statements or passbook listings to cross-interest income, transactions and cash flows. It is especially useful for identifying taxable income that may not be reflected in Form 16 or AIS.
Finally, keep all investment certificates such as LIC Premium, ELSS receipts, health insurance payments or donation receipts. These chapters are necessary to support the deduction under VI-A and ensure that you require all qualified benefits.
Step-by-Step Guide to Online ITR Filing for First-Time Taxpayers
If you’re filing your return for the first time, online Income tax return filing can seem complex—but following these steps will help simplify the process:
Step 1: Register on the Income Tax E-filing Portal
Visit https://www.incometax.gov.in and create an account using your PAN, Aadhaar, and contact details. This portal is your central dashboard for ITR filing and related services.
Step 2: Download AIS/TIS and Form 26AS
Access your Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) for a detailed view of financial transactions. Download Form 26AS to verify the TDS/TCS entries and advance tax paid during the financial year.
Step 3: Choose the Correct ITR Form:
Selecting the right form is crucial for accurate Income Tax Return Filing:
- ITR-1: For salaried individuals with total income up to ₹50 lakh and limited income sources.
- ITR-2: For those with capital gains, more than one property, or foreign income.
- ITR-3: For professionals or business owners.
- ITR-4 (Sugam): For presumptive income taxpayers like freelancers and small businesses.
Step 4: Prepare Your ITR
Input your personal, income, and deduction details manually or via pre-filled data. Double-check figures against your Form 16, AIS/TIS, and bank statements.
Step 5: Calculate Tax Payable/Refund Due
Once details are filled, the portal auto-computes your tax payable or refund due based on the tax regime selected and deductions claimed.
Step 6: Validate and Submit the ITR
Review the entire return, fix errors if any, and click on ‘Submit’. The system may prompt you to check certain fields before final submission.
Step 7: Verify Your ITR (E-Verification is Key
The ITR must be verified within 30 days of submission. E-verification via Aadhaar OTP, net banking, or other options is quick and legally binding.
Step 8: Receive Acknowledgement
Upon successful verification, you’ll receive an ITR-V acknowledgement on your registered email. This marks the completion of your ITR filing process.
Common Pitfalls for First-Time Taxpayers to Avoid
For the new submissions of tax returns, small errors can lead to major consequences such as notice, punishment or loss of reimbursement. Here are some common errors that taxpayers should be aware of and avoid for the first time:
One major oversight is not reconciling data between Form 16, AIS/TIS, and Form 26AS. One major oversight is not reconciling data between Form 16, AIS/TIS, and Form 26AS.
Another frequent error is choosing the wrong ITR form. Using an incorrect form can invalidate your return altogether. Make sure the form is consistent with your sources of income, property ownership and profession.
Many first-timers also miss out on deduction opportunities under Section 80C, 80D, and other provisions—resulting in higher tax liability than necessary. Keeping your investment proofs ready and reviewing your eligibility can help save significantly.
Some people forget to confirm the ITR after depositing it. Without confirmation, the return is not processed, so the return is invalid. Always complete e-verification within the deadline.
The file at the last minute is another trap. This increases the risk of technical problems, errors or lack of documents. Early filing gives you time to review and correct if necessary.
Finally, some believe that there is no need to enter the basic discount area means less income than the limit. Although the tax may not be paid, it may be useful to claim the submission of reimbursement, additional losses, or maintain financial records – especially when applying for a loan or visa.
If any part of the process feels overwhelming, consulting an income tax lawyer can help ensure accuracy and compliance from the start.
Conclusion
For the first time, there is no scary tax return. With awareness of correct information, documents, and general errors, taxpayers can approach this process with greater confidence. Whether your goal is legal compliance, reimbursement requirements, or financial items, timely and accurate ITR submission plays a crucial role. Taking an active prospect helps you avoid punishment, streamline your financing and continue year by year. If you are unsure of any step, seeking support from a professional income tax lawyer can make the process even and flawless.
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Thanks for explaining in detail.My only problem is Form 26 AS is downloaded as Zip file.An old hag like me doesn’t have the knowledge to unzip it.IT Dept should have enabled it in unzipped format only.Running to browsing centres, auditors,CAs takes waiting time.It also costs