What is called Income Tax?

Income tax is a tax charged on the annual income of an individual or business earned in a financial year. The Income Tax system in India is governed by The Income Tax Act, 1961, which lays out the rules and regulations for income tax calculation, assessment, and collection.

What is Income Tax Return?

Income tax return is the form in which assesses file information about his/her income and tax thereon to Income Tax Department.

Why Should a Person file ITR ?

• If the persons want to claim an income tax refund from the department when your employer has deducted TDS.
• If the persons have earned from or have invested in foreign assets during the FY.
• If the persons wish to apply for a visa or a loan.
• If the person is a company or a firm, irrespective of profit or loss.
• If the person have loss from business/profession or under capital gains head, you will not be allowed to carry them forward to the next years unless you file the return before the due date.

In which case it is mandatory to file Income Tax Return?

As per the provision of Income Tax Act, 1961, an individual need to file Income Tax Return if his exceed the basic exemption Limit.

What are the situation an individual mandatory required to file ITR Irrespective of Income (i.e. even income below basic exemption limit)?

As per the provision of Income Tax Act, 1961, in the following cases an individual is mandatory required to file ITR irrespective of income earned:

• Deposited more than Rs 1 crore in 'current' bank account: You have to mandatorily file a tax return if you have deposited a total of Rs. 1 crore or more in one or more current accounts with a bank; or
• Spent more than Rs 2 lakh on foreign travel: You have to mandatorily file a tax return if you have incurred a total expenditure of more than Rs 2 lakh on foreign travel whether for yourself or any other person; or
• Electricity expenditure is more than Rs 1 lakh: You have to mandatorily file a tax return if you have incurred more than Rs.1 lakh towards electricity consumption during the previous year; or
• Holds, as a beneficial owner or otherwise, any asset (including any financial interest in any entity) located outside India or has signing authority in any account located outside India; or
• Is a beneficiary of any asset (including any financial interest in any entity) located outside India.

Which ITR to file?/How to select ITR form?/Criteria to select ITR form?

ITR-1 :
Resident individuals which have income less tha or equal to 50 lakhs from following sources:-

• Salary/Pension
• One house property
• Other sources

Who cannot use ITR-1 Form?

• Total income exceeding Rs 50 lakh
• Agricultural income exceeding Rs 5000
• If you have taxable capital gains
• If you have income from business or profession
• Having income from more than one house property
• If you are a Director in a company
• If you have had investments in unlisted equity shares at any time during the financial year
• Owning assets (including financial interest in any entity) outside India, including signing authority in any account located outside India
• If you are a resident not ordinarily resident (RNOR) and non-resident
• Having any foreign income
• If you are assessable in respect of income of another person in respect of which tax is deducted in the hands of the other person.
• If tax has been deducted under Section 194N
• If in case payment or deduction of tax has been deferred on ESOP
• If you have any brought forward loss or loss needs to be carried forward under any income head

ITR-2 :
ITR-2 is applicable for Individual or Huf whose income exceed 50 lakhs which includes:

• Income from Salary/Pension
• Income from House Property
• Income from Other Sources (including Winnings from Lottery and Income from Race Horses)
• If you are an Individual Director in a company
• If you have had investments in unlisted equity shares at any time during the financial year
• Being a resident not ordinarily resident (RNOR) and non-resident
• Income from Capital Gains
• Having any foreign income
• Agricultural income more than Rs 5,000
• Owning assets (including financial interest in any entity) outside India, including signing authority in any account located outside India
• If tax has been deducted under Section 194N
• If in case payment or deduction of tax has been deferred on ESOP
• If you have any brought forward loss or loss needs to be carried forward under any income head

Who cannot choose file ITR-2?
An individual or Huf whose income include income from Business/Profession.

