1. What is Income Tax Return (ITR)

The Income Tax Return or ITR is a form in which the taxpayers submit information about their income and tax payments to the income tax department. A taxpayer should file ITR on or before the due date specified. Theron applicable to a taxpayer depends on the type of taxpayer, whether individuals, HUF, company, etc., and you choose the ITR based on the nature and type of income and total income. Every taxpayer should also calculate the tax payable and make payments before filing the ITR. You should file an ITR in case of a carry forward of losses and set off of brought forward losses.
While filing your ITR, you should check the form 26AS or AIS for details of TDS and other income such as FD interest. You should also have your form 16 to enable filling the details of salary and tax saving deduction claims.

2. Types of ITR

The department prescribes seven types of ITR forms based on the type of taxpayer and income:

1. ITR-1 
   ITR-1 for individuals resident in India and with total income up to Rs 50 lakh. An individual having income from salary, house property and other sources can file ITR-1. An NRI cannot file ITR-1. Salaried taxpayers can use their form 16 to file ITR.
2. ITR-2 
   ITR-2 for individuals and HUF for their income other than income from business or profession. Individuals and NRI having income from salary, house property, capital gains and other sources can file ITR-2. Salaried individuals who have gains or losses from buying and selling shares should file ITR-2.
3. ITR-3 
   ITR-3 for individuals to report their income from a business or a profession. Salaried individuals who have income from intraday trading in shares or income from futures and options should file ITR-3. Individuals can report income from salaries, house property, capital gains, business or profession (including presumptive income) and other sources in ITR-3.
4. ITR-4 
   ITR-4 for individuals, HUF and partnership firms for their income under presumptive income of taxation. ITR-4 is for income from a business whose turnover is up to Rs 2 crore and taxed under section 44AD. Also, ITR-4 is for income from a profession whose turnover is up to Rs 50 lakh and taxed under section 44ADA. A freelancer carrying out a notified profession can file ITR-4.
5. ITR-5 
   ITR-5 for partnership firms, LLP, AOP and BOI. Business entities such as LLP, partnership firms, AOP and BOI can file ITR-5 for reporting income from business and profession and any other source of income.
6. ITR-6 
   ITR-6 is the income tax return for companies to file income from business or profession and any other sources of income.
7. ITR-7
   ITR-7 is the income tax return for companies, associations and trusts claiming income tax exemption.

3. How to file ITR

TRAAS WORLD can help to file your ITR for the FY 2023-24 corresponding to the AY 2024-25. The filing should be mandatorily online for all types of taxpayers except super senior citizens aged 80 years and above.

The income you report falls under income from salary, house property, business, or profession, capital gains and income from other sources You calculate the aggregate income and claim tax deductions for tax savings and others. From the income tax payable, you reduce TDS on your income, TCS, advance tax and other tax credits, You can claim a tax refund of excess tax or TDS paid. In a case where you have balance tax payable, you should pay the same before filing the ITR.

4. Types of Forms for ITR e-filing

Form 16: 
Form 16 is a salary TDS certificate an employee receives from the employer. Form 16 provides the details of gross salary, exemptions such as HRA and LTA. The form also contains the details of the net taxable salary, any other income/loss reported by the employee, tax saving deductions and salary TDS.

Form 26AS or AIS:
Form 26AS or AIS contains details of tax deducted at source or TDS on various incomes such as salary, interest and on sale of immovable property. The form also contains details of self-assessment tax, advance tax paid by a taxpayer and specified financial transactions.

Form 15G and Form 15H:
Form 15G and Form 15H enable you to receive income without TDS. You can submit a Form 15G in a case you are below 60 years of age and where your annual taxable income is below the basic exemption limit. You can submit a Form 15H in case where you are a senior citizen and the tax due on your total income is nil. You need to submit the form 15G or form 15H to the person paying you income.

FAQ’s on ITR

• My income is already subject to TDS, do I need to pay further tax while filing ITR?

