Income Tax Basics, ITR, Due date, E-filing process

Income Tax – Income Tax Slab, Income Tax Calculator, Income Tax Returns, Due Dates,  E-filing process F.Y. 2020-2021

The present article enables the common man to understand the basics of Income Tax; Income Tax Return; Due dates for filing ITR for Financial Year 2020-2021; E-filing process and some of the relevant important FAQs.

What is the meaning of income tax?

Grossly speaking, taxes are of two types, namely, ‘Direct Tax’ and ‘Indirect Tax’. Taxes that are directly levied on the income is known as ‘Direct Tax’ For eg. ‘Income Tax’.

Talking further about income tax, the income earned is divided into the following ‘Heads of Income’-

1. Income from Salary,

2. Income from House Property,

3. Income from Business and Profession,

4. Income from Capital Gain, and

5. Income from Other Sources.

How is income tax calculated?

The Income Tax is calculated based on the ‘income tax slab rates’ as applicable during the respective Financial Year. Income tax slab rates (both old and new tax regime) as applicable for the Financial Year 2020-2021 (i.e., the Assessment Year 2021-2022) is briefed hereunder-

OLD TAX REGIME-

Tax slab for individuals-

Individual (resident or non-resident)		Resident senior citizen (i.e., age group 60 years or more but less than 80 years)		Resident super senior citizen (i.e., age group above 80 years)
Net Income	Tax Rates	Net Income	Tax Rates	Net Income	Tax Rates
Up to INR 2,50,000	NIL	Up to INR 3,00,000	NIL	Up to INR 5,00,000	Nil
INR 2,50,001 – INR 5,00,000	5%	INR 3,00,001 – INR 5,00,000	5%	INR 5,00,001 – INR 10,00,000	20%
INR 5,00,001 – INR 10,00,000	20%	INR 5,00,001 – INR 10,00,000	20%	Above INR 10,00,000	30%
Above INR 10,00,000	30%	Above INR 10,00,000	30%	–	–

Tax slab for HUF, AOP and BOI or any other artificial juridical person-

Net Income	Tax Rates
Up to INR 2,50,000	NIL
INR 2,50,001 – INR 5,00,000	5%
INR 5,00,001 – INR 10,00,000	20%
Above INR 10,00,000	30%

NEW TAX REGIME-

Tax slab for individual and HUF-

Total Income	Tax Rates
Up to INR 2,50,000	NIL
INR 2,50,001 – INR 5,00,000	5%
INR 5,00,001 – INR 7,50,000	10%
INR 7,50,001 – INR 10,00,000	15%
INR 10,00,001 – INR 12,50,000	20%
INR 12,50,001 – INR 15,00,000	25%
Above INR 15,00,000	30%

OTHER INCOME TAX SLABS-

• Partnership firm (including LLP) and the local authorityare taxed at the rate of 30%.
• Domestic company-

Normal Rate		Special Rate
Particulars	Tax Rates	Particulars	Tax Rates
Turnover or gross receipts up to INR 400 Crores in the Financial Year 2019-2020	25%	As per section 115BA	25%
Others	30%	As per section 115BAA	22%
–	–	As per section 115BAB	15%

• Co-operative society-

Income	Tax Rates
Up to INR 10,000	10%
INR 10,001 – INR 20,000	20%
Above INR 20,000	30%

It is important to note that ‘Surcharge’ and ‘Health and Education Cess’ is applicable over and above the tax rates mentioned above.

What are the Income Tax Returns (ITRs) in India?

Income Tax Returns-

Basically, income tax returns (IT returns) is a form through which the annual income of the taxpayer is reported. Based on the income assessment group, the taxpayer will have to submit one of the following ITR forms-

ITR forms	Applicable to
ITR 1	Resident individual- Having income from ‘salary’, ‘one house property’, ‘other sources’; and Having total income up to INR 50 Lakhs and agricultural income up to INR 5,000.
ITR 2	Individual and HUFs not having any income from profits and gains of business or profession
ITR 3	Individual and HUFs having income from profits and gains of business or profession
ITR 4	Resident individual, HUFs and Firms (not LLP)- Having total income up to INR 50 Lakhs; and Having income from the business and profession computed under section 44AD, section 44ADA or section 44AE.
ITR 5	Any person other than- Individual, HUF, Company, and Person filing return in ITR-7.
ITR 6	Companies (other than companies claiming exemption under section 11)
ITR 7	Any person (including company) who are required to furnish return under section 139(4A); or section 139(4B); or section 139(4C); or section 139(4D).

What is the last date for filing ITR for AY 2021-22?

