Income Tax Return in India

Income Tax Return in India

An Income Tax Return (ITR) is a form a person should submit to the Income Tax Department. It contains information about the person’s income and the taxes to be paid during the year. If the return shows that excess tax has been paid during the year, the taxpayer will be eligible for a refund.

Government imposes a tax on taxable income on all individuals, Hindu Undivided Families (HUF), companies, firms, LLPs, the body of persons, local authority, an association of persons, and any other artificial judicial persons.

As per Income tax laws, every eligible person must file a return yearly that earns any income during a financial year. Income could be in the form of a salary, income from house property, business profits, or earned through dividends, capital gains, interest, or other sources. Tax returns should be filed within a specified date. If taxpayers fail to abide by the time limit, they must pay the penalty.

Is It Mandatory To File Income Tax Return?

Yes, as per the Income Tax laws in India, filing the return is mandatory, and the income is above the basic exemption limit. Income tax slabs are pre-determined by the government. Delays in filing returns can attract a penalty.

Who Should File Income Tax Returns?

Who Should File Income Tax Returns?

According to Income Tax Act, Income Tax is to be paid by Individuals, companies, associations or persons, etc., who fall within certain income brackets. Mentioned below are the entities and organizations that are required to file the ITRs:

Every individual, up to the age of 59, whose total income for a financial year exceeds Rs. 2.5 lakhs

For every Senior citizen between the age of 60 and 80, their tax exemption limit increases to Rs. 3 lakhs.

For every Super Senior Citizen aged 80 and above, their tax exemption limit increases to Rs. 5 lakhs.

Note:

It is important to note the income should be calculated before allowing any deduction under Section 80C to 80U and other exemptions under section 10.

All companies generate income, irrespective of whether they’ve made any profit or not throughout the year.

Those who want to claim a refund on the excess tax deducted

Individuals who have assets that are located outside India

Foreign Companies

NRIs who earn more than Rs. 2.5 lakh in India in a particular financial year

TAX RATES

Individual or HUF opting for Normal Tax Regime


Individuals
(Other than senior and super senior citizen)
Net-Income Range Rate of Income Tax
Assessment Year 2022-23
Up to Rs. 2.5 lakhs -
Rs. 2.5 lakhs to Rs. 5 lakhs 5%
Rs. 5 lakhs to Rs. 10 lakhs 20%
Above Rs. 10 lakhs 30%
Senior Citizen(Who is 60 years or more but less than 80 years at any time during previous year)
Net-Income Range Rate of Income Tax
Assessment Year 2022-23
Up to Rs. 3 lakhs -
Rs. 3 lakhs to Rs. 5 lakhs 5%
Rs. 5 lakhs to Rs. 10 lakhs 20%
Above Rs. 10 lakhs 30%
Super Senior Citizen
(who is 80 years or more at any time during previous year)
Net-Income Range Rate of Income Tax
Assessment Year 2022-23
Up to Rs. 5 lakhs -
Rs. 5 lakhs to Rs. 10 lakhs 20%
Above Rs. 10 lakhs 30%
Hindu Undivided Family (HUF)
Net-Income Range Rate of Income Tax
Assessment Year 2022-23
Up to Rs. 2.5 lakhs -
Rs. 2.5 lakhs to Rs. 5 lakhs 5%
Rs. 5 lakhs to Rs. 10 lakhs 20%
Above Rs. 10 lakhs 30%

Individuals or HUF opting for Alternate Tax Regime

Net-Income Range Rate of Income Tax
Assessment Year 2022-23
Up to Rs. 2.5 lakhs -
Rs. 2.5 lakhs to Rs. 5 lakhs 5%
Rs. 5 lakhs to Rs. 7.5 lakhs 10%
Rs. 7.5 lakhs to Rs. 10 lakhs 15%
Rs. 10 lakhs to Rs. 12.5 lakhs 20%
Rs. 12.5 lakhs to Rs. 15 lakhs 25%
Above Rs. 15 lakhs 30%

Note:

Rebate under section 87A is available to resident individuals whose total income does not exceed Rs. 5 lakhs during the previous year.