The TDS on the income may differ from the actual tax liability on the income earned. In general, TDS rates are a fixed percentage of the payments, while your income gets taxed at slab rates. In case the TDS is lower, you may need to pay the balance tax due. In case the TDS is high, you may claim a refund. In any case, while filing your ITR, you should aggregate the annual income from all sources and calculate the tax due/claim refund.

• Are there any interest liabilities on the tax due calculated on my annual income?

In a case where your tax payable before claiming TDS exceeds Rs 10,000, you may have an interest liability The interest liability is 1% per month calculated on the balance tax. You can reduce the interest liability by an early payment of tax dues. You need to pay the balance tax along with any interest dues before filing the ITR.
You can avoid the interest liability by planning your tax payments under ‘advance tax’ within the financial year.

• How can I claim a tax rebate under section 87A on tax and a refund of TDS?

In case your total income after claiming tax deductions and exemptions is up to Rs 5 lakh, you can claim a rebate on the tax payable. The maximum rebate is Rs 12,500. In such a case, you can claim a refund of the TDS paid on your income.

• Should I file an ITR in the case of a loss from business or house property or sale of shares?

Yes, you should file an ITR in case of losses, which may be from business or sale of shares or interest paid on a home loan. An ITR filing helps you to set-off  the loss and also carry forward the loss to the future years. Do note that you should file ITR on or before the due date.

• What is the late fee for filing ITR after the due date?
  Under section 234F, a late file fee is applied if you fail to file your ITR on or before the due dates. This rule has been effective since the year 2017-18. The maximum penalty is Rs. 10,000 if you file your ITR after the due date. But before 31 July, a penalty of Rs 5000 will be levied. Also, for the taxpayer whose total income doesn’t exceed Rs.5 lakh, the maximum penalty of Rs. 1000 will be levied for the delay.
   
• How to check the ITR status?

You can check the status of your ITR and about ITR processing status at https://eportal.incometax.gov.in/iec/foservices/#/pre-login/itrStatus using your PAN and ITR acknowledgement number.

• How can I check the status of IT refund?

You can check your IT refund status at https://tin.tin.nsdl.com/oltas/refund-status-pan.html

• How can I apply for a PAN card?

You can apply for PAN card online. To know the step wise procedure to apply for PAN card, refer Apply For PAN Card Center From TRAAS WORLD.

• Can I get an instant PAN using Aadhaar?

You can get an Instant PAN using Aadhaar through an Aadhaar based OTP received on your mobile number.

• How to link PAN to Aadhaar?

You can link PAN to Aadhaar in a simple two-step procedure and also through your e-filing login on the income tax portal. Or go direct on https://eportal.incometax.gov.in/iec/foservices/#/pre-login/bl-link-aadhaar

                   Income Tax in India

Income Tax Basics in India

Income tax is a type of tax that the central government charges on the income earned during a financial year by the individuals and businesses.Taxes are sources of revenue for the government.Government utilizes this revenue for developing infrastructure, providing healthcare,education,subsidy to the farmer/ agriculture sector and in other government welfare schemes. Taxes are mainly of two types,direct taxes and indirect form of taxes.Tax levied directly on the income earned is called as direct tax,for example Income tax is a direct tax.The tax calculation is based on the income slab rates applicable during that financial year.

Types of Income Tax payers

The Income tax Act has classified the types of taxpayers in categories so as to apply different tax rates for different types of taxpayers.
Taxpayers are categorized as below:

• Individuals, Hindu Undivided Family (HUF), Association of Persons(AOP) and Body of Individuals (BOI)
• Firms
• Companies

Further, Individuals are broadly classified into residents and non-residents.Resident individuals are liable to pay tax on their global income in India i.e. income earned in India and abroad. Whereas, those who qualify as Non-residents need to pay taxes only on income earned or accrued in India.

