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Comparison between e-filing vs manual filing of taxes

Wednesday May 31, 2017,

6 min Read

That part of the year is around the corner where the deadline of filing your income tax returns is approaching. It’s a compulsory process and mind you, also tedious one. It must be filed by all citizens whose gross total income, from salary, business or any other gains exceeds the exemption limit. (Section 139 of Income Tax Act, 1961.) And if you don’t file your returns on time, you are well aware of the consequences.

So what is e-filing of income tax returns? Simply put, it is when you file your returns online, via the internet, through the income tax department’s website. The development of websites has made the filing of income tax much easier and hassle free.

There are four ways through which you can file income tax returns.

1. Manual Filing: This is the traditional process wherein you manually go and file your returns.

2. Digital Signature: It involves using a digital signature on an e-form. It ensures that you don’t have to visit an office physically.

3. E-filing: In case of absence of digital signature, you have to complete the e-filing process and print the single page receipt cum verification form. This form then must be signed and physically submitted to the income tax office.

4. Intermediaries - An agent, a chartered accountant or a firm helps you in filing your income tax return and submitting it at the required window.

E-filing vs Manual filing of ITR

Does e-filing have any benefit over manual filing of ITR? Will it save time or lead to even more errors? Here’s how both manual filing and e-filing are different:

1. Convenience

We all know what practices we follow. Be it college assignments or income tax returns, we always wait for the deadline. When the deadline for filing approaches, only then do we see a number of people coming to tax offices. It can be cumbersome to manually file your returns as you have to be present there physically. E-filing on the other hand, allows you to sit comfortably in your office or home and file your returns. It saves the legwork.

2. Quicker refund

The most important aspect of filing income tax returns is quicker income tax refund. Most salaried employees, agents and contractors receive a paycheque from which an amount is deducted. This amount, also called as TDS can be claimed by filing income tax returns online. Refunds are received much earlier when you file your returns online than when you file it manually. So why have the last piece of the cake when you can have it first?

3. All documents in one place

E-filing income tax returns ensures that all your documents are safely tucked away in one place so that in case of urgency, such as Acknowledgments for Bank Loans, Income Proofs, you don’t have to search for them. The income tax server will save your data and by simply logging into your account on the income tax website, you can access it and take a print out if needed.

4. Updating status

When you have manually filed your return, you have to make rounds of the income tax office, bear the brunt of their slow process to know if your document has reached the tax department and your refund process is complete and it’s on its way. But, e-filing gives you the benefit of tracking your documents at the click of a button. Yes, manual e-filing could also be tracked online. So if you have to go online way, why not in the beginning.

5. Less errors

As you know the physical process of filing income tax returns, you have to enter valid details, make calculations, deductions and enter exact details which may lead to many errors. E-filing has inbuilt data validation and tax calculation program, that ensures that there would be no errors. The time for rectifying your mistakes is only 15 days, therefore e-filing is again, a better option at hand.

6. Revising errors

E-filing your income tax returns can be revised or reviewed by changing the information in the forms and uploading them. Physical revisions can be tedious with filing another form.

7. Cost savvy

How does e-filing income tax save money? This is a question worth pondering. When you file your income tax return manually, there are good chances of mistakes and you need the help of an expert. But this help comes at a cost. You will be required to pay these professionals their due costs. On the same end, e-filing your returns online will save this cost. Income tax websites will provide you with all the help necessary for filing an error free return. There are a number of software that also ensures the same.

8. Time savvy

Of course, taking all the efforts to visit the tax office, standing there in unending queues can be nullified by filing your income tax returns online. You will not have to visit the tax office for a minor query or an update.

9. Grievance Redressal

A new feature of Grievance Redressal has been added on the income tax department website. It enables a user to ask a query and officials from the department will provide you with answers and solutions. Why face the tantrums of the income tax department by visiting them when you can do it at your home?

10. E-verification

E verification of income tax return i.e. ITR-V can be verified by e filing it. You don’t have to send your ITR-V to CPC Bengaluru.

11. Saves trees

Yes, it might be a silly opinion but it is the most important benefit of filing your income tax returns online. Non-government organizations and environmental activists have been advocating the protection of environment by saving trees. Trees help us live, it maintains the temperature and by not using paper, you are saving trees, you are saving finite resources and taking a step towards sustainable development. Online filing of your returns does not come with such disadvantages and you can reliably use it for a better future.

12. E-filing is mandatory

Yes, that's the irony of it. With so many add on benefits, e filing of income tax returns has been made mandatory by the government. You must get your accounts audited by a Chartered Accountant. Also, for people claiming refund, it is necessary for them to e file their income tax returns. For those filing ITR3, ITR4, ITR5, ITR6 and ITR7, e-filing is mandatory.

E-filing of income tax returns can be done 24 hours a day, seven days a week. Documents can be accessed anywhere and anytime. It is more convenient and effective than manual filing. So, don’t think twice, file income tax returns online because it certainly beats offline filing in all aspects.