Income Tax Return Filing

Eligibility Criteria for Income Tax e-Filing in India

Income tax eligibility criteria refer the requirements that determine whether an individual is liable for income tax return filing in India. Have a look over the following eligibility criteria for income tax e-filing in India, as discussed below:

• Individuals serving as directors or partners
• Dividend, interest, and capital gains earners
• Resident taxpayers with overseas assets or signing authority
• Individuals having financial relationships with companies headquartered outside India
• The non-resident Indians and residents not ordinarily residents of India
• Salaried individuals who are less than 60 years of age
• Senior citizens above 60 to 80 years of age
• Super senior citizens with age above 80 years of age
• Individuals having bank deposits of more than Rs. 50 lakhs for the financial year
• Self-employed professionals such as doctors, lawyers, designers, etc.
• Business owners such as SMEs, MSMEs, LLPs, partnerships, etc.
• Firms and companies making money, regardless of the fact of making a profit for the year
• Organizations managing charity funds, religious institutions, or voluntary contributions

Types of ITR Forms in India

The concerned department notified the following types of ITR forms, varying depending upon the income and filing status of the taxpayer:

• ITR 1 or SAHAJ: ITR 1, also known as SAHAJ, is an ITR form applicable to individual residents, having a total income source of up to Rs. 50 lakhs. It is one of the simplest forms for income tax return filing, applicable to the following individuals:
  • Salaried income or pension
  • One house property
  • Other sources, including interest, family pension, dividend, etc.
  • Agricultural income up to Rs. 5000
• ITR 2: ITR 2 is an ITR form applicable for individuals or a Hindu Undivided Family (HUF) having earned money from the sale of assets or property. It applies only to individuals and HUFs not having an income under the head “Profits and Gains of Business or Profession”.
• ITR 2A: ITR 2A is a newly introduced ITR form in the 2016-17 tax year. This tax form can only be utilized by a Hindu Undivided Family (HUF) or an individual taxpayer having a salary income and owning more than one house property in India.
• ITR 3: ITR 3 is an ITR form applicable for individuals and Hindu Undivided Family (HUF) having income under the head “Profits and Gains of Business or Profession”. This category encompasses professionals such as chartered accountants, doctors, lawyers, and engineers whose income is calculated based on actual profits.
• ITR 4 or SUGAM: ITR-4 (SUGAM) is an Income Tax Return form meant for individuals, Hindu Undivided Families (HUFs), and firms (other than LLPs) who are resident but not ordinarily resident and have a total income of up to Rs. 50 lakhs. This form is appropriate for all types of businesses, undertakings, or professions, having no income restriction.
• ITR 5: ITR 5 is an income tax return for entities such as firms, LLPs, Association of Persons (AoPs), Body of Individuals (BoIs), Artificial Juridical Persons (AJP), Cooperative Societies, and Local Authorities.
• ITR 6: ITR 6 is an income tax return applicable for companies other than those claiming exemption under section 11 of the Finance Act, 2024. However, filing of ITR 6 by a body corporate, either incorporated under the laws or outside India, can only be done electronically.
• ITR 7: ITR 7 is an income tax return applicable for persons, including companies, who are required to furnish returns using section 139 (4A), 139 (4B), 139 (4C), or 139 (4D) of the Finance Act, 2024. Moreover, the form is required to be used by entities claiming an exemption, such as colleges, universities, scientific research institutions, religious or charitable trusts, political parties, etc.

Income Tax ITR Filing Strategies for Saving Tax

Taxed can be saved through income tax ITR filing strategies. The Income Tax Act enables taxpayers to reduce their taxable income and their tax obligations by taking advantage of deductions and exclusions. Have a look over the list of most common tax exemptions and deductions, as provided below:

• Under Section 80C, 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 80CCC 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 fewer 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 lakhs, while it is limitless for properties that are rented out.

New Income Tax Regime for FY 2024-25 (AY 2025-26)

As per the revised provisions under Section 115BAC of the Finance Act, 2024, effective from the AY 2025-26, the new tax regime is applicable for individual HUF, AOP, BOI, or artificial juridical persons. Have a look at the below-mentioned tax regime for individuals (residents or non-residents) having an age of less than 60 years, anytime during the previous year discussed below:

Proposed Income Tax Slab Under the New Tax Regime

The Finance Minister, Smt. Nirmala Sitharaman proposed changes in the income tax slabs under the new tax regime in the Union Budget for the financial year 2025-26 (AY 2026-27).

