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
Who is required to file Income Tax Returns?
Necessary Documents for ITR Filing
When you start the process of electronic filing, you need to be sure that you have all of the necessary paperwork on hand.
- 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
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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.
Step 1: 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.
Step 2: 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.
Step 3: 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).
Step 4: 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.
Step 5: 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.
Step 6: 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.
Step 7: 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.
Step 8: 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:
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% |
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:
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:
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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