Income Tax – Income Tax Returns, e-filing, Tax Slab for FY 2019-20

How to file ITR

With the due date for ITR filing just round the corner, here is all you need to know about how to file ITR online. Before you file your taxes, you’ll need your Form 16, provided by your employer, and any proof of investment. Using that you simply can compute the tax payable and refunds, if any, for the year. You can download the Income Tax preparation software from the IT department’s site. Once you have all the documents ready, you can start the filing process.

efiling Income Tax

e-Filing Direct Tax Return, TDS return, AIR return and Wealth income tax return online through this link e-filing your return has obvious advantages just like the incontrovertible fact that you won’t need to affect the effort of paperwork and waste time sorting through it all. You can simply go online to the secure website and e-file your return.

This government site also has provisions for you to submit returns, view forms 27AS, e-pay your tax, online application tools for PAN and TAN, outstanding tax demand, CPC refund status, rectification status, ITR – V receipt status, and even features a tax calculator.

Income Tax

Income tax is defined as the tax charged on the annual income earned by a person. The amount of tax applicable to you will depend on how much money you earn as income over the course of a financial year. Taxpayers can make their tax payment, TDS/TCS payment, and Non-TDS/TCS payments online also . All relevant details must be filled by taxpayers in order to make these payments. The process to make the payments online is simple and can be completed quickly.

Income tax for FY 2019-20 is applicable to all or any residents whose annual income exceeds Rs.2.5 lakh p.a. The highest amount of tax a private could pay is 30% of their income plus cess at 4% if their income is quite Rs.10 lakh p.a.

Income Tax Department

A agency that undertakes the direct collection of tax in India is that the tax Department. All operations of the department are handled by the Central Board for Direct Taxes (CBDT). Individuals can get various details like international taxation, tax laws and rules, organisational setup, etc., on the official website of the department.

Income Tax Act

Passed in 1961, the IT Act of India handles all direct tax provisions as well as any tax deductions that may be applicable. Since its introduction, there have been many changes to the law because of economic situations and inflation.

Income Tax Rules

The legislature enacts the tax Act, 1961, to administer and govern tax within the country, but the tax Rules, 1962, were created so as to assist in the application and enforcement of the law constituted in the Act. Moreover, the tax Rules can only be read in conjunction with the tax Act. The tax Rules are within the framework of the tax Act aren’t allowed to override its provisions.

Who should pay Income Tax in India?

The amount of tax that has to be paid depends on the individual’s age and therefore the income they create . The entities listed below?are required to pay tax and file their tax returns.

  • Artificial Judicial Persons
  • Corporate firms
  • Association of Persons (AOPs)
  • Hindu Undivided Families (HUFs)
  • Companies
  • Local Authorities
  • Body of Individuals (BOIs)

Important Dates to Remember when Paying Income Tax

The important dates to recognize for people who fall into the bracket to pay tax for the year (FY 2019-20 & AY 2020-21) is mentioned within the table below:

Important Due Dates The task that must be completed
Before January 31 People must have to submit their proof of investment
Before March 31 It is deadline before which any investments under Section 80D of the Income Tax Act, 1951 must be made
Before 31 October Due date to file income tax return
Between October and November Income Tax returns must be verified by this time

Income Tax Collection

Taxes are collected by the govt in three primary ways:

  1. Voluntary payment by taxpayers into designated banks, like self-assessment tax & advance tax.
  2. TDS (Taxes Deducted at Source) which is deducted from your monthly salary, before you receive it.
  3. TCS (Taxes Collected at Source).

Under the Department of Income of the Ministry of Finance, the income tax Department (IT Department) is liable for monitoring to save of the tax , Expenditure Tax, and various other Financial Acts that are passed every year in the Union Budget. The (CBDT) i.e. Central Board of Direct Taxes regulates the policy and planning of taxes. CBDT is also responsible for administering the direct tax laws through the IT Department. In addition to the gathering of taxes, the IT department is additionally involved in prevention and detection of minimization.

Income Tax Calculator

Income tax calculation are often done either manually or by using a web tax calculator. The income tax rate applicable to you will depend on the tax slab under which you fall. For salaried employees, income from salary includes the basic pay plus House Rent Allowance (HRA) plus Transport Allowance plus Special Allowance plus any other allowance. However, certain components of your salary are tax exempt, like Leave allowance (LTA), reimbursement of telephone bills, etc. In case HRA is a component of your salary and you reside during a rented?house,?you are eligible to say exemption on the HRA. Apart from these exemptions, there is a standard deduction of up to Rs.50,000.

Online Income Tax Payment

Taxpayers pays direct taxes online by using the e-Payment facility. In order to avail the online tax payment facility, taxpayers must have a net-banking account with an authorised bank. The Permanent Account Number (PAN) or tax write-off and Collection Number (TAN) will need to be provided for validation also.

