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Overview of Filing Income Tax Return 2023-24

For income made in Financial Year 2022-23, the last date to file an ITR (Income Tax Return) will be 31st July. The new Assessment Year 2023-24 already started on April 1. Generally, the due date of filing Income Tax Return is July 31. It is expected that the same date will be the last date for filing tax returns this year. Earlier, the Government has extended the due dates of filing Income Tax Return for various reasons. However, this year it is expected that there will not be any further extension, because CBDT (Central Board of Direct Taxes) has notified the new ITR forms for AY 2023-24 more than a month in advance.

Benefits of Paying Income Tax

  • Every responsible citizen of the nation is obligated to submit their taxes on a yearly basis as a matter of moral and social obligation. It provides a foundation for the government to evaluate how much the people are spending, as well as a platform for the assesse to regularly seek refunds and other sorts of relief.
  • Paying taxes demonstrates responsibility. In addition, since the tax department keeps a record of an individual or company's income as well as the payment of any taxes that may be owed, it is much simpler for that person or company to perform any future transactions.
  • You should still strongly consider submitting tax returns voluntarily, even if your income is below the threshold at which you are required to do so. For registering real estate, the majority of states need verification in the form of tax returns from the three years prior. When refunds are handed in, it becomes much simpler to record the transaction that took place.
  • You should have a consistent tax filing history if you wish to be approved for a mortgage loan in the future. If you wish to be considered for a loan as a co-borrower, you may even be required to provide the tax returns of your spouse. Before providing a card, even credit card issuers may need evidence of return.
  • Before doing business with you, a financial institution may want to see your federal and state tax returns from the past several years. In fact, the government may make it essential for them to do so, which will indirectly force taxpayers to submit frequent tax returns even if they choose to do so voluntarily. You are required to submit a return even if you just want to make an adjustment for losses that occurred in the past.
  • There are still a number of benefits to paying your taxes on time, regardless of whether or not your income is over the level required to file. Losses, both speculative and non-speculative, short-term and long-term capital losses, as well as other types of losses, that are not recorded on a person's or company's tax return for a particular financial year are ineligible to be deducted from taxable income in subsequent years. This applies to both speculative and non-speculative losses. It is essential that you submit returns on a regular basis since you can never be sure when you may wish to request an adjustment against previous losses.

Who is Required to File Income Tax Returns?

  • Only those who fall under certain income levels are required to pay income tax, according to the Income Tax Act. The following organizations in India are obliged to voluntarily declare their IT Rs:
  • Individuals who earn more than Rs 2.5 lakh annually but are under the age of 59. The maximum amount is Rs. 3 lakh for senior citizens (those aged 60–79) and Rs. 5 lakh for super senior citizens (those aged 80 and higher). Recall that before you can apply any exclusions or deductions from Sections 10 and 80C to 80U, you must first figure out your taxable income.
  • Any legal entity that makes money, regardless of whether or not it made a profit for the year.
  • Those who have paid more in income taxes or payroll taxes than they owe and are requesting a refund.
  • People who have financial relationships with companies having headquarters outside of India because of the rights granted by treaties, certain companies with headquarters outside of India have activities located inside the nation.

Necessary Documents for ITR Filing

When you start the process of electronic filing, you need to be sure that you have all of the Documentwork on hand.

  • Passbook for accounts held with the Public Provident Fund, Registered Retirement Savings Plans, and savings accounts at banks and post offices
  • Pay slips Aadhar Card, PAN Card Form-16-TDS Certificate provided by your employer describing the salary received and TDS deducted, if applicable Interest Certificates from Banks and Post Offices
  • Payments other than salaries, such as interest from permanent deposits, recurring deposits, etc., that exceed the TDS limits under current tax legislation are required to be reported on Form-16A.
  • If you have just sold a piece of real estate, the buyer should provide you a Form 16-B, which provides information on the amount of tax that was withheld from the proceeds of the sale. This form is required by law.
  • Form 16C from your landlord detailing any tax with holdings from your rent.
  • Your yearly tax statement is Form 26AS. It contains all of the information on the taxes paid using your PAN.

