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Demystifying Income Tax and Income Tax Returns (ITR) in India: A Thorough Guide
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Understanding income tax is critical for every taxpayer in India. India's income tax structure is constantly changing. We bring you here the important ideas, tax rates, filing requirements, and procedural issues to help taxpayers navigate the tax environment. Income tax is a vital component of every country's financial system. The income tax system in India is designed to generate government revenue and assure the equitable distribution of resources. In this article, we will provide a comprehensive guide to income tax and Income Tax Returns (ITR) in India, covering key concepts, tax slabs, deductions, ITR filing requirements, and important taxpayer considerations.
The income tax is a direct tax on individuals, Hindu Undivided Families (HUFs), corporations, and other entities based on their income. Income tax in India is governed by the Income Tax Act of 1961, which defines the relevant provisions, rates, and procedures.
The Income Tax Act of 1961 is the primary piece of Indian legislation governing income tax provisions. It establishes the rules, regulations, and procedures for calculating taxable income, determining tax liability, granting exemptions, and enforcing compliance.
The Income Tax Act provides but is not limited to the classification of taxpayers, determination of taxable income, tax rates and slabs, deductions and exemptions, penalties for noncompliance, and submission procedures for income tax returns (ITR).
Let's take a look at some of the core concepts of income tax filing in India
Taxable Income:
The total income earned by an individual or entity is not taxable. The income after deducting permissible deductions and exemptions is used to determine the income tax liability, and it is known as taxable income.
Assessment Year:
The year in which taxpayers submit an assessment of their income earned in the past financial year. The assessment year 2023-24, for example, pertains to income earned during the fiscal year 2022-23.
Current Income Tax Slabs
Currently there are two regimes for tax in India, known as old and new, once can file ITR under the regime they have chosen.
Tax Slab for Assessment Year 2023-24 for Individuals Below 60 Years, NRIs and HUFs
Net Taxable Income |
New Tax Regime Income Tax Slab Rates FY 2022-23 |
Old Tax Regime Income Tax Slab Rates FY 2022-23 |
Up to Rs 2.5 lakh
|
Exempt
|
Exempt
|
Rs 2,50,001 to Rs 5 lakh
|
5%
|
5%
|
Rs 5,00,001 to Rs 7.5 lakh
|
10%
|
20%
|
Rs 7,50,001 to Rs 10 lakh
|
15%
|
|
Rs 10,00,001 to Rs 12.5 lakh
|
20%
|
30%
|
Rs 12,50,001 to Rs 15 lakh
|
25%
|
|
Over Rs. 15 lakh
|
30%
|
Net Taxable Income |
Income Tax Slab Rates FY 2022-23 (Old Tax Regime) |
Income Tax Slab Rates FY 2022-23 (New Tax Regime) |
Up to Rs 2.5 lakh
|
Nil
|
Nil
|
Rs 2,50,001 to Rs 3 lakh
|
5%
|
|
Rs 3,00,001 to Rs 5 lakh
|
5%
|
|
Rs 5,00,001 to Rs 7.5 lakh
|
20%
|
10%
|
Rs 7,50,001 to Rs 10 lakh
|
15%
|
|
Rs 10,00,001 to Rs 12.5 lakh
|
30%
|
20%
|
Rs 12,50,001 to Rs 15 lakh
|
25%
|
|
Over Rs. 15 lakh
|
30%
|
An income tax calculator is very useful estimating an individual's income tax liability and tax slab they will be subject to.
Below are the steps that you need to follow.
Income tax calculator tool is provided by other portals as well. The income tax calculator provides only an estimate for accurate and customized tax calculations based on your specific financial situation, it is always advisable to consult a tax professional or the official tax authority.
Paying income tax is very easy. You can use the government portal to pay off your tax liabilities in simple steps.
Individuals and businesses in India are required to file Income Tax Return online (ITR) to report their income, determine their tax liability, and accomplish their tax obligations.
Find The Correct ITR Form
The Income Tax Department of India offers a variety of ITR forms, including ITR-1, ITR-2, ITR-3, etc., each of which is designed for a particular category of taxpayers. You can locate the appropriate form on the website of the Income Tax Department or seek advice from a tax expert.
Fill in the ITR Form:
Complete the designated ITR form with the necessary information. Enter personal information, income information, deductions, exemptions, and any other pertinent information according to the form's instructions. Ensure accuracy and thoroughness when completing the form.
