August is coming to an end. If you haven’t filed your income tax yet, you need to step up because the due date is nearing. Thanks to the finance ministry for extending the due date to 31st august.
Filing of income tax returns can be a toilsome task but actually it is a rather very simple process.
Here are 3 points to help you understand what is income tax return and how to file it without any errors.
Why to file income tax returns
Filing tax returns is an annual activity seen as a moral and social duty of every responsible citizen of the country. It is the basis for the government to determine the amount and means of expenditure of the citizens and provides a platform for the assessee to claim refund, among other forms of relief from time to time.
The government mandates that individuals who earn a specified amount of annual income must file a tax return within a pre-determined due date. The tax as calculated must be paid by the individual. Failure to pay tax will invite penalties from the Income Tax Department.
Know your slab rate
Different income groups are taxed under different slabs. For instance, a person earning up to Rs 2,50,000 does not require filing tax returns.Those earning anything between Rs 2,50,001 and Rs 5,00,000 fall under the 5 per cent category while people earning over Rs 5,00,000 to Rs 10,00,000 fall under the 20 per cent tax bracket.
Anything income above Rs 10 lakh will be taxed at 30 per cent. However, individuals earning between Rs 50,00,001 and Rs 1 crore are required to pay an additional 10 per cent surcharge. For people earning more than Rs 1 crore but less than Rs 2 crore will have to pay a 15 per cent surcharge besides the 30 per cent base tax. Anyone earning between Rs 2 crore and less than Rs 5 crore will have to pay a 25 per cent surcharge and those with incomes exceeding Rs 5 crore have to pay a mammoth surcharge of 37 per cent. A 4 per cent additional cess also applies to all income groups except for those earning up to Rs 2.5 lakh. It should also be noted that a full rebate of Rs 12,500 can be claimed by individuals whose net taxable income does not exceed Rs 5 lakh.
| Income |
|Tax rate applicable|
|Up to ₹ 2,50,000||NIL|
|₹ 2,50,001 to ₹ 5,00,000||5% on income exceeding Rs. 2.5 lakh (max. Rs. 12,500)|
|₹ 5,00,001 to ₹ 10,00,000||20% on income exceeding Rs. 5 lakh (max. Rs. 1 lakh) + Rs. 12,500|
|Over ₹ 10,00,000||30% on income exceeding Rs. 10 lakh + Rs. 1 lakh + Rs. 12,500|
Meanwhile, for senior citizens above 60 years of age, the income tax exemption threshold is Rs 3,00,000. Income between Rs 3,00,001 and Rs 5,00,000 attracts a 5 per cent tax rate, while those with income above Rs 5,00,000 and below Rs 1,00,00,00 have to pay 20 per cent income tax. Those earning over Rs 10,00,000 will attract income tax of 30 per cent.
|Income Threshold||Tax rate applicable|
|Up to ₹ 3,00,000||Nil|
|₹ 3,00,001 to ₹ 5,00,000||5% on income exceeding Rs. 3 lakh (max. Rs. 10,000)|
|₹ 5,00,001 to ₹ 10,00,000||20% on income exceeding Rs. 5 lakh (max. Rs. 1 lakh) + Rs. 10,000|
|Over ₹ 10,00,000||30% on income exceeding Rs. 10 lakh + Rs. 1 lakh + Rs. 10,000|
For very senior citizens above 80 years, the income tax exemption limit is Rs 5,00,000. Those with income between Rs 5,00,001 and Rs 10,00,000 have to pay 20 per cent tax while those earning above Rs 10,00,000 have to pay a 30 per cent tax.
|Income Threshold||Tax rate applicable|
|Up to ₹ 5,00,000||No tax|
|₹ 5,00,001 to ₹ 10,00,000||20% on income exceeding Rs. 5 lakh (max. Rs. 1 lakh)|
|Over ₹ 10,00,000|| 30% on income exceeding Rs. 10 lakh + |
Rs. 1 lakh
FILE ITR ONLINE
In this modern era with everything getting digitalised life has become so easy and comfortable. So is filing your ITR.
Filing ITR offline is a cumbersome process when compared to online process. Offline filing requires pinpoint accuracy. Moreover when you are filing ITR online you will get instant acknowledgement from the tax department also ensuring your privacy. Therefore filing online is the best way to file your return at one shot.
Filing ITR online is not that complex.
You need to first create an e-filing account on the Income Tax website (https://www.incometaxindiaefiling.gov.in/home) and get yourself registered.
Once you have completed the process, you will get an activation link sent to your e-mail ID.
Once the process is complete, download the Form 26AS and Form 16. Form 26AS is a consolidated tax statement which provides an overall view of income tax deducted in a particular financial year.
From Current year, there is a very easy option specifically available for simple return filing assesses, which is e-FILING LITE.
Assessees with simple filing details can use this option. It is designed in a way that immediately after entering your pan all the details will be auto filled. Thus ensuring a very peaceful ITR filing.
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