    TDS deducted by your employer

    TDS deducted by banks

    TDS deducted by any other organizations from payments made to you

    Advance taxes submitted by you

    Self-assessment taxes paid by you

  • Proof of Tax Saving Investments
  • Evidence of Deduction Purpose for Articles 80D to 80U (health insurance premium for self and family, interest on education loan)
  • Bank Statement for a Mortgage Loan

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Steps for Filling Income Tax Return

The Income Tax Department now accepts electronic submission of tax returns. Before learning how to electronically submit an income tax return, a taxpayer is required to keep records for ITR computation and reporting.

Calculate Your Income

The taxpayer is responsible for researching the laws that govern income tax.

Consideration should be given to a variety of potential sources of income, including a salary, commissions, and interest on investments. Under Section 80C, the taxpayer is eligible to deduct tax-saving investments.

TDS, TCS, and any advance tax paid by a taxpayer must all be considered.

Requirements Include Form 26AS and Tax Deducted at Source (TDS) Certificates.

The taxpayer should figure out his total TDS for the year using the TDS certificates that he has received for each of the fiscal year's four quarters. The taxpayer is required to file Form 26AS in order to get a summary of their TDS and tax payments for the year.

Choose the Appropriate Income Tax Form

Before reporting taxes, the person must choose which ITR form to fill out. You have the option of submitting your taxes either online or offline. Only Forms ITR 1 and ITR 2 may be submitted electronically. For all other income tax forms, offline submission is necessary (by producing an XML file and downloading it).

Go to the Income Tax Portal and Download the ITR Software

Choose Downloads from the main menu of www.incometax.gov.in.

Download the offline tool, input your income details, and see the anticipated tax or refund that will be due. The information from the income tax challan should be used to complete the form that is attached.

Check Entered Data

There are a few buttons on the right side of the downloaded form. Click Validate to confirm that all required fields have been filled out.

Convert the File to XML Format

To produce an XML version of the file when validation is finished, click the Create XML button that is located in the top right-hand corner of the file.

Upload Your XML File to the Income Tax Portal

After entering into the online income tax filing system, choose Income Tax Return 2 from the e-File option.

The ITR form number, tax year, and PAN are all necessary. As can be seen below, Upload XML 2 is an option in the Submission Mode drop-down menu.

After Selecting the XML File to Upload from Your Own Computer, Click Submit

Aadhar One-Time Password (OTP), Electronic Verification Code (EVC), or sending a signed ITR 2 to CPC, Bangalore, are all possible means of verification.

What Are Some Strategies to Save Income Tax?

Tax planning might reduce income tax. The Income Tax Act enables taxpayers to reduce their taxable income and their tax obligations by taking advantage of deductions and exclusions. This is a list of the most common tax exemptions and deductions:

  • Under Section 80 C, you may deduct up to Rs 1.5 lakh for things like investments in ELSS, LIC, mutual funds, paying for your children's education, and the interest on your home loan.
  • Contributions to Central Government National Pension Schemes are entitled to an extra deduction of Rs 50,000 in 80 CCC above Rs 1.5 lakh (1b).
  • According to Section 80D of the Internal Revenue Code, taxpayers may deduct the cost of health insurance premiums for themselves, their spouse, their dependent children (up to the age of 26), and their dependent parents (up to the age of 65).
  • Donations to organizations and trusts that meet the requirements of Section 80G are eligible for a tax deduction.
  • If you have less than 10 children, your housing allowance can be lowered (13A).
  • Loans for higher education that are eligible for the 80E deduction.
  • For homes that are owner-occupied, the deduction for a house loan under Section 4 is limited to 2 lakh, while it is limitless for properties that are rented out.

What Is Form 26AS?

Form 26AS is an important record that reveals the percentage of tax that was withheld at the source from payments and investments made by individuals, workers, and independent contractors. As a result, taxpayers are now able to apply for a refund of any taxes that they overpaid or underpaid.

The new Form 26AS, which will go into force during the financial years 2020-21, has been updated to make it simpler to submit tax returns online and to promote compliance with any relevant tax responsibilities.

Financial transaction statements are an essential component of the newly revised Form 26 AS. As the name suggests, these are statements in which the taxpayers recollect any significant financial transactions that could be advantageous to them when paying taxes.

Your Aadhar card information, date of birth, email and physical addresses, as well as your mobile phone number, will all be shown in the new 26AS format. It will tell whether or not any tax processes with the tax authorities are now ongoing or closed, and it will also indicate whether or not any tax proceedings have been resolved.