Income Tax Slabs for FY 2019-20

The income earned by people will determine the income tax slabs under which they fall. The lower the income, the lower the liabilities , and people who earn but Rs.2.5 lakh p.a. are exempt from tax.

Depending on the age of the person, the three categories that resident individual taxpayers are divided into are mentioned below:

  • Individuals who are less than the age of 60 years old.
  • Senior citizens who are above 60 years old and below 80 years of age.
  • Super senior citizens who are above 80 years old.

Here is that the tax slab for those people who are less than 60 years old:

Income Tax Slab Tax Rate
Up to Rs.2.5 lakh Nil
Rs.2.5 lakh to Rs.5 lakh 5% of the amount exceeding Rs.2.5 lakh
Rs.5 lakh to Rs.10 lakh Rs.12,500 + 20% of the amount exceeding Rs.5 lakh
More than Rs.10 lakh Rs.1,12,500 + 30% of the amount exceeding Rs.10 lakh

*An additional cess of 5% will be applicable to the tax amount calculated above.

Income tax is merely of the direct means of taxation like capital gains tax, securities transaction tax, etc., and there are many other indirect taxes that we pay like sales tax, VAT, Octroi, service tax, etc.

The direct tax you pay monthly or upon every contractual earning is what forms an outsized a part of the revenue for the govt of India. These revenue functions are managed by the Ministry of Finance, which has delegated the responsibility to managing direct taxes (like direct tax, wealth tax, etc.) to the Central Board of Direct Taxes (CBDT).

ITR Forms

If an individual needs to claim income tax refund, he/she will need to first file his/her income tax return. Depending on the income assessment group, the individual will have to submit one among the ITR forms listed below:

ITR Form Name Description
ITR-1 For specific person having Income from Rent or Salaries, One house property, Other sources (Interest etc.)
ITR-2 For specific person and HUFs not having Income from Business or Profession
ITR-2A For specific person and HUFs not having Income from Business or Profession and Capital Gains and who do not hold foreign assets
ITR-3 For specific person/HUFs being partners in firms and not carrying out business or profession under any proprietorship
ITR-4 For specific person and HUFs having income from a proprietary business or profession
ITR-4S Presumptive business direct tax return
ITR-5 For persons other than, – (i) HUF, (ii) company, (iii) individual filing and (iv) person Form ITR-7
ITR-6 For Companies other than companies claiming exemption under section 13
ITR-7 For persons including orgaizations required to furnish return under sections 140(5A) or 140(5B) or 140(5C) or 140(5D) or 140(5E) or 140(5F)
ITR-V The acknowledgment file of filing a income tax return

In order to file the ITR, a person would require producing the statement , Form 16, and a duplicate of previous years’ return. The individual will got to visit the tax Department’s website – to register and file the returns.

Income Tax Refund

In case you have to paid more tax than your actual liabilities , you’ll be eligible to say an tax refund of the additional money you’ve got paid. For example, if your TDS liability for FY 2018-19 was Rs.35,000 and your employer deducted Rs.40,000 instead, you can claim a refund for the additional Rs.5,000 that was deducted. You can also claim an tax refund just in case you forgot to declare your tax-saving investments and tax has been charged to you without taking your deductions into consideration. Individuals can check the status of the refund on the official website of tax Department

Income Tax Saving Investments

Declaring investments – From HRA, life assurance Premiums, National Savings Certificate, Leave allowance to Fixed Deposit (minimum of 5 years), ELSS Tax Saving Mutual Funds, and more, by ensuring that you have declared all of your investments, you’ll achieve more deductions on tax. The following options are often considering for saving on income tax:

  1. Investment options
    • Mutual funds such as Equity Linked Savings Schemes (ELSS) can request for tax deduction under Section 80D. Compare to fixed deposits and PPF’s, the ELSS offers shorter lock-in period and more benefits when it involves making money.
    • Unit Linked Insurance Plans (ULIP) are insurance schemes that are linked to the market. The investment made under Unit Linked Insurance Plans qualifies for tax deductions.
  2. Insurance
    • Life insurance and insurance – the cash paid towards life assurance and insurance policies are considering for tax deductions under Section 80C
  3. Loans
    • When we take a loan for purchasing a house or for renovation purpose, we are eligible for tax deductions up to Rs.1.5 lakh for a fiscal year.

You can also consider the subsequent options for reducing tax amount on your income:

  • Fixed Deposits (FD) – An FD with a lock-in period of 5 years can assist you save on tax while earning the interest on the deposited amount.
  • National Saving Certificate (NSC) – The NSC offers a secure and reliable method of investing money. You can deposit as low as Rs.200 for a 10-15 year lock-in period. The investments made under National Saving Certificate are eligible for tax deductions.
  • Provident Fund (PF) – you’ll also prefer to invest more amount towards your PF account which will assist you reduce your taxable amount.

