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Demystifying Income Tax and Income Tax Returns (ITR) in India: A Thorough Guide

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Demystifying Income Tax and Income Tax Returns (ITR) in India: A Thorough Guide

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.

Understanding Income Tax: 

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.

Income Tax Act of 1961:

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).

Core Concept Income Tax Filing:

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%

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%

Determining Taxable Income Through Income Tax Calculator:

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.

  • Visit the Income Tax Department of India's official website at www.incometaxindia.gov.in.
  • On the website, look for the "Calculators" or "Income Tax Calculator" section.
  • Input the required information into the calculator, such as your age, domicile status, income sources, deductions, and exemptions. 
  • The calculator will determine the applicable tax slabs, deductions, exemptions, and tax rates.
  • After entering all the necessary information, select the "Calculate" or "Calculate Tax" button to estimate your income tax liability.

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.

Pay Income Tax Online

Paying income tax is very easy. You can use the government portal to pay off your tax liabilities in simple steps.

  • Log in to https://www.protean-tinpan.com/ > Services > e-payment to pay taxes online. Pay taxes online or click on the "e-pay taxes" tab on the aforementioned website. 
  • Select the applicable challan, i.e. ITNS 280, ITNS 281, ITNS 282, ITNS 283, ITNS 284, or Form 26 QB demand payment (only for TDS on sale of property), depending on the situation.
  • Enter PAN / TAN (as applicable) and other mandatory challan details such as the accounting head under which payment is made, the tax payer's address, and the bank through which payment is to be made, etc.
  • Upon data submission, a confirmation screen will be displayed. If PAN / TAN is valid according to the ITD PAN / TAN master, then the taxpayer's full name will be displayed on the confirmation screen.
  • Upon confirmation of the entered information, the taxpayer will be directed to the bank's net-banking website.
  • Taxpayers can make payments using authorized bank’s debit card, internet banking and through payment gateway using debit or credit card.
  • The taxpayer must input payment information on the bank's website using the user id and password provided by the bank for net-banking purposes.
  • On successful payment, a challan counterfoil containing the CIN, payment details, and bank name through which the e-payment was made will be displayed. 

File Income Tax Return online 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.

Income Tax Refund:

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

How to become an income tax officer?

After clearing SSC CGL exam one can become income tax inspectors. SSC CGL test processes to become an income tax officer.

What are the income tax slabs for senior citizens?

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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