Income Tax Slab Financial Year 2023-24 (AY 2024-25)

The tables below demonstrate the Revised Income Tax Slabs, which have replaced the previous tax system. The new tax brackets are shown in the table below.

Tax Slab

Rates

Rs. 3,00,000 and under Rs. 3,00,000

No tax

Rs. 300,000 to Rs. 6,00,000

5% on income above Rs. 3,00,000

Rs. 6,00,000 to Rs. 900,000

Rs 15,000 + 10% on income above Rs 6,00,000

Rs. 9,00,000 to Rs. 12,00,000

Rs 45,000 + 15% on income above Rs 9,00,000

Rs. 12,00,000 to Rs. 1500,000

Rs 90,000 + 20% on income above Rs 12,00,000

Above Rs. 15,00,000

Rs 150,000 + 30% on income above Rs 15,00,000

Income Tax Slab for People Between 60 to 80 Years is Different From the Tax Imposed as Mentioned in the Above Table

Tax Slabs

Rates

Rs. 3 lakhs

NIL

Rs. 3 lakhs to Rs. 5 lakhs

5.00%

Rs. 5 lakhs to Rs. 10 lakhs

20.00%

Rs. 10 lakhs and above

30.00%

Income Tax Slab for Senior Citizens, (Who are Above 80 Years of age):

Tax Slabs

Rates

Up to Rs. 5 lakhs

NIL

Rs. 5 lakhs to Rs. 10 lakhs

20.00%

Above Rs. 10 lakhs

30.00%

Tax Slabs for Domestic Companies Vary From Tax Slab of the Salaried Persons

Particulars

Old Tax Rates

New Tax Rates

Company that opts for section 115BAB and is registered on or after October 1, 2019 and has started its operations since 31st March 2023

-

15%

Company opting for Section 115BAA. Their income is calculated without any deductions.

-

22%

Company opts for section 115BA registered on or after March 1, 2016, and manufactures any article without deduction.

-

25%

Where a company’s Turnover is less than Rs. 400 crores in the previous year

25%

25%

Any Domestic Company other than the above.

30%

30%

  • A 7% surcharge is paid when a company's taxable income surpasses Rs. 1 crore.
  • If your total income exceeds Rs.10 crores, the income tax rate that you would be subject to is 12%.
  • Domestic companies that make the appropriate election under Sections 115BAA and 115BAB are subject to an income tax rate of 10%.
  • Added Health and Education Cess Rate - 4% s Income Tax Rate for Partnership Firms and Limited Liability Partnerships Under the Old/New Regime.
  • A partnership or an LLP is subject to a tax rate of thirty percent.
  • A 12% surcharge is applied to incomes above Rs. 1 crore.
  • The Health and Education Cess Rate is 4% under the New Income Tax System.

The Tax Rates for Individuals and HUFs Under the New Tax Framework are As Follows:

Slab

New Tax Regime

(till 31st March 2023)

New Tax Regime

(From 1st April 2023)

Up to Rs. 2,50,000

NIL

NIL

Rs. 2,50,000 - Rs. 3,00,000

5%

NIL

Rs. 3,00,000 - Rs. 5,00,000

5%

5%

Rs. 5,00,000 -Rs. 6,00,000

10%

5%

Rs. 6,00,000 -Rs. 7,50,000

10%

10%

Rs. 7,50,000 -Rs. 9,00,000

15%

10%

Rs. 9,00,000 -Rs. 10,00,000

15%

15%

Rs. 10,00,000 - Rs. 12,00,000

20%

15%

Rs. 12,00,000 - Rs. 12,50,000

20%

20%

Rs. 12,50,000 - Rs. 15,00,000

25%

20%

Above Rs. 15,00,000

30%

30%

Surcharge

Surcharges are applied in accordance with the tax rates shown below for each of the following categories:

  • If your annual income is more than Rs. 50 lakhs, you would be required to pay an additional income tax of 10%.
  • You must pay income tax at a rate of 15% if your total income exceeds Rs. 1 crore.
  • If you have an annual income that is more than Rs.2 crore, you will be subject to an income tax that is 25% higher than the standard rate.
  • If your total income reaches Rs.5 crore, you must pay 37% income tax.

Under the New Tax Regime, the maximum surcharge rate, which was 37% in the Budget for 2023, has been decreased to 25%. (Intended to take effect on April 1, 2023)

Under What Tax Bracket are You In?