The residential status has to be determined separately for tax purposes for every financial year on the basis of the individual tenor of stay in India.Resident Individuals are further classified into below mentioned categories for tax purposes-

• Individuals less than 60 years of age
• Individuals aged more than 60 but less than 80 years
• Individuals aged more than 80 years

Types of Income / Heads of Income

Everyone who earns or gets an income in India is subject to income tax.(Yes, be it a resident or a non-resident of India ).For simpler classification, the Income tax department breaks down income into five main heads:

Taxpayers and income tax slabs

Each of these taxpayers is taxed differently under the Indian income tax laws. While firms and Indian companies have a fixed rate of tax calculated on their tax profits, the individual,HUF, AOP and BOI taxpayers are taxed based on the income slab they fall under. People’s incomes are grouped into blocks called tax brackets or tax slabs. And each tax slab has a different tax rate.Rate at which income is charged to tax increases with increase in income. Budget 2020 introduced a ‘New tax regime’ for the Individuals and HUF taxpayers :

What is the Existing / Old tax regime?

The old tax regime provides 3 slab rates for levy of income tax which are 5%, 20% tax rate and 30% for different brackets of income. The individuals have been given the option to continue with this Old tax regime and they can claim deductions of allowances like Leave Travel Concession (LTC), House Rent Allowance (HRA), and certain other allowances. Additionally, deductions for tax saving investments as per section 80C (LIC, PPF ,NPS etc) to 80U can be claimed. Standard deduction of Rs 50,000, deduction for interest paid on home loan.

Tax slab rates applicable for Individual taxpayer below 60 years for Old tax regime is as below: (For Upto AY 2023-24)

There are two other tax slabs for two other age groups: those who are 60 and older and those who are above 80.A word of note: People often misunderstand that if they earn let’s say Rs.12 lakhs, they will be paying a 30% tax on Rs.12 lakhs i.e Rs.3,60,000. That’s incorrect. A person earning 12 lakhs in the progressive tax system, will pay Rs.1,12,500+ Rs.60,000 = Rs. 1,72,500. Check out the income tax slabs for previous years and other age brackets.

Income Tax Slabs under new tax regime- (For Upto AY 2023-24)

From the FY 2020-21, a new tax regime is available for individuals and HUFs with lower tax rates and zero deductions/exemptions. Individuals and HUF have the option to choose the new regime or continue with the old regime.The new tax regime is optional and the choice should be made at the time of filing the ITR. If the old regime is continued than all the deductions/exemptions as available can be availed by the taxpayer. The income tax slabs under the new tax regime are:

Most of the deductions like deductions and exemptions are not allowed if the taxpayers opts for the New Tax regime. However he exemptions and deductions available under the new regime are:

• Transport allowances in case of a specially-abled person.
• Conveyance allowance received to meet the conveyance expenditure incurred as part of the employment.
• Any compensation received to meet the cost of travel on tour or transfer.
• Daily allowance received to meet the ordinary regular charges or expenditure you incur on account of absence from his regular place of duty.

Exceptions to the Tax Slab

One must bear in mind that not all income can be taxed on slab basis. Capital gains income is an exception to this rule. Capital gains are taxed depending on the asset you own and how long you’ve had it. The holding period would determine if an asset is long term or short term. The holding period to determine nature of asset also differs for different assets. A quick glance of holding periods, nature of asset and the rate of tax for each of them is given below.

Residents and non residents:

Levy of income tax in India is dependent on the residential status of a taxpayer. Individuals who qualify as a resident in India must pay tax on their global income in India i.e. income earned in India and abroad. Whereas, those who qualify as Non-residents need to pay taxes only on their Indian income. The residential status has to be determined separately for every financial year for which income and taxes are computed.
 

AY 2024-25 (FY 2023-24) Income Tax Slab

Income Tax – FAQs

• When it is mandatory to file return of income ?
  It is mandatory to file return of income for a company and a firm. However, individuals, HUF, AOP, BOI are mandatorily required to file return of income if the income exceed basis exemption limit of Rs 2.5 lakhs. This limit is different for senior citizens and super senior citizens.
• Can i file return of income even if my income is below taxable limits ?
  Yes, you can file return of income voluntarily even if your income is less than basic exemption limit
• What documents are to be enclosed along the return of income?
  There is no need to enclose any documents with the return of income. However, one should retain the documents to produce before any competent authority as and when required in future.
• Should I disclose all my income in the return even if it is exempt?
  Yes. Income from every source including exempt income must be disclosed. The same can be shown under the Schedule EI.