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How to use I-T department’s Excel utilities to file returns

On April 25, the Income-Tax Department made available Excel utilities for filing I-T Returns (ITRs) for the assessment year 2023-24. Only utilities for ITR 1 and ITR 4 forms have been released and others are awaited.

The Central Board of Direct Taxes (CBDT) notified the ITR forms in February, earlier than usual. Typically, ITR forms are notified in April near the start of the financial year.

“These two ITR forms (ITR1 and ITR 4) are the simplest of ITRs and there is not much change in the same vis-a-vis last year and possibly the reason why the CBDT has chosen to make these utilities live,” said Vivek Jalan, partner at Tax Connect Advisory, a multi-disciplinary tax consulting firm.

Let us read more about what are Excel utilities and how you can use them to file ITRs.

How Excel utilities help file ITR returns

ITR utilities are editable forms that can be downloaded from the I-T website, allow users to save them on their computers, fill them up, and upload them back onto the website. The forms are available in Excel format, therefore known as Excel utilities.

Besides Excel, these forms are also available in the newer technology format of JSON (JavaScript Object Notation).

Excel-Based Utility for income tax returns filing is offline mode (rather than online) to file the ITRs. Once the taxpayer fills these Excel-based ITRs, they have to upload them to the I-T portal. It is important to note that instructions to file the tax returns should be read before filing through the Excel utility,” said Yeeshu Sehgal, head of the tax market at AKM Global, a tax and consulting firm.

Suitability of ITR-1, ITR-4  forms 

Individuals who are residents of India, have a total income up to Rs 50 lakh and have income from salaries, one house property, other sources (interest income, etc), and agricultural income up to Rs. 5,000, should file their income tax returns using ITR 1.

If an individual, Hindu Undivided Family (HUF) or a company  (other than a Limited Liability Partnership) is a resident and has a total income up to Rs. 50 lakh, as well as income from business and profession that is computed under sections 44AD, 44ADA or 44AE (Presumptive Taxation Scheme), and agricultural income up to Rs. 5,000, they should file their ITRs using ITR 4.

Once you file income under the presumptive tax scheme, you have to follow the same method for the next five years. In case an assessee opts out in a year, she shall not be allowed to file returns under it for the subsequent five years

“There is no major change as compared to the previous year; however, there is an additional disclosure required in ITR 4 wherein additionally the taxpayer is required to disclose whether the new regime under section 115BAC was ever opted out of,” said Maneesh Bawa, executive director at  Nangia Andersen LLP.

Jalan added that in the case of assessees having income from business or profession, the option for the new income tax regime, once exercised, is allowed to be withdrawn only once in a lifetime.

The new ITR forms seek details if the assessee has ever opted out of the new regime in earlier years. If the assessee had opted out, he is required to give details of the assessment year in which he did so, the date of filing and acknowledgement number of Form 10-IE.

Things to consider while using Excel utilities to file ITRs

The first thing that a return filer should ensure is that he chooses the correct applicable ITR form and download the applicable utility accordingly.

“The taxpayer should carefully examine the applicability criteria before choosing the form which is to be filed. Also, each sheet of the Excel utility can be separately validated to help the taxpayer avoid errors and/ or filing the return with incomplete information,” said Bawa.

According to Sehgal, taxpayers need to exercise caution while entering the previous year's brought-forward losses. Additionally, they should verify their Permanent Account Number, bank account details and communication address for accuracy.

It is advisable to keep source documents handy before beginning to fill out the ITR form. The validation check should be performed tab-wise within the utility. Once the auto-tax calculation is completed, taxpayers should manually review the results for accuracy. To file their tax returns, taxpayers must download the latest utility for the current year.

Although the deadline for filing the income tax return for AY 2023-24 is July 31, it is advisable to file it earlier if you have all the necessary information and details. This will expedite the return filing process, securing any refunds, and prevent interest penalties.

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