Advance Tax

The calculation of liabilities before-hand and paying the taxes to the govt accordingly is named advance tax. There are certain deadlines for the advance payments of tax returns. These deadlines are listed below:

Due Date Advance Tax Payable
On or before 20th June 20% of advance tax
On or before 20th September 50% of advance tax
On or before 20th December 80% of advance tax
On or before 20th March 100% of advance tax

Calculation of advance tax:

  • Step – 1: A private are going to be required to seek out his/her estimated total income by checking out the sum of all the invoices which are received along side the future payments which he/she are going to be receiving till the top of the fiscal year , i.e. 31 March.
  • Step – 2: The direct expenses associated with the business and therefore the investments under Section 80C are to be deducted from the estimated total income to derive the entire taxable income.
  • Step – 3: subsequent step is to work out the entire liabilities for the fiscal year .
  • Step – 4: The TDS or tax deducted at source should be deducted from the entire liabilities .
  • Step – 5: In case the amount of tax liability after deducting the TDS is more than Rs.10,000, the individual will be required to pay advance taxes on the basis on or before the due dates which are mentioned above.

Income Tax deductions

Deductions for your taxable amount are available under various sections of the tax Act, 1961. Deductions will need to be mentioned within the relevant ITR form at the time of e-filing tax returns.

Section 80C:

Deductions under this section are only available to any people and HUF. This section allows surely investments like NSC, etc. and expenditures to be exempt from taxation up to the quantity of Rs.1.5 lakh

Section 80CCC:

Deductions under this section are on payments made to LIC or the other approved insurance firm under an approved pension account . The pension policy must be up to Rs.1,50,000 and be taken for the people himself out of the taxable income.

Section 80CCD:

Deductions under this section are for contributions to the New Pension Scheme by the assessee and therefore the employer. The deduction is adequate to the contribution, not exceeding 10% of his salary.

The total deduction available under Section 80C, 80CCC and 80CCD is Rs.1.5 lakh. However, contributions to the Notified Pension Scheme under Section 80CCD aren’t considered within the Rs.1.5 lakh limit.

Section 80D:

This is the section that deals with income tax deductions on health insurance premiums paid. In the case of people , the policy are often taken to hide himself, spouse, dependent children – for up to Rs.15,000 and fogeys (whether dependent or not) – for up to Rs.15,000. An additional deduction of Rs.5,000 may be a pplicable if the insured is a oldster . In the case of HUF, any member are often insured, and therefore the general deduction are going to be for up to Rs.15,000 and a further deduction of Rs.5,000.

A total of Rs.2.0 lakh can be claimed as deductions whether the assessee is an individual or a HUF.

Section 80DDB:

This section is for deductions on medical expenses that arise for treatment of a disease or ailment as specified in the rules (11DD) for the assessee, a family member or any member of a HUF.

Section 80E:

This section deals with the deductions that are applicable on the interest paid on education loans for an education in India.

Section 80EE:

This section deals with direct tax savings applicable to 1st time home-owners. Applies for people whose first home purchased features a value but Rs.40 lakh and therefore the loan taken that is Rs.25 lakh or less.

Section 80RRB:

Deductions with reference to income by way of royalties or patents are often claimed under this section. Income tax are often saved on an amount up to Rs.3.0 lakh for patents registered under the Patents Act, 1970.

Section 80TTA:

This section deals with the direct tax savings that are applicable on interest earned in post office, co-operative societies or Saving Bank Accounts. Individuals and HUFs can claim a deduction on an interest income of up to Rs.20,000.

Section 80U:

This section deals with the flat deduction on tax that applies to disabled people, once they produce their disability certificate. Up to Rs.1.0 lakh are often non-taxed, counting on the severity of the incapacity .

Section 24:

This section deals with the interest paid on housing loans that’s exempt from taxation. An amount of up to Rs.2.0 lakh can be claimed as deductions per year, and is in addition to the deductions under Sections 80C, 80CCF and 80D. This is only for self-occupied properties. Properties that are rented out, 30% of rent received and municipal taxes paid are eligible for tax exemption.

Frequently Asked Questions – Income Tax

Who is required to pay income tax?

Any individual or artificial body or group of people that earns quite the essential exemption limit are expected to pay tax . Under the tax Act, the persons susceptible to pay tax include individuals, Association of Persons, Hindu Undivided Families, Body of people , companies, artificial judicial persons, firms and local authorities.

Where should I invest to save income tax?

There are various instruments during which you’ll invest to save lots of tax. Some of the most common options available to you include PPF, National Savings Certificate, National Pension System, ELSS schemes, etc.

Is the maturity for filing tax returns an equivalent for all taxpayers?

All individuals and assessees who do not require their accounts to be audited will have to file their income tax returns by July 31. However, companies, individuals and dealing partners of firms whose accounts must be audited are required to file their tax returns by September 30. Assessees who are required to submit a report under Section 92E of the Income Tax Act must file their returns by November 30.

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