Income tax is a type of tax charge by the government on the basic income earn by an individual or business during a financial year. It is a source of revenue for the government. The funds collect from this are use for public services, pay government obligations and provide goods and services for citizens. Income Tax Return is a form which contains information about the individual’s income and the taxes to be paid on it in a year.
Table of Contents
Types of Tax ?
Two types of Tax is there :
- Direct Tax
- Indirect Tax
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Direct Tax |
Indirect Tax |
| Direct tax is a type of tax in which the government directly imposes tax on the income of an individual or an organization. |
Indirect tax is a type of tax in which tax is collected when the customer purchases a product. The tax is already included in the product’s price.
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Types of Taxpayers ?
- Individual
- Firms
- Company
However, individuals are divided into two categories. First one is Resident individuals who have to pay tax on the basis of global income .i.e, income earned in India as well as Abroad. Second one is Non-resident individuals who have to pay the tax on the income that they earned in India only.
What are the Important Factors to be considered before Filling Income Tax Return :
- Choose the correct ITR form.
- Choose a new tax regime or old tax regime according to your benefits.
- Pre Filled ITR forms.
- Verify the pre-paid taxes with Form 26AS.
- Payment of balance taxes.
- Consequences of non-filing of ITR by due date.
- Change of employment during the year.
- Reporting Exempt income.
- Various disclosure requirements.
Income tax slabs
Firms and companies have a fixed rate of tax but individuals’ tax based on the income slab they come under.
Old tax regime :
| Income | Tax Slab |
| 0 to 2.5 lakhs. | no tax need to be paid. |
| 2.5 lakhs to 5 lakhs | 5% of taxable income. |
| 5 lakhs to 10 lakhs | 12,500 + 10% of the income exceeding 5 lakhs. |
| Above 10 lakhs | 1,12,500 + 30% of the income exceeding 10 lakhs. |
New tax regime :
| Income | Tax Slab |
| 0 to 2.5 lakhs | no tax need to be paid. |
| 2.5 lakhs to 5 lakhs | 5% of taxable income. |
| 5 lakhs to 7.5 lakhs | 12,500 + 10% of the income exceeding 5 lakhs. |
| 7.5 lakhs to 10 lakhs | 75,000 + 20% of the income exceeding 10 lakhs. |
| 10 lakhs to 12.5 lakhs | 75,000 + 20% of the income exceeding 10 lakhs. |
| 12.5 lakhs to 15 lakhs | 1,25,000 + 25% of the income exceeding 12.5 lakhs. |
| Above 15 lakhs | 1,87,500 + 30% of the income exceeding 15 lakhs. |
Documents required :
It is better to gather all the documents before Filing Income Tax Return form.
- Bank and post office saving account passbook
- Salary slips
- Aadhar card
- PAN card
- PPF account passbook
- Form 16
- Form-16A
- Form-16B
- Form-16C
- Form-26AS
- Tax investment proofs.
How to File Income Tax Return?
Filling ITR is a longer procedure. There are so many steps to File ITR .
1 : Log on to the portal of the income tax department (https://www.incometax.gov.in/iec/foportal/) for filing returns online. Register through the PAN Card and it will serve as a user ID.
2 : Download the appropriate ITR Form.
3 : Enter the correct details in Form 16.
4 : Calculate all relevant tax details.
5 : Confirm the above details and then submit return it.
6 : Sign digitally. (If you don’t have a digital signature, you can skip this step).
7 : Confirmation message will pop on your screen.
8 : e-verify the return through any one of these modes : Netbanking, Aadhaar otp, Bank ATM, Bank Account Number, Demat Account Number, Registered mobile number and email id.