To calculate the amount of income tax that is owed for a certain financial year, it is necessary to have an understanding of where one's income sits on the tax scale. The individual's choice of income tax scheme for the particular financial year will also be a consideration. The amount of income tax that will be necessary under each tax system will be compared when deciding which tax system to use.

One must first determine their taxable income in order to discover the income tax slab and rates that apply to them. A person who is still subject to the previous income tax system may claim tax exemptions (such as the Home Rent Allowance exemption, Travel Allowance exemption, and the basic deduction) and all other deductions mentioned under sections 80C to 80U. When calculating a person's taxable income, it is necessary to take into account any exemptions and deductions to which the individual is entitled.

Income Tax Surcharge

If a person's net taxable income is more than a certain level, they will be subject to a surcharge. Prior to the cess' introduction, the surcharge is applied to the total amount of income tax that is owed. If a person's taxable income exceeds Rs 50 lakh, they must pay a surcharge

The new tax system was introduced by the government in Budget 2023 with a number of new surcharge rates. During the financial years 2023-24, the revised surcharge rates will take effect on April 1, 2023.

Surcharge rate as under new tax regime

Up to Rs 50 lakh

Nil

More than Rs 50 lakh but up to Rs 1 crore

10%

More than Rs 1 crore but up to Rs 2 crore

15%

More than Rs 2 crore

25%

However, individuals opting for the old tax regime in FY 2023-24 will continue to pay the surcharge rate they were paying in the previous financial years.

Surcharge rate under old tax regime

Up to Rs 50 lakh

Nil

From Rs 50 lakh to Rs 1 crore

10%

From Rs 1 to Rs 2 crore

15%

From Rs 2 crore to Rs 5 crore

25%

Income above Rs 5 crore

37%

There are a few variances to the charge amounts that were previously specified. The maximum surcharge that an individual will be subjected to in the event that they have realized capital gains (either short-term or long-term) as a result of the sale of stock shares and equity mutual funds or through dividend income is capped at 15%. This is the case regardless of which income bracket the individual falls into.

The concept of marginal relief is necessary background knowledge for surcharge. When an individual's annual income is over a predetermined limit, the government may choose to provide financial help in the form of a more favorable tax rate.

Calculating the income tax that is owing on Rs. 50 lakhs will help estimate the necessary amount of marginal deduction that has to be taken. This is the circumstance that has arisen due to the fact that a surcharge would not be applied till the income surpassed Rs. 50 lakhs. The amount of income tax that must be paid is Rs 13, 12,500. Now you need to add any income that is above Rs. 50 lakh to the total amount of income tax that is owed.

In order to determine the accurate amount of income tax that must be paid in addition to the surcharge, it is necessary to begin by contrasting the typical tax obligation (prior to the surcharge and cess) with the tax liability that is left after taking into account any marginal tax relief. Only then can the accurate amount of income tax that must be paid in addition to the surcharge be determined (without cess)

During the Financial Years 2023-24, India has the Following Income Tax Slabs:

The minister of finance, advocated many adjustments to the income tax bands in Budget 2023 in compliance with the new tax system. Changes have been made to the new tax structure to make it more palatable to individual taxpayers. A taxpayer with taxable income of Rs. 7.5 lakh who would have paid Rs. 39,000 in income tax during the present financial year would not be required to pay any income tax during the next financial year. Thus, the new tax structure results in an income tax decrease of Rs 39,000.

The Following is a List of the Most Significant Modifications That have been Made to the New Tax Structure:

  • In accordance with the new tax structure, the basic exemption threshold has been increased from Rs. 2.5 lakh to Rs. 3 lakhs.
  • Under the new tax system, the maximum surcharge rate was reduced to 25% from 37%.
  • With the new tax system for wage earners and retirees, a standard deduction has been included.
  • The income tax slabs have been reduced from six to five under the new tax system.
  • Under the new tax structure, the Section 87A reimbursement for taxable income has been doubled from Rs. 5 lakhs to Rs. 7 lakhs. Beginning in FY 2023-24, persons with taxable earnings up to Rs 7 lakh who opt for the new tax system will virtually pay no taxes.
  • Taxpayers would be required to select the new tax system but, a person may choose to preserve the prior tax structure.