As per the latest issued circular no. 17/2021 dated 9^th September 2021, the due dates for filing the ITR for the Financial Year 2020-2021 is extended. Original due date and extended due dates are tabulated hereunder-

Particulars	Original due date	Extended due date
ITR filing by the taxpayers not covered under tax audit	31st July 2021	31st December 2021
ITR filing by the taxpayers covered under tax audit	31st October 2021	15th February 2022
ITR filing by the taxpayers required to furnish report referred in section 92E	30th November 2021	28th February 2022

E-filing process F.Y. 2020-2021-

Recently, on 7^th June 2021, the Central Board of Direct Taxes launched the new e-filing portal www.incometax.gov.in.Despite many initial technical challenges, the new portal has certainly tried to make the ITR filing much easier.

ITR filing is possible in both online and offline modes. The basic steps to be followed for filing the ITR is summarized hereunder-

STEP 1 – Visit site https://www.incometax.gov.in/iec/foportal.

STEP 2 – Click the ‘Login’ icon available on the right-hand side.

STEP 3 – Enter ‘User ID’ and click Continue.

STEP 4 – Enter ‘Password’ and click Continue.

STEP 5 – Click ‘File Now’.

STEP 6 – Select Assessment Year 2021-2022 from the drop-down list.

STEP 7 – Select the mode of filing i.e. Online or Offline.

STEP 8 – Click Continue.

STEP 9 – Based on the mode of filing selected, fill up the required details and submit the return.

FAQ-

Q.1 What is the e-filing of income tax return?

E-filing of income tax return is a process through which the taxpayer has to submit their income tax return ‘online’.

Q.2 How do I Efile my tax return?

Post ‘Login’ into the e-filing portal www.incometax.gov.in one can e-file the return using either online mode or offline mode.

Q.3 What is the e-verification of income tax return?

E-verification is a process that helps to verify the identity of the return filers. It is mandatory to e-verify the ITR within 120 days of its filing. In case of failure, the return will be treated as null and void.

Q.4 What is form 16 in Income Tax?

Form 16 is a certificate issued by the employer to salaried individual acknowledging that the TDS deducted is deposited with the Income Tax Department.

Q.5 How is tax calculated on salary?

Tax is calculated on salary on the basis of the tax slab rates as applicable to the individual.

Q.6 How can I reduce my taxable income?

Some basic steps to reduce the taxable income are-

• Use entire limit of INR 1.50 Lakhs available under section 80C.
• Contribute to the National Pension Scheme.
• Avail health insurance premium deduction.
• Claim deduction on rent paid and interest on home loan taken.
• Keep some money in saving bank account and avail interest deduction up to INR 10,000 under section 80TTA.

Q.7 What income is tax free?

Income which are exempt from the scope of Income Tax are tax free incomes. Agricultural income, gratuity, provident fund income, amount received from insurance, gifts, etc. are some of the examples of tax free income.

Q.8 What is taxable limit?

Any income above the exemption limit is taxable limit under income tax.

Q.9 What is the exemption limit for very senior citizen age above 80?

Exemption limit for very senior citizen having age above 80 years for the Financial Year 2020-2021 is INR 5 Lakhs.

Q.10 What are deductions for senior citizens AY 2020-21?

Following deductions are available to senior citizens-

• Deduction under section 80TTB up to INR 50,000 on interest earned on deposits,
• Higher deduction under section 80D up to INR 50,000 for payment of medical insurance premium.
• Higher deduction under section 80DDB up to INR 1 Lakhs for ailment of specific disease.

Q.11 At what age do seniors stop paying taxes?

Seniors above the age of 60 years having income below exemption limit i.e. INR 3 Lakhs are not required to pay any income tax.

Q.12 What is income tax slab for ladies 2021-2022?

Earlier the basic exemption limit of male and female were different. However, now common tax slab is applicable to both. Accordingly, income tax slab for ladies for 2021-2022 is also same as tabulated in article above.

Q.13 How can women save tax?

Some of the tax saving ways are-

• Repaying home loan,
• Education loan,
• Investing in health insurance,
• Contributions to charity and relief funds.

Q.14 What is the maximum limit of Section 80C for female?

Maximum limit available to female under section 80C is INR 1.50 Lakhs.

Q.15 Can I save tax by investing in shares?

Yes, if planned properly, one can save tax by investing in equity shares.

Q.16 What are the best tax saving investment?

Some of the best tax saving investments are-

• Public Provident Fund,
• Sukanya Samriddhi Yojana,
• Unit Linked Insurance Plan,
• National Savings Certificate,
• National Pension System,
• Senior Citizen Saving Scheme, etc.