ITR-3 :
The current ITR-3 Form is to be used by an individual or a HUF who have income from a proprietary Business/Profession. Individual/Huf having income from the following sources are eligible to file ITR-3:

• Carrying on a business or profession
• If you are an Individual Director in a company
• If you have had investments in unlisted equity shares at any time during the financial year
• The return may include income from House property, Salary/Pension and 5.Income from other sources
• Income of a person as a partner in the firm

ITR-4 :
The current ITR-4 applies to individuals and HUFs, Partnership firms (other than LLPs), which are residents and whose total income includes:

• Business income according to the presumptive income scheme under section 44AD or 44AE
• Professional income according to presumptive income scheme under section 44ADA
• Income from salary or pension up to Rs 50 lakh
• Income from one house property, not more than Rs 50 lakh (excluding the amount of brought forward loss or loss to be carried forward)
• Income from other sources having income not more than Rs 50 Lakh (excluding income from lottery and race-horses )

Who cannot use ITR-4?

• If your total income exceeds Rs 50 lakh
• Having income from more than one house property
• Owning any foreign asset
• If you have signing authority in any account located outside India
• Having income from any source outside India
• If you are a Director in a company
• If you have had investments in unlisted equity shares at any time during the financial year
• Being a resident not ordinarily resident (RNOR) and non-resident
• Having foreign income
• If you have any brought forward loss or loss needs to be carried forward under any income head

ITR-5 :
ITR-5 is applicable for:-

• Parneship firms
• LLPs (Limited Liability Partnership)
• AOPs (Association of Persons)
• BOIs (Body of Individuals)
• Artificial Juridical Person (AJP)
• Estate of deceased, Estate of insolvent
• Business trust and investment fund.

ITR-6 :
For Companies other than companies registered for charitable or religious purpose.

ITR-7 :
The following individuals and associations are eligible to file the ITR-7 form:

• All individuals who obtain income from property if said property is in the name of a trust
• All individuals who receive income for the sole purpose of charity or a religious offering
• Any political party that earns a net income that is more than the ceiling limit that is exempt from income tax
• Associations that carry out scientific research
• News organisations and companies
• Organisations as mentioned in Section 10(23A) and Section 10(23B)
• Educational institutions such as school, colleges or universities
• Medical institutions such as hospitals, clinics etc.

ITR-U (Updated Return) :
Any taxpayer can file an updated return u/s 139 (8A) whether he has furnished/not furnished an original return, revised return, or belated return in case of any omission, error, or wrong statement in his earlier return of income.

Time Limit: Any time within 24 months from end of AY.

Othe following points to be noted Regarding Updated Return:-
• If a person has filed loss return ,he can furnish updated return if such return is return of income.
• If as a result if submitting updated return, the quantum of carried forward loss (or unabsorbed depreciation or MAT/AMT credit) is to be reduced for any subsequent year, then an updated return shall be furnished for each subsequent year.

When updated Return Cannot be submitted?
Othe following points to be noted Regarding Updated Return:-
• If updated return is return of loss
• If updated return decrease total tax liability or increase the refund due
• If search has been initiated u/s 132, survey has been conducted u/s 133A
• Updated return has already been furnished by him u/s 139(8A)
• Any proceeding for Assessment/Reassessment/re-computation/revision of income is pending or has been completed for that AY.
• Any Prosecution proceeding has been initiated for the relevant AY in respect of such person.



