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Every year a Budget is presented before the Parliament by the Finance Minister. The Part A of the Budget contains proposed policies of the Government in fiscal areas and the Part B contains the detailed tax proposals about the direct and indirect taxes. The chapter of this book covers the provisions under Income Tax Act, 1961 including the rates of tax for the Financial Year 2016–17.

As a direct tax, income tax is an annual tax on income. It is a tax imposed by the Government of India on any person who earns income in India during the Previous Year whether they are resident or non-resident. The job of monitoring the income-tax collection by the Government is entrusted to a department called Income Tax Department under Income Tax Act, 1961 and came into force with effect from 1st of April, 1962 (Income Tax Rules). This law provides for determination of taxable income, tax liability and procedure for assessment, appeal, penalties and prosecutions. Only the Finance Act shall bring amendment to this Act.

As per Financial Year 2016–17 or Assessment Year 2017–18, an individual/assessee reduce his/her tax burden by taking the advantage of deductions available under Income Tax Act, 1961 and Income Tax Rules 1962. The following basic principles are followed while charging income tax [Section 4]:

The Indian Income Tax Act, 1961 provides for chargeability of tax on the total income of a person on yearly basis. The quantum of tax determined as per the statutory provisions is payable as Advance Tax, Tax Deducted at Source (TDS), Self Assessment Tax and Tax Collected at Source.

Income tax is charged on the total income of the Previous Year as assessed to tax in the Assessment Year. An assessee is required to pay the tax through online or offline before filing the return. He ensures that the amount of tax deducted is equal to its TDS certificate (Form 16). In any other case, the assessee wants to pay tax through challan forms or demanding the refunds through e-filing.

Every company or a firm or a person shall furnish a return of income, if his total income of the Previous Year exceeds the maximum amount which is not chargeable to income tax [Section 139(1)]. The return of income must be furnished and properly verified on or before the due date in the prescribed form. This chapter discusses various forms of income tax returns for filing the return of income and also, the provisions of income tax return under Income Tax Act, 1961.

Under E-Filing, the letter “e” means via internet/online or through electronically. This chapter of the book have been designed and designated to help you the concept and the necessity of e-Filing the return of income tax as well as TDS.

The chapter of this book is in a structured and a logical way to help you for filing the return of income online and also free of cost, without using digital signature through the official portal of Income Tax Department of India. Further, if you are a salaried person and filing your last return of income through Chartered Accountant (using digital signature) then through reset your password you can file the return for the current Assessment Year also. The procedure of filing the income tax return can be through Excel Utility or Java Utility. This chapter begins from zero level for file the e-return through Java Utility as it presumes that you know nothing about the e-return.