Entities liable for paying income tax include:
- Individuals: Salaried and self-employed individuals.
- Hindu Undivided Families (HUFs).
- Companies: Private and public limited companies.
- Partnerships and LLPs
- AOP and BOI: Association of Persons and Body of Individuals.
- Trusts and Charitable Institutions.
- Foreign Nationals and Non-Residents.
For individuals, filing an Income Tax Return (ITR) is mandatory when their total taxable income for the financial year exceeds a minimum income limit, which is called the basic exemption limit.
Individuals below 60 years old: Rs 2,50,000 and above
Individuals aged 60–79 years: Rs 3,00,000 and above
Individuals aged 80 years and above: Rs 5,00,000 and above
2. Even if the Income does not exceed the above-mentioned minimum Income limit (as mentioned in Point 1 above), the ITR filing is compulsory if the Taxpayer meets any of the following criteria during the financial year: -
a) Foreign Assets:
- Owns assets outside India directly or as a beneficial owner.
- Is a beneficiary of assets located outside India.
- Holds signing authority in any account outside India.
b) Bank Transactions:
- Deposited over Rs. 1 crore in one or more bank current accounts.
- Aggregate deposits in one or more bank savings accounts of Rs. 50 lakhs or more.
c) Expenses:
- Incurred more than Rs. 2 lakh on foreign travel.
- Incurred an expenditure exceeding Rs. 1 lakh on electricity consumption.
d) Business/Professional Turnover:
- Business turnover exceeds Rs. 60 lakh.
- Professional gross receipts exceed Rs. 10 lakh.
(Not applicable for Taxpayers who do not carry on business, profession, or freelance.)
e) Tax Deducted and Collected:
- The total tax deducted or collected from the taxpayer during the previous year is Rs. 25,000 or more.
- For resident senior citizens (60 years of age or older), if TDS or TCS is Rs. 50,000 or more.
- Refund of Tax Deducted (TDS)/(TCS)
- Carry forward losses from business or other heads of income (e.g., loss on the sale of shares, capital losses) to the next financial year for set-off against future income.
Claiming a tax refund involves a specific process outlined by the income tax authorities. Here's a general procedure to claim a tax refund as per the Income Tax Act:
1. File Accurate ITR: Ensure accurate filing of your income tax return (ITR) with correct details.
2. Processing by Income Tax Dept: The Income Tax Department processes your return, verifying TDS and deductions.
3. Refund Determination: If eligible for a refund, the department determines the amount.
4. Refund Issuance: Refund is initiated via electronic transfer to your bank account.
5. Check Status: Monitor refund status on the official e-filing portal.
6. Verify Bank Details: Ensure accurate bank account details in your ITR for refund crediting.
It's important to note that the timeline for receiving a refund can vary. Timely and accurate filing of your income tax return, along with providing correct bank details, is crucial for a smooth refund process.
ITRs must be electronically verified within 30 days of the filing date; otherwise, the return may be deemed invalid.
E-verificaton can be done through the following modes:
1. Aadhaar OTP (One-Time Password): - Receive OTP on your registered mobile number linked with Aadhaar.
2. Net Banking: - Log in to your bank's net banking portal and select the e-verify option.
3. Electronic Verification Code (EVC): - Generate EVC through the income tax e-filing portal.
4. Bank Account Number: - Provide pre-validated bank account details for e-verification.
5. Demat Account Number: - Use your demat account details for e-verification.
6. ATM: - Some banks allow the generation of EVC through their ATMs.
These methods offer flexibility and convenience for taxpayers to verify their tax returns electronically. Choose the method that suits you best and ensures a smooth and secure e-verification process.
Preparing an individual income tax return involves several key steps. Here are the major ones:
- Gather Documents: Collect necessary documents, including Form 16, bank statements, investment proofs, and other financial records.
- Choose the Right Form: Select the appropriate ITR form based on your income sources and filing status.
- Calculate Total Income: Calculate total income by combining earnings from salary, business, capital gains, and other sources.
- Claim Deductions: Identify and claim eligible deductions under sections like 80C, 80D, and others to reduce taxable income.
- Compute Tax Liability: Calculate tax liability using the applicable income tax slabs and rates.
- File Online: Choose to file the return online, ensuring compliance with the specified deadlines.
- Verify ITR: Verify the ITR through e-verification methods or by sending the signed ITR-V to the designated address.
- Keep Records: Maintain copies of filed returns, supporting documents, and proofs for future reference or audits.