Income Tax Slab Rates for FY 2022-23/AY 2023-24

Net Taxable Income	New Tax Regime Income Tax Slab Rates FY 2022-23	Old Tax Regime Income Tax Slab Rates FY 2022-23
Individual Below 60 years, NRIs and HUFs
Upto Rs. 2.5 lakhs	Nil	Nil
Rs. 2,50,001 – Rs.5 lakhs	5%	5%
Rs. 5,00,001 –Rs.7.5 lakhs	10%	20%
Rs. 7,50,001 – Rs.10 lakhs	15%	20%
Rs. 10,00,001 – Rs.12.5 lakhs	20%	30%
Rs. 12,50,001 – Rs.15 lakhs	25%	30%
More than Rs.15 lakhs	30%	30%
Individual 60 years or more but below 80 years
Upto Rs.2.5 lakhs	Nil	Nil
Rs.2,50,001 lakhs to Rs.3 lakhs	5%	Nil
Rs.3,00,001 to Rs.5 lakhs	5%	5%
Rs.5,00,001 to Rs.750,000	10%	20%
Rs. 7,50,001 – Rs.10 lakhs	15%	20%
Rs. 10,00,001 – Rs.12.5 lakhs	20%	30%
Rs. 12,50,001 – Rs.15 lakhs	25%	30%
More than Rs.15 lakhs	30%	30%
Individual 80 years or more
Upto Rs.2.5 lakhs	Nil	Nil
Rs.2,00,001 to Rs.5 lakhs	5%	Nil
Rs.5,00,001 to Rs.7.5 lakhs	10%	20%
Rs.7,50,001 to Rs.10 lakhs	15%	20%
Rs.10,00,001 to Rs.12.5 lakhs	20%	30%
Rs.12,50,001 to Rs.15 lakhs	25%	30%
Above Rs.15 lakhs	30%	30%




Income tax slab rate for Fy 2023-24/ Ay 2024-24

Net Taxable Income	New Tax Regime Income Tax Slab Rates FY 2023-24	Old Tax Regime Income Tax Slab Rates FY 2023-24
Upto Rs. 2.5 lakhs	Nil	Nil
Rs. 2,50,001 – Rs.3 lakhs	Nil	5%
Rs. 3,00,001 –Rs.5 lakhs	5%	5%
Rs. 5,00,001 – Rs.6 lakhs	5%	20%
Rs. 6,00,001 – Rs.9 lakhs	10%	20%
Rs. 9,00,001 – Rs.10 lakhs	15%	20%
Rs.10,00,001 - Rs.12 lakhs	15%	30%
Rs.12,00,001 - Rs.15 lakhs	20%	30%
Above Rs.15 lakhs	30%	30%



What is 26AS?
Form 26AS is a consolidated annual tax statement. It shows the details of TDS, TCS, advance tax. It can be downloaded from Income e-filing portal by using login ID & Password.

What is Form 16?
Form 16 is a certificate (issued under section 203 of the Income Tax deducted at source (TDS) by the employer and submitted by them to the Income Tax Department (IT Department). It provides the details how much tax the employer deducted and when it was submitted to the IT department. This certificate can be downloaded by using deductor Login ID & Password from Traces Portal.

What is Form 16A?
Form 16A is TDS certificate other than for salary, for example for Tds on interest, Tds on Rent etc.

What is the process to file ITR?

• Step 1 - Go to the Income Tax e-filing website(www.efiling.gov.in)
• Step 2 - Register or Login to the website
• Step 3 - Enter the required details
• Step 4 - Select the mode of Filing
• Step 5 - Select the status
• Step 6 - Select the appropriate ITR form (eg. Itr1,2,3,4,5,6,7)
• Step 9 - Summary of tax computation
• Step 10 - Proceed to validation
• Step 11 - Submit the ITR

What is the due date of filing of return of Income u/s 139(1) ie. without paying late fee?
Company

• Liable to Transfer Pricing Report u/s 92E – 30th Nov of AY
• Other Company not liable to Transfer Pricing Report
• 31st October Of AY

Others

• Liable to audit under any law – 31st October of AY
• Where Assesse is a partner in a firm whose accounts are required to be audited to be audited under any law – 31st October of AY
• Others – 31st July of AY

What is the last date up to which return can be revised?
Return filed u/s 139(1)(original return), 139(3)(Loss return), 139(4) (Belated Return) can be revised if discovery any omission or wrong statement in such ROI filed earlier:-
3 month before end of Assessment Year or;
Before completion of assessment whichever is earlier.

What is the penalty for late filing of return of return of income?
If an individual doesn't file the ITR by the deadline it is termed a belated return. If you miss the deadline the belated ITR can be filed up to December 31, 2023. The late filing fee of Rs 5,000 or Rs 1,000 as applicable will be levied on filing the belated ITR and it may also attract interest on the tax amount.