For the Financial Years 2021–2022, The Income Tax Rates are As Follows Under the New Tax System, FY 2022–2023:

Taxpayers will have the option, beginning on April 1, 2020 (the beginning of the financial year 2020-21), of continuing to operate under the current tax system (under which they will be able to claim deductions and tax exemptions) or converting to the new tax regime (under which they will not be able to operate) (under which they will not be able to do so). The previous tax system is being replaced with a new one that offers a tax rate that is lower than the previous one.

Some Example of Taxable Income in India

The following are some examples of taxable income in India:

Business Income

Businesses are required to pay taxes on their taxable net income. This tax is determined by either the expected or actual revenue that may be generated by the profession or company. Having said that, this step isn't taken until after the adjustments to the allowable deductions have been made.

For the financial year 2022-23, different tax rates will be applied to the income of individuals as well as businesses that are corporations. Individuals who file their taxes as a corporation will be subject to the income tax slabs and rates that are in effect for the financial year 2023–2024.

Salary or Pension

In this part of the world, it is common practise for individuals' base pay, allowances, and salary profit to have tax payments withheld from them. When an individual reaches retirement age, their pensions are treated like any other source of income and are thus taxable. The age of the individual who is receiving a salary or pension during the financial year 2022-23 causes the income tax bracket rates to fluctuate. These rates are in effect for the financial year 2022-23.

Real Estate Income

A straightforward way to increase your income is to own houses and rent them out. Yet, under some conditions, the income of the tenant is regarded to be taxable income. This demonstrates that you are required to pay income tax on this amount based on the income tax bracket rates that will be in effect for the financial year 2022-2023.

Income From Capital Gains

The selling of an asset such as gold, real estate, mutual fund units, stocks, bonds, or other assets may result in capital gains, which are a kind of income. Other types of assets that can result in capital gains include stocks and bonds. It is possible to categorize the gain as either a long-term or a short-term capital gain based on the features of the asset in question as well as the profits it has created over the course of time. Each of these classifications have their advantages and disadvantages.

Even though these earnings are subject to income taxes, the regulations of capital gains tax for 2022-23 and the income tax slabs for 2023-24 are not the same. This is despite the fact that these profits are taxable.

Lottery, Horse Racing, and Other Income

In India, a tax is levied on winnings from lotteries, horse races, and other activities of a similar kind. Nevertheless, these gains are subject to a separate taxation under the laws that are in effect right now, rather than being included in the income bracket rates that will be in effect for FY2022-23.

Differences Between the Old and New Regimes

In the financial year 2020-21, a new tax system was designed in addition to the current old tax regime. In FY 2022-23 (AY 2023-24), tax payers will have the chance to pick one of these income tax systems and will be accountable for paying taxes in line with their choices.

There are primarily two income tax schemes in India:

  • To begin, the new tax system features more tax bands and lower tax rates than the previous one. Owing to this, the income tax rates for FY 2022-23 fluctuate depending on whether you vote for the new or old tax system.
  • Second, if you adopt the new tax regime, you will no longer be able to take advantage of any of the significant deductions and exemptions that were available under the old tax system. These include provisions such as Section 80C, Section 80D, and many more.

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Frequently Asked Questions

By filing a tax return, you may obtain a refund of the excess payment. ECS transfer will be used to return the funds to your account. On the ITR form, bank information ('account number,' 'IFSC code,' etc.) must be filled correctly to avoid fines.

Even if they have no taxable income or tax liabilities, companies and corporations are obliged to file an ITR. When a person's income exceeds the level for basic exclusion, they must file an Individual Tax Return (ITR) in order to avoid the scrutiny of the "Income Tax Department." Even if you owe no taxes and have already filed an ITR, you must still file one.

Certainly, if you incur a loss, your corporation is responsible for filing the ITR. You may subtract losses from future profits by carrying them forward to a future financial year in which you expect a gain.

If you miss the deadline for filing your tax return, you must submit it within a set time frame. However, the late payment may be paid before the end of the Assessment Year for the applicable financial year in return for a late filing fee and reduced interest.

Businesses are required to pay taxes on their taxable net income, salaried or pensioned individuals, person with real estate income, income earned over capital gain, or income earned from Lottery, Horse Racing, and other Income.

Income up to and below INR 3,00,000 is not taxable under the new income tax regime.

A 7% surcharge is paid when a company's taxable income surpasses Rs. 1 crore besides this if a person's taxable income exceeds Rs 50 lakh, they must pay a surcharge.

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