Yes, even if TDS (Tax Deducted at Source) is deducted from your salary, you are required to file an income tax return if your total income exceeds the basic exemption limit. Filing a return is necessary to provide details of your income, deductions, and taxes paid to the income tax department. Filing a return is a legal requirement and is essential for individuals with taxable income, irrespective of TDS deductions.
In order to verify the TDS information on your Form 26AS, you can follow these steps:
1.Access Form 26AS: Log in to the official Income Tax e-filing portal using your PAN (Permanent Account Number) and password.
2.View Form 26AS: Once logged in, go to the "My Account" tab and select "View Form 26AS" from the dropdown menu.
3.Choose the Appropriate Assessment Year: Select the relevant assessment year for which you want to view the Form 26AS.
4.Verify TDS Details: Review the details of TDS deducted by various deductors. Check for accuracy in the amounts, deductor names, and the corresponding financial transactions.
5.Download Form 26AS: If needed, you can download Form 26AS for your records.
Regularly monitoring and verifying your Form 26AS ensures that you have an accurate record of TDS deducted, facilitating smooth tax filing and minimizing potential issues with the income tax department.
Budget 2020 includes a new tax slab that will go into effect on April 1, 2020. Higher income earners pay lower tax rates under this new income tax bracket. It is voluntary and gives you the option of reducing your tax obligation. The specific deductions and exemptions allowed by the Income Tax Act of 1961 would not be accessible if you decide to calculate your taxes under the new tax system. However, the deductions and exemptions would be accessible under the previous tax system.
Comparison Of Old v/s New Tax Slab Rates
Range of Income | New Tax Rate | Existing Tax Rate |
|---|---|---|
Upto Rs 2.5 Lakhs | Exempt | Exempt |
Rs 2.5- Rs 5 Lakhs | 5% | 5% |
Rs 5- Rs 7.5 Lakhs | 10% | 20% |
Rs 7.5 -Rs 10 Lakhs | 15% | 20% |
Rs 10 - Rs 12.5 Lakhs | 20% | 30% |
Rs 12.5 - Rs 15 Lakhs | 25% | 30% |
Above Rs 15 Lakhs | 30% | 30% |
Note: Salary earners are eligible for the rebate under Section 87A of the Income Tax Act of 1961 if their net taxable income is up to Rs 5 lakhs. To make the tax liability zero, a rebate of Rs 12,500 or the actual tax due, whichever is smaller, would be permitted.
Yes, according to the provisions of the Income Tax Act, 1961, taxpayers have the option to switch between the old and new tax regimes based on their preference and financial considerations.
For taxpayers with Income from Business or Profession, if someone chooses the new tax regime, they are allowed to withdraw from it only once. After this withdrawal, they are not permitted to switch back to the new regime at any point in their lifetime. This restriction, however, does not apply to individuals who do not have any income from business or profession. In such cases, they have the flexibility to switch between the old and new tax regimes every year.
The new tax regime, often introduced as an alternative to the existing one, may offer lower tax rates but comes with the elimination of certain exemptions and deductions.
Advantages of the new tax regime:
- Lower Tax Rates: The new regime generally offers lower income tax rates compared to the existing one, potentially reducing the overall tax liability.
- Simplified Structure: The new regime aims to simplify the tax structure by eliminating various deductions and exemptions, making it easier for individuals to understand and comply.
- No Need for Tax Planning: With fewer deductions, taxpayers may find the new regime advantageous if they prefer a simpler approach without the need for extensive tax planning.
Considerations and potential drawbacks:
- Loss of Deductions: The removal of certain exemptions and deductions in the new regime may result in higher taxable income for some individuals, potentially offsetting the benefit of lower rates.
Ultimately, whether the new tax regime is more beneficial depends on factors such as income levels, investment portfolio, and the importance of specific deductions for an individual's financial situation.
To save on taxes, file your ITR. This allows you to claim deductions for things like investments in ELSS, PPF, NSC and payments such as housing loan repayments, insurance premiums, and donations.
Our Tax experts usually prepare and filed return within 2 working days, from the date of receipt of all the required documents.
After the preparation of the return all the details provided in the return are validated and then the same is uploaded on the income tax portal Once you successfully e-file your return, the acknowledgment (ITR-V) is usually generated immediately. You can download and save it for your records. You have the flexibility to download your acknowledgment from the online portal at any time.
Aadhaar Card
Contact details
You can reach our helpdesk using the Contact Us or Support Page.
You have the option to submit a ticket through the Support feature located on the homepage of our website.