You would need to take help of documents like Form 16, investment proofs and any exemption that you have claimed.
Generate XML File
Using the tool supplied on the Income Tax Department's Income Tax E-Filing portal, generate an XML file after filling out the ITR form. This XML file will contain all information from the ITR form.
Submit the ITR Form:
Login to Income Tax Department's for Income Tax E-Filing portal (www.incometaxindiaefiling.gov.in). Choose the option to upload the XML file within the "e-File" section. Select the applicable ITR form and tax year, attach the XML file, and submit the ITR form.
Verifying ITR:
An acknowledgement will follow the ITR submission. Download the portal acknowledgement to verify. Your registered email will also receive the acknowledgement. Keep the ITR acknowledgement for future reference.
E-Verify the ITR:
You can e-verify the ITR using Aadhaar OTP, net banking, or a signed copy of the ITR-V to the Income Tax Department's CPC (Centralized Processing Center) within 120 days of filing.
Keep the ITR, acknowledgement, supporting documentation, and any pertinent records. These records should be kept for future evaluation, verification, or dispute resolution.
Taxpayers receive income tax refunds for overpayment. An individual or corporation may receive a refund if their tax deductions or payments exceed their tax due. The entire process of identifying the refund amount is done through ITR filing. The taxpayer will receive intimation from the income tax department in case any refund is found due. Taxpayers receive refunds through electronic transfer or check. Keep the return receipt for record-keeping.
Insaff99.com's tax professionals specialise in filing Income Tax Returns (ITR) & Income Tax Refund. We provide efficient and dependable ITR filing support with our extensive knowledge. Insaff99.com provides fast, reliable income tax refund services. We understand the importance of quick tax refunds and are devoted to efficient solutions. Our experienced experts work hard to get you the highest refund while adhering to tax laws. We handle refunds efficiently and reliably. We know tax rules inside and out, ensuring accuracy and compliance.
Insaff99.com prioritises customer satisfaction and a smooth ITR & Income Tax refund process. We strive to handle refund issues professionally, accurately, and quickly. Trust us to manage the return process and maximise your refund.
How to File an Income Tax Return?
Taxpayers can file income tax return by directly visiting the official portal https://www.incometax.gov.in/ and selecting the relevant form for their income category.
How to calculate income tax on salary with an example?
Raj earns salary of 10 LPA
Salary after Standard Deduction of 50,000= 9,50,000
His availed deductions are
His life insurance premium paid is 1,00,000
Medical insurance premium is 50,0000
Tuition Fee for child = 50,000
His Taxable income is 7,50,000
|
Post-Budget (Old Regime) FY(2023-2024 |
Post-Budget (New Regime) FY(2023-2024)
|
Total Income |
Rs. 10,00,000 |
Rs. 10,00,000 |
Exemptions & Deductions |
|
|
Exempt Allowances |
Rs. 0 |
Rs. 0 |
Standard Deductions |
Rs. 50,000 |
Rs. 50,000 |
Chapter VI A Deductions |
Rs. 2,00,000 |
Rs. 0 |
Taxable Income |
Rs. 7,50,000 |
Rs. 9,50,000 |
Tax due on above |
|
|
Income Tax |
Rs. 62,500 |
Rs. 52,500 |
Health and Education Cess |
Rs. 2,500 |
Rs. 2,100 |
After clearing SSC CGL exam one can become income tax inspectors. SSC CGL test processes to become an income tax officer.
Income Tax Slabs FY 2022-23 (AY 2023-24) for Senior Citizen
Net Taxable Income |
Income Tax Slab Rates FY 2022-23 (Old Tax Regime) |
Income Tax Slab Rates FY 2022-23 (New Tax Regime) |
Up to Rs 2.5 lakh
|
Nil
|
Nil
|
Rs 2,50,001 to Rs 3 lakh
|
5%
|
|
Rs 3,00,001 to Rs 5 lakh
|
5%
|
|
Rs 5,00,001 to Rs 7.5 lakh
|
20%
|
10%
|
Rs 7,50,001 to Rs 10 lakh
|
15%
|
|
Rs 10,00,001 to Rs 12.5 lakh
|
30%
|
20%
|
Rs 12,50,001 to Rs 15 lakh
|
25%
|
|
Over Rs. 15 lakh
|
30%
|
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