These slabs, aiming to restructure the tax system and provide relief to taxpayers across different income brackets, are proposed to come into effect from April 1st, 2025. Have a look over the proposed income tax slab under the new tax regime, as discussed below:

Income Tax Slab for Individuals Between 60 and 80 Years

The income tax slab for individuals, whether residents or non-residents, who are above 60 years but below 80 years of age at any time during the previous year is as discussed below:

Income Tax Slab for Individuals Above 80 Years

The new income tax slab for individuals (residents or non-residents) above 80 years of age, as specified under section 115BAC of the Finance Act, 2024, is as discussed below:

Income Tax Slab for Domestic Companies for ITR Filing Online

The income tax slab for ITR filing online for domestic companies for AY 2025-26 is as discussed below:

Income Tax Slab for Individuals and HUFs for ITR Filing

The income tax slab for individuals (not eligible for filing ITR 1) and HUFs (resident or non-resident) for ITR filing during the previous year is as discussed below:

Income Tax Surcharge for Income Tax E-filing in India

An income tax surcharge for income tax e-filing in India is a charge imposed if a person’s net taxable income is more than a certain level. Prior to the cess’ introduction, the surcharge is applied to the taxable income if exceeding Rs. 50 lakhs.

• 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% on 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 per cent.
• 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.

Rebate on Income Tax

The resident individuals are further eligible for a rebate of up to 100% of income tax, subject to the maximum limit depending upon the new tax regime as specified using section 87A of the Finance Act, 2024:

• For individuals having a total income of from Rs. 5 lakhs to Rs. 7 lakhs, a tax rebate of up to Rs. 25,000 is applicable, in case the total income does not exceed Rs. 700,000.
• However, the revised tax regime for FY 2025-26 (AY 2026-27) exempts individuals earning up to Rs. 12 lakhs from having any tax liability due to the increased tax rebate of up to Rs. 60,000. The tax liability for salaried individuals will be 0 for incomes up to Rs. 12,75,000 due to the Rs. 75,000 standard deduction. (Updated as per Budget 2025)
• Health and education cess of 4% is to be paid on the amount of income tax plus surcharge (if any) in both regimes.
• Marginal relief can be claimed from a surcharge, in case the amount of income earned exceeds Rs. 50 lakhs, Rs. 1 crore, Rs. 2 crores, or Rs. 5 crores respectively.

What are the Different Types of Taxable Income in India?

The different types of taxable income in India are as discussed below:

• Business Income: The businesses are required to pay taxes on their taxable net income. This tax is determined by either the expected or actual revenue, generated by the profession or company. However, the individuals who file their taxes as a corporation will be subject to the income tax slabs and rates.
• Salary or Pension: In this part of the world, it is common practice 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.
• 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 effective financial year.
• 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. 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.
• Income From Lotteries and Horse Racing: 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 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 the respective financial year.

What Incomes are Not Taxable in India?

The Income Tax Act specified several forms of income produced are not taxable in India. Have a look over these tax-free earnings, as enlisted below:

• Agriculture-revenue under section 10(1) of the Income Tax Act
• Individual receipts belonging to a HUF
• Shares from an LLP or partnership firm
• Gratuities received as a result of the death or retirement of a government employee
• Money received under a Life Insurance Policy (LIC) & Keyman Insurance Policy (KIP)
• Any amount received from a government-recognized provident fund
• Tax-free income, such as interest income on bonds for NRIs

Comparison Between Old and New Tax Regime

Have a detailed comparison between the old tax regime (FY 2024-25) and the new tax regime (FY 2025-26), as discussed below:

What is the Last Date for Income Tax Return Filing?

The due/ last date for income tax return filing for individuals and non-audit taxpayers is the 31st of July of the assessment year (following the financial year). In case the taxpayers miss the deadline for filing an income tax return, they can still file a belated return by the 31st of December with respective penalties and interests. However, filing a timely ITR in India not only keeps you compliant but also helps avoid unnecessary charges.