Rebate is available to the extent of Rs. 12,500 and no rebate will be available if total income exceeds Rs 5 lakhs.

Tax Rates for AOP/BOI

Net-Income Range Rate of Income Tax
Assessment Year 2022-23
Up to Rs. 2.5 lakhs -
Rs. 2.5 lakhs to Rs. 5 lakhs 5%
Rs. 5 lakhs to Rs. 10 lakhs 20%
Above Rs. 10 lakhs 30%

Tax Rates for Company

Particulars Rate of Income Tax
Assessment Year 2022-23
Domestic Company opting for Section 115BAB
Income from manufacture or production of article or thing 15%
Income from non-manufacturing activities (if no specific rate is prescribed) 22%
Short term capital gains (from transfer of depreciable assets) 15%
Short term capital gains (from transfer of non-depreciable assets) 22%
Excess profit added by the Assessing officer under section 115BAB (6) owning to close connection between company and other person 30%
Other Domestic Company
Total turnover/gross receipt during the previous year 2019-20 does not exceed Rs. 400 crores 25%
Total turnover/gross receipt during the previous year 2020-21 does not exceed Rs. 400 crores NA
Company opted for Section 115BA 25%
Company opted for Section 115BAA 22%
Any other domestic company 30%
Foreign Company
In General 40%

Tax Rates for Cooperative Society

Net-Income Range Rate of Income Tax
Assessment Year 2022-23
Opting for section 115BAD 22%
Other Co-operative Society
Upto Rs. 10,000 10%
Rs. 10,001 to Rs. 20,000 20%
Above Rs. 20,000 30%

Particulars Rate of Income Tax
Assessment Year 2022-23
Firms 30%
Local Authority 30%

Local Authority

A. Rate of Surcharge in the hands of the Individual, HUF, AOP (Except AOP with all members as company) , BOI or AJP

Benefits of Filing Income Tax Return

Benefits of Filing Income Tax Return

Due Date Of Income Tax Return Filing

Class of assessee

Interest and Penalty for delay in filing returns

Interest Taxpayers who do not file return within the due date – 1% per month or part of a month on the tax amount that is unpaid
Penalty When total income exceeds INR 5 lakhs – Rs. 5000 Any other case – Rs. 1000

Frequently Asked Questions

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Self-assessment tax is a tax an individual must pay before making his tax return. Self-assessment tax is calculated by taking into consideration TDS and tax on advance.

To file an income tax return, a person must calculate net tax-deductible income, fill out the ITR form in the manner required, and pay tax if applicable. When all tax obligations are paid, and the ITR is submitted to the new income tax portal, ensure the ITR submitted is confirmed. After you have verified the ITR, it will be submitted to the department of taxation. Pick the ITR for processing. When the ITR is approved, an intimation notice will be sent to your registered email informing you of whether your tax calculations align with the taxes department's calculation. If they do, the ITR filing for a specific financial year has been completed. If it isn't the tax year, you either have the tax refund due for income or have an income tax refund in the process of being paid. If a tax refund for income has been owed to you, you will receive it in the bank account of your choice if it's valid on the latest income tax portal. If the tax refund is in the process, the IRS will require you to pay with interest, if applicable.

To determine the tax on income the individual must pay, it is necessary to determine the total tax-payable income. The taxable income total will be split into five different categories.

  • Salary income
  • The income from the house
  • Capital gains from capital gains
  • The income earned from business or profession
  • Other sources of income

The new tax portal for income has pre-filled ITR. But, the pre-filled ITR may contain errors. Therefore, it is essential to cross-check the details. You must collect the below documents to check the information:) TDS certificates (Form 16 or Form 16A) as well as B) Certificates of interest (savings accounts Fixed deposits, fixed deposits, etc. ), Repayment certificates (if you have a home loan education loan) Form 26AS an annual statement of information (AIS), Aadhaar number as well as bank accounts.

An individual does have the option to rectify errors made while filing of ITR. To rectify the errors made, the taxpayer must submit ITR once more following section 139(5) in the Income-tax Act of 1961, with the correct information. The deadline for filing the revised ITR is December